Ben Gilbert

But that's not true.

They've actually held flat or in some cases even decreased the number of commercials over the last 15 years in NFL broadcasts.

So you're thinking, okay, the audience size is about the same.

The number of ad slots is about the same.

So what else could be going on here?

I think part of it is you're right, is that the networks are quickly getting into a place where they're like, we don't really have any other content that people want to watch.

So we kind of need this no matter what.

And that advantage is the NFL and the negotiation where they come in and they say, look, I know you used to be super profitable on buying these rights from us.

And then your business on the back end was selling all these advertisements against it.

We think you should just compete against each other until your margins are zero, and we're going to accrue all the profit pool now because there's basically nothing else that you'll put on that people want to watch.

So here's the interesting thing is you might say like, well, if the margins are razor thin, they need a ton of volume because effectively what is happening here is the profit is getting reallocated to a different part of the supply chain.

There's no more value in distribution and all the value is accruing to the content creator, right?

You could make an analogy to the airline industry where no one was willing to pay for a better experience on a flight.

All the margin got competed away between all the airlines.

So all the airlines had to merge because you had to have massive, massive scale.

That's also what happened to these media companies that are distributing the content.

I mean, AT&T slash DirecTV, NBC slash Universal, etc.

The companies that are buying the rights are massive combinations that can actually afford to generate any margin.

What are the unit economics of buying NFL rights and then selling a bunch of ads against them?

But I have to imagine they're much worse than they used to be.