In this episode, Ben Gilbert and David Rosenthal of "Acquired" delve into the NFL's transformation into America's most popular sport and a media juggernaut. They explore the league's history, from its modest beginnings to its current status as a technology and entertainment powerhouse, with an annual revenue surpassing $18 billion. They discuss key figures like Pete Roselle, who shaped the NFL's narrative, and the league's strategic moves, such as embracing TV rights deals and creating iconic events like the Super Bowl. Despite controversies like CTE and the Colin Kaepernick incident, the NFL's business model remains robust, driven by shared revenues, lucrative media contracts, and a deep cultural impact. They also touch on the NFL's challenges and opportunities, including player safety, youth engagement, and international expansion. The episode concludes with reflections on the NFL's future and its enduring appeal.

Summary Notes

Introduction to Acquired Podcast Season 12 Episode 1

  • Ben Gilbert and David Rosenthal introduce the episode on the NFL.
  • Discussion of football's popularity and cultural impact in America.
  • Mention of the Super Bowl's viewership and its significance on American culture.
  • TV networks' dependency on NFL for viewership.
  • NFL's cooperation and revenue-sharing among owners.
  • Controversies within the NFL, including player safety issues and racial disparities among coaches.

"Football is America's favorite sport by far. In fact, football is more than three times as popular as the next highest sport, basketball. The Super bowl is watched by over 100 million viewers every year in approximately two thirds of american households. My favorite Super bowl stat is that it's the weekend with the fewest weddings planned of the year."

The quote emphasizes the NFL's dominance in American sports culture and its influence on TV viewership and even personal event planning, such as weddings.

History of Football and the NFL

  • The NFL's evolution from a college sport to a professional league.
  • The role of Teddy Roosevelt in football's safety reforms.
  • The inception of the NFL in 1920 and its early challenges.
  • The NFL's approach to maintaining competitive balance.
  • The NFL's racial integration in the mid-20th century.
  • The NFL's response to the AAFC and the importance of competitive games.
  • The significance of television in the expansion and popularity of the NFL.

"On November 6, 1869, on the campus of Rutgers University in New Brunswick, New Jersey, a group of about 25 or so Princeton students were up at Rutgers to visit a similarly sized group of Rutgers students. And what were they there for? They were there to play a game of football."

The quote describes the very early origins of American football, highlighting its collegiate roots and the social context in which it developed.

NFL's League-First Philosophy

  • The NFL's strategic scheduling to ensure competitive games.
  • Introduction of the reverse order draft to help weaker teams improve.
  • Shared ticket revenue to promote financial stability among teams.
  • The NFL's cautious approach to television deals and the impact on stadium attendance.

"On any given Sunday, any team in the league should be able to beat any other team."

The quote reflects the NFL's philosophy of parity, aiming to create a league where every team has a chance to win, thereby maintaining fan interest and competitive balance.

Television's Role in NFL's Growth

  • Rapid increase in television set sales post-World War II.
  • NFL's position as the only national professional football league during TV's rise.
  • The NFL's initial resistance to television broadcast, fearing attendance loss.
  • The eventual embrace of TV as a major revenue source for the NFL.

"By this point in the early 50s, there are 25 million homes in America with a television set."

The quote signifies the explosive growth of television ownership in America, setting the stage for the NFL to become a dominant force in sports broadcasting.

Impact of Television on Sports

  • Television became a new revenue stream for sports but had a complex impact on attendance.
  • Baseball initially resisted TV, fearing it would reduce stadium attendance, while football experimented with broadcasting away games.
  • The New York Giants and the Packers had a significant disparity in TV deal earnings in 1959.

"That radio wets the appetite. Television satiates it."

This quote encapsulates the belief at the time that while radio increased interest in attending games, television fulfilled that interest, potentially reducing the need for attending in person.

