Chapter 1: What is the significance of the NFL in American culture?
So in my headphones, I have, are you ready for some football? Yeah, I was listening to that too. Yes. Dude, it gets you so pumped up. It totally does. I feel like I grew up on the Fox Sports theme. That always makes me think of Thanksgiving. It makes me think of, I think it was a Jock Jams tape that I bought.
Who got the truth? Is it you? Is it you? Is it you? Who got the truth now? Is it you, is it you, is it you? Sit me down, say it straight Another story on the way
Welcome to this special remastered edition of Acquired, the podcast about great companies and the stories and playbooks behind them. I'm Ben Gilbert. I'm David Rosenthal. And we are your hosts. Three years ago, in January of 2023, we released an episode on the National Football League, which, David, I think is absolutely an essential part of Acquired canon.
Totally agree. We took so much from that episode.
But, listeners, a few things have happened since then. One, the NFL has become even more of a juggernaut. Two, Acquired's audience grew a lot, so many of you never heard that episode. And three, the ultimate Acquired universe crossover happened between the NFL and Taylor Swift.
Yes. It was kind of bad timing when we made this originally because it was right before that happened. Yes. But Ben, you forgot the most important thing, which is that this year in 2026, we are hosting the Super Bowl's Innovation Summit at the Super Bowl in San Francisco this year.
Yes, we are. Listeners, details on how and when you can watch that are in the show notes. So to help us come up to speed and prepare for that, and to help you get pumped for the Super Bowl, we decided to remaster our NFL episode to today's acquired production quality standards.
We also decided to update the episode with everything that has changed about the league from streaming on YouTube and Netflix and Amazon and all those deals to our updated thinking on the international strategy for the NFL and, of course, how the influx of gambling being legalized has affected the league.
And at the very end, we have the wild story of how private equity... has entered the league too. So make sure you stay tuned for that because it is nuts.
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Chapter 2: How did the NFL evolve from its early days?
Whether pro football is your favorite pastime or you think it's a societal ill, there is no denying the incredible role that it plays in all of our lives today. Now, listeners, just like our NBA episode a couple of years ago, this is an episode on the business of football. It's not specifically about things I learned reviewing game film or the merits of the I-formation.
Today, we're talking about the business.
But we do have some sports thank yous to Michael McCambridge, author of America's Game, which provided much of the research for this episode. And it's just like the definitive biography-style history of the NFL.
Well, after you finish this episode, come discuss it with the other smart, curious, kind members of the Acquired Slack at acquired.fm slash slack. And listeners, this is not investment advice. David and I may have investments in the companies we discuss. All right, David, take us in. Where are we starting?
All right, we start. on November 6th, 1869, on the campus of Rutgers University in New Brunswick, New Jersey, just a very short train ride up from Princeton, New Jersey, as I know well from my time there, where, indeed, a group of about 25 or so Princeton students were were up at Rutgers to visit a similarly sized group of Rutgers students. And they were there to play a game of football.
Now, what was football in 1869?
This is not someone dropping back in the pocket and throwing a 70-yard bomb.
No, no, no, no. It was essentially what today is classified as mob football, quote-unquote, or medieval football. This had been played for centuries in England, and basically the only goal of the game was for one side to get a ball to a certain spot on the other side. And that was it. There were no rules. Any number of people could participate on either side.
You could do anything up to and including maiming and killing people on the other side or your own, which happened quite frequently.
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Chapter 3: What recent developments have impacted the NFL's business model?
So they do make the sport safer. I mean, there's still like a lot of injuries. There's not a lot of protective padding being worn here.
And a lot of this predates even leather helmets. People are just playing this in regular clothes.
Yes. But they also make a change to the rules after this summit that would become the defining element of American football and fully differentiate it from soccer and rugby, which rugby itself... came from soccer. Rugby is the set of soccer rules that the English public school rugby used, hence why it's called rugby. And this rule that the NCAA institutes is legalizing the forward pass. In 1905.
And that becomes, obviously, a defining characteristic of football.
