The rise of the NFL: One vote that changed sports forever

In 1961, the owners of the NFL teams all got together and took a vote on an issue that would either propel the league to become the dominant force it is today or kill it. At the time, the commissioner was a young man named Pete Rozelle, who was 33 years old, and he had barely been on the job for a year. And his proposal was that the big market teams like the New York Giants should share revenue with the small teams like the Green Bay Packers. One man in that room was Wellington Mara, the New York Giants owner. He had the biggest team in the biggest market, and he had everything to lose. The vote would eventually pass, and it would help propel the NFL to become the biggest sports league on the planet. Today, the NFL generates over $20 billion a year in revenue. To put that in perspective, that is more than the number 2 and number 3 leagues, baseball and basketball, combined. The Dallas Cowboys are the most valuable franchise in the world, worth over $10 billion. Today, a single Super Bowl ad costs over $7 million. Compare that to 1962 when the same price was about $50 grand. That's a 16,000% increase. But all of that almost didn't happen. Back in the 1960s, America's favorite sport wasn't NFL.

It was baseball.

And if a few decisions, including that one in that fateful room, had been made differently back in the 1960s and afterwards, NFL might be like boxing is today: fragmented and irrelevant. This video is the story of how the NFL became unstoppable. Was it demographic changes? Was it good business sense? Or was it something else that created the league that we know today?

Well, hold that thought.

We'll answer it in this video. This is the rise of the NFL. Oh, and if you stick around, I'll explain to you why I'm recording this video in downtown San Antonio in front of a stadium that was built for an NFL team back in the early 1990s.

But before we get into that, I want to let you know that I put every single one of these video stories that I do into a one-page summary cheat sheet. It's a great way for you to remember the key beats of the story and take away all the great lessons that come from it. And maybe you could be the cool guy at the party who is telling interesting business nerd stories like I do. Join the club. Anyway, you can get all these cheat sheets totally for free at girdley.com/youtube. Just put your email in and you'll get this video's cheat sheet automatically, plus all the other ones I've done. Now let's get back to the video.

The NFL was actually founded in Canton, Ohio. Back then, 14 teams got together and paid $100 each to own a franchise in the league. But for decades, it struggled along. Basically being an afterthought behind baseball. Nobody really cared. Unlike today, when the idea of owning a professional sports franchise in the NFL is something for the elite and it generates tons of cash, back then a lot of those teams struggled to make payroll. In fact, a lot of the people who were playing on the professional teams, well, they worked day jobs and smoked cigarettes between halftime. By the 1950s, the league had stabilized to 12 teams, but football, well, that was just something colleges played. While the real men, they paid attention to Major League Baseball. Then on December 28th, 1958, something that would happen that would change everything. The 1958 National Football League Championship would be held at Yankee Stadium, and it would pit the New York Giants against the Baltimore Colts. The game went to sudden death overtime, the first in the championship's history, as star quarterback Johnny Unitas led the Baltimore Colts in a last-minute drive that would win the game. 45 million people tuned in. That was the largest televised sports event in history up to that date in America. And as a fun fact, that broadcast of overtime almost didn't happen. A fan accidentally pulled apart an extension cord, stopping the broadcast, and a quick-thinking NBC employee ran out onto the field pretending to be a drunk fan in order to pause the game so they could fix the broadcast to get things going again. Turns out life is full of a lot of lucky moments and sometimes some brave, quick-thinking employees. But let's go back to that number. There were 45 million people watching the game. But here's the thing, things were different back in that time. There were only 42 million television sets in all of America. Turns out everybody and their entire family was sitting down watching that football game. The king in that era was still baseball, but there was a problem with baseball. Baseball games were 3 hours long, slow, and really only great if you go in person to watch them. Baseball on TV? Just not amazing. But football was a different beast. A smaller field, total lots of drama, shorter games, perfect for the upcoming era of television. But the NFL had a fundamental problem at the time, and actually 12 of them. It was all of their owners, and they met in 1960 trying to pick a new commissioner for the league, uh, and after 23 ballots, they couldn't pick anybody. Nobody was somebody that would make everybody happy. I'm in San Antonio, and San Antonio does a lot of stupid stuff, but one of the smart things it does is it keeps vagrants and people from hanging out in front of our stadium here by blasting music 24 hours a day. It totally works. I go sleep someplace else. So instead of choosing somebody with a long track record, they went and hired as commissioner a young general manager named Pete Roselle, 33 years old. The reason most of the people liked him, well, they thought he was impressionable and they could control him. But it turns out he wasn't somebody they can control. And in 1961, he convinced all of the owners that they should pool their money together and small market teams like Green Bay Packers should get the same amount of money as the New York Giants, who were basically from New York, biggest market in the world. The vote passed, but there was a problem. Back then, we had strong enforcement of a thing called antitrust laws, meaning that you can't artificially restrict competition. It's against the law. Unlike recent decades when money has spoken more, more vociferously in D.C. and controls a lot of stuff, back