NFL's Approach to TV and Revenue Sharing

  • The NFL initially lacked a league-first approach, leading to significant disparities in TV revenue among teams.
  • The realization that away game broadcasts were popular led to the early model of NFL television broadcasts.
  • The concept of a "blackout" wasn't applicable initially as local TV stations only had contracts for away games.
  • By the end of the 1950s, the NFL's collective TV revenue exceeded $1 million annually, a significant increase from the start of the decade.

"The New York Giants were making $200,000, and this is in 1959, on their tv deal, the packers were making zero."

This quote highlights the uneven distribution of TV revenue among NFL teams before the adoption of a league-first mentality in revenue sharing.

The 1958 NFL Championship and National Broadcasts

  • The 1958 NFL Championship, known as "the greatest game ever played," drew 45 million viewers, indicating a massive opportunity for professional football on television.
  • The NFL was slow to recognize the potential of national TV contracts, despite the success of the 1958 Championship broadcast.
  • The game was a national broadcast, not the Super Bowl, and involved teams that would later compete for the Super Bowl.

"45 million viewers, this was unprecedented."

The quote emphasizes the extraordinary viewership of the 1958 Championship, showcasing the untapped potential of football as a televised sport.

NFL's Resistance to Expansion and Fraternity Among Owners

  • NFL owners were reluctant to expand the league despite clear business opportunities.
  • The owners formed a tight-knit group that valued their fraternity and the integrity of the game over rapid business expansion.
  • The league's success was driven by competition and the need to react to new challenges.

"But once again, the NFL owners are kind of dragging their feet. They're like, we don't really want to expand."

This quote reflects the NFL owners' hesitance to expand the league, highlighting their preference for maintaining the status quo and their close fraternity.

Birth of the AFL and National TV Contracts

  • The American Football League (AFL) was formed by Lamar Hunt and other investors after being rebuffed by the NFL.
  • The AFL started with eight teams and adopted a league-first mentality with shared national television contracts.
  • The AFL's innovative approach to TV contracts was initially dismissed by major networks until a deal with ABC was secured.
  • ABC's deal with the AFL was groundbreaking, providing substantial revenue before the league even played a game.

"We'll just centrally negotiate one national television contract for the entire AFL and then we'll split the revenue completely equally amongst all the teams."

This quote outlines the AFL's revolutionary approach to TV contracts, focusing on equal revenue sharing and central negotiation.

Pete Roselle's Leadership and the NFL's Response to the AFL

  • Pete Roselle became the NFL commissioner during a time of crisis and led transformative changes.
  • Roselle's background in PR helped him polish the NFL's image and strategize media relations.
  • The NFL expanded to counter the AFL, moving the league office to New York and standardizing statistics and merchandise.
  • Roselle cultivated political relationships, leading to the Sports Broadcasting Act, which allowed national sports contracts.

"Better to be lucky than good."

This quote, in reference to Roselle's appointment, underscores the fortuitous nature of his selection and his subsequent success in shaping the modern NFL.

Merger Negotiations Between the NFL and AFL

  • The NFL and AFL engaged in secret merger negotiations, led by Tex Schramm and Lamar Hunt.
  • Al Davis became the AFL commissioner, known for his aggressive and untrustworthy reputation.
  • The NFL insisted on keeping Pete Roselle as commissioner in any merger agreement.
  • The negotiations were delicate, with the potential for public disclosure to disrupt the process.

"Roselle, within the space of a year corrals all the NFL owners and gets them to realize that the NFL has to do the same thing."

This quote highlights Roselle's persuasive ability to unite NFL owners behind a common strategy, crucial for the eventual merger with the AFL.

Negotiation and Leverage in the NFL

  • Al Davis was willing to damage relationships to secure the best deal for his team.
  • The NFL used Al Davis to start a war with the AFL to improve their negotiating position.
  • The Giants broke a gentleman's agreement, leading to increased tensions and a competitive response from the AFL.

"The NFL fires the first shot in the new war as soon as Davis takes over."