And to underscore how much this changed things, football was exclusively a violent game to this point in history, American football. But when we think about American football today, you're watching Monday Night Football and the beautiful popping color and all the lights and all the slow-mo. There's a beauty to the game. There's a romanticism. There's a moment where you hold your breath.
The world seems to move slowly. It's a ballet. This introduced what would become the counterbalancing force to the incredible violence of football, which is the true beauty of watching it.
Yeah. The beauty and the strategic element to the offensive playbook, the defensive coverages, the audibles. There's no way a casual fan can understand all of it. And yet the ballet, as you say, is mesmerizing to watch. Collegiate American football just becomes wildly, wildly popular. It still is to this day. Like it is a huge part of the American sports landscape. And it was even more so then.
All right, so the NCAA is formed. We've now got the forward pass. So modern football, does that lead to the NFL?
No. Again, very specifically, we're spending a lot of time on the origins of football in college here, but it's so important for understanding the NFL. This is a college thing. This is a American collegiate experience that these elite young men go through this dangerous kind of warlike activity. There's the sacred element to it.
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Chapter 4: What drives the NFL's annual revenue model?
That idea is what leads to what's the current annual national revenue for the NFL, like $10 billion, $11 billion?
Yeah.
That comes through shared agreements is $11 billion. And then there's another six or so that comes from local revenue that teams individually generate. Yep. That's per year. Right. Just to be clear, that is per year. It is this flywheel that makes the NFL teams collectively worth something like $140 billion today.
So remember that initial landmark deal that they got the antitrust exemption from Congress for in 1961? For the 1962 season, that was two years. The AFL is locked up for five years. The NFL gets to renegotiate every two years. Roselle opens up the bidding to all three networks, of course. CBS wins again. Another two-year, $28.2 million bid. $14.1 million per year, up from 4.6 two years earlier.
So every single team in the league now gets $1 million before the season even starts. A cool 3X from the last deal he negotiated two years before. Pretty freaking incredible. And also just says so much about the commerce that the NFL was driving. The TV networks were getting a great deal here.
These were landmark contracts, but the attention, the viewership that the games got, and then the advertising units that were sold, and then the ultimate products that were moved as a result of those ad units, this was a steal.
And you could argue that the TV networks were getting a great deal for many, many, many more years. And I think at the end, I want to discuss, are they getting a good deal today? But everyone was getting a pretty good deal here because the fan base was growing so much more quickly and the number of viewers was growing so much more quickly than these deals could get renegotiated.
Well, it just takes time for people to realize the power of a new medium. Okay, so Rozelle, unbelievable. First five years in office. Literally cannot imagine executing better. The NFL going from major crisis, death of its owner commissioner, Burt Bell, to the place it's in in the mid-60s. Incredible. What about the AFL? What happened to them? They're doing pretty great too. They're thriving.
And it's all because of television. Even though the NFL is doing great, there's still a lot of demand for football on TV.
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Chapter 5: How did the AFL strategically compete with the NFL?
They wanted to burn real hot. and under the right circumstances, have that go really well for them. And they had the exact right circumstances. It was the boom of TV in America. So they could do things like go sign Joe Namath for the Jets to a gigantic contract and just have New York and half of America fall in love with him and turn him into a superstar that benefited the league.
The Jets in the AFL, formerly the Titans. They're owned by Sonny Werblin. He was one of the co-heads of MCA, the big agency. As discussed on our interview with Michael Ovitz. Indeed, indeed. So just like Roselle gets what's going on in the NFL side, Sonny, he's the media guy for the AFL, and he totally gets it too. So Sonny sees the big second NFL deal come across in 1964.
Yeah.
All the other AFL owners are like despairing. The NFL just got this huge deal. How are we ever going to compete? They're going to have so much more money. We'll never be able to sign any players. This is the end. Sonny's like, oh, no, no, no, no. We're going to be just fine. We're going to be great because the NFL did this deal with CBS. Well, there are two other networks out there.
There's ABC, who the AFL has the current deal with, and then there's also NBC. And so there are two bidders out there who are going to be very, very, very sad that they just lost out on the most compelling content on television, professional football. And who's there to give it to them? the AFL.