The quote highlights the NFL's aggressive move to ignite conflict with the AFL by signing a player from the rival league, which was considered a significant betrayal of an unspoken agreement.

Business Tactics and Strategic Moves

  • Al Davis's response to the NFL's actions was calculated and aimed at gaining an advantage.
  • Davis's strategy was to sign key NFL players, particularly quarterbacks, to weaken the NFL's position.
  • The AFL's aggressive player signings were a tactical move to force the NFL into a merger.

"We just got our merger."

This quote reflects Davis's confidence that the AFL's actions would lead to a merger with the NFL due to the competitive pressure applied.

Media and Public Relations

  • Al Davis's comment to The New York Times demonstrated restraint and a focus on action over words.
  • The AFL's approach to the conflict with the NFL was strategic and aimed at gaining public interest.

"Our answer will be in action. This is not the time to speak."

Davis's statement emphasizes a strategic approach to the conflict, suggesting that their response would be decisive and demonstrated through actions rather than public declarations.

Leveraging NFL's Errors

  • The AFL capitalized on the NFL's tactical errors, such as not responding to the signing of Roman Gabriel.
  • The AFL's aggressive signing of NFL quarterbacks was a deliberate strategy to force the NFL's hand.

"You're going to send a message. You're going to come at the king. You best not miss."

This quote illustrates the importance of making a strong and unmistakable statement when challenging a powerful adversary, in this case, the NFL.

Merger Negotiations and Outcomes

  • The AFL and NFL merger negotiations were influenced by Al Davis's aggressive tactics.
  • The merger agreement included various strategic points, such as a common draft and a new pro football world championship game.

"On Wednesday, June 8th, 1966, the merger agreement gets announced in a press release."

The announcement of the merger agreement marked a significant turning point in professional football, leading to the integration of AFL teams into the NFL.

Financial Aspects of the Merger

  • The AFL teams paid a collective fee to join the NFL, which was significantly less than the NFL's initial asking price.
  • The merger resulted in benefits for the AFL, including access to larger TV contracts and NFL infrastructure.

"All thanks to Al Davis. The AFL owners owed Al Davis a big glass of champagne."

This quote acknowledges Al Davis's role in significantly reducing the financial burden on AFL teams to join the NFL, highlighting his effectiveness in the negotiations.

Impact on the NFL's Modernization

  • The merger led to modernization efforts within the NFL, such as stadium requirements and record-keeping.
  • The NFL began to emphasize the importance of a professional and modern image for the league.

"Anyone with less than a 50,000 seat stadium needs to change that."

The mandate for larger stadiums reflects the NFL's vision for a more professional and commercially viable league post-merger.

Government Intervention in the Merger

  • Congress passed a law to allow the merger and grant an antitrust exemption.
  • Political maneuvers and negotiations played a role in facilitating the merger.

"Lyndon Johnson signed it into law."

The involvement of the U.S. President in signing the law underscores the significance of the merger and the role of government in shaping the future of professional football.

Creation of Monday Night Football

  • ABC's Monday Night Football was an innovative approach to broadcasting NFL games in prime time.
  • The success of Monday Night Football demonstrated the potential for football as a prime-time entertainment event.

"The first Monday night football game that airs that season is watched by 60 million US households."

The quote signifies the immediate and overwhelming success of Monday Night Football, highlighting its impact on the NFL's popularity and media presence.

Betting and NFL Viewership

  • Betting on NFL games is a significant factor in viewership engagement.
  • 46 million Americans, or 18% of betting age US adults, bet on the NFL in the current year.
  • The NFL is the most betted-on sport in the US.
  • 81% of sports bettors bet on NFL games, which is higher than the NBA (over 50%) and MLB (44%).
  • Despite the high betting activity, the NFL does not currently generate meaningful revenue from betting.

"46 million Americans, or 18% of betting age US adults, bet on the NFL this year."

This quote highlights the massive scale of betting on NFL games, indicating a strong engagement from the audience.

"81% of sports bettors bet on NFL games, versus just over 50% for the NBA and 44% for Major League Baseball."

This quote demonstrates the NFL's dominance in the sports betting market compared to other major sports leagues.

NFL Revenue Breakdown

  • NFL team revenue is roughly two-thirds from shared national revenue and one-third from local revenue.
  • Shared league revenue for each team was around $350 million, but local revenue can cause significant variance.
  • Forbes estimated the Dallas Cowboys made over a billion dollars, while the Detroit Lions made $450 million.
  • Revenue breakdown by product: 61% from media, 10% from general seating, another 10% from premium seating, 10% from sponsorship and advertising, and about 9% from other sources.

"This past year, each team got right around 350,000,000 from the shared league revenue."

This quote provides a figure for the shared revenue each NFL team receives, which is a substantial base income for all teams.

"61% comes from media. Most of that is the TV from the shared league revenue."

This quote explains that the majority of the NFL's revenue comes from media rights, particularly television deals.

Health Concerns and the NFL's Response

  • Chronic traumatic encephalopathy (CTE) has been identified as a serious health issue for NFL players.
  • The NFL settled a billion-dollar lawsuit for CTE victims.
  • Long-term mental and emotional risks of playing football were not widely understood historically, and the NFL was accused of covering up research on the matter.
  • The NFL did not acknowledge the connection between football and CTE until 2016, which led to a major trust-breaking moment for fans.

"The NFL settled a billion dollar lawsuit to pay out victims."

This quote refers to the NFL's settlement regarding CTE, acknowledging the league's responsibility for player health issues.

"The NFL didn't acknowledge that until 2016."

This quote criticizes the NFL's late acknowledgment of the link between football and CTE, suggesting a delay in addressing player health concerns.

NFL's Cultural and Generational Shift

  • Youth football participation has declined, which may impact the feeder systems for professional sports.
  • The NFL's favorite professional sports league status has decreased among US adults and even more so among Gen Z.
  • The NFL may face challenges in maintaining its popularity with future generations, especially as basketball's popularity rises.

"Youth football remains robust. College football remains robust."

This quote reflects the speaker's perspective on the current state of youth and college football, though it is countered by evidence of declining participation rates.

"Only 23% of Gen Z say that the NFL is their favorite professional sport."

This quote indicates a generational shift in sports preferences, with the NFL being less favored by younger audiences.

NFL's Governance and Controversies

  • The NFL commissioner's role is to act in the best interests of the team owners.
  • Controversies like the blackballing of Colin Kaepernick have raised questions about the NFL's governance and its handling of social issues.
  • The NFL's approach to such controversies has been criticized as outdated, especially in the social media era.

"The commissioner is hired to do one job, and that job is speak for and do things that are in the best interests of the owners as a whole."

This quote clarifies the commissioner's primary responsibility, which is to serve the interests of the NFL team owners.

"So in the good old days of football, it was a bunch of reasonably young, enterprising owners who loved football and owned teams."

This quote contrasts the past and present nature of NFL ownership, suggesting a shift from passion-driven ownership to a more business-oriented approach.

NFL's Economic Outlook and Growth Strategies

  • The NFL's media rights deals have increased in value despite stable audience sizes.
  • The NFL's strategy includes aligning collective bargaining agreements with media rights deals to maintain leverage.
  • The NFL's international expansion efforts have been limited, and its future growth strategies are uncertain.

"The NFL is going to be just fine and that revenue is almost assuredly going to grow at a very healthy clip."

This quote expresses confidence in the NFL's continued financial growth despite various challenges.

"The NFL has tried NFL Europe, kind of shut that down. Couldn't get the owners to care about it."

This quote discusses the NFL's unsuccessful attempts at international expansion, highlighting the lack of owner interest as a contributing factor.

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