Yep. We'll take second place when there's a bunch of sad people willing to throw money at second place.
And throw a lot of money. So the very next week after Roselle and CBS announced their deal... The AFL and NBC announced that they've just signed a new five-year $37.5 million deal. So bigger overall dollar number for a longer number of years.
Even though it's like less than half the per year amount.
Yeah, it's $7.5 million per year. But by this point in time, the NFL has 14 teams. The AFL still only has eight. So on a per-team basis, it's pretty close. For a five-year-old upstart league, this is a big success. So just like you were saying, right on the heels of that, Sonny and the Jets, they know what to do with that money.
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Chapter 6: What impact did Colin Kaepernick's protest have on the NFL?
There's like millions of teenage women in America throwing themselves. That's exactly what I was going to say.
He was the first professional athlete that appealed equally to men, women, and children. That's a great point. So... He comes and he's playing in New York, right? In the biggest market, the brightest lights, right there with the TV industry, right there with the advertising industry. He knew exactly how to play it. He wore white cleats. Everybody else wore black high tops.
Famously, he wore a mink coat on the sidelines. Just like amazing, amazing. Like he starred in movies in the off season. Broadway Joe was it.
Well, continuing that thread from earlier where I was talking about how CBS had this hole in their schedule and everyone was skeptical that sports would fill it, everyone thought sports were a very male thing. And especially as sort of brutish of a sport as football, they didn't think it would do well...
Certainly not in primetime, but not even sort of in the Sunday afternoon slot because, you know, it's just going to attract the husbands to come and watch it. And it doesn't have a family appeal. And Joe Namath is the first big example where everyone realized, oh, football totally can be for everyone.
Yep.
All right, listeners. Well, now is a great time to thank some new friends of the show we are very excited about, Sierra.
Yes, we're pumped to be working with Brett, Clay, and the whole team over there. And a fun fact for this NFL episode, Sierra works with Wilson, the official exclusive manufacturer of NFL footballs since 1941. 1941!
I know. It's so cool. But wait, David, we should explain why we are so excited about Sierra first. So one thing we've learned from making Acquired is that a great company is often defined by its customer experience.
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Chapter 7: How did the NFL respond to social media and player protests?
So, I mean, if what the NFL wanted to do was not amplify his protest by making him not able to play, it totally blew up in their face. And he became a national headline for months and months and months.
Right. Which is emblematic of the NFL not understanding the social media era.
Yep. So all this to say, it was very compelling for David, you and I to spend a bunch of time talking about the NFL up through 1980 and the Roselle era. But I mean, revenues have gone up. Team values have gone up. Games have gone from standard def to HD to 4K. But the end of the hero's journey sort of happened at the end of the Roselle era.
Chapter 8: What are the implications of private equity entering the NFL?
Yeah.
And it won't hurt their business for a long time. That's the interesting thing.
I think this is a good point to transition into analysis. And why don't we do playbook and then do power? One that just really strikes me through all this is the Lindy effect. Despite everything you just said, football is bigger than it ever has been.
$12 billion a year in revenue from the TV deals alone.
A huge amount of revenue and now diversified those revenue sources. It's not just old line broadcast networks trying to hang on that are paying them this money. Like, no, it's Google and Amazon that are paying them this money.
They're paying, what, close to $4 billion a year from the biggest tech companies in the world.
Yeah, the NFL is going to be just fine. And that revenue is almost assuredly going to grow at a very healthy clip. So even despite all this, people love their football. I still love watching football.
Totally. Me too. I feel like I'm a slight apologist for still loving football as much as I do. Two things. One, I mean, again, that just reinforces the power of the Lindy effect to me.
The NFL is just fine and is going to be just fine for a very, very long time. Now, I do think the younger generations thing is a real risk. And I think related to that is one, basketball definitely won the social media era in a way, not to as big a degree as the NFL won the TV era, but basketball's on the rise. And related to that is number two... The NFL has never figured out international.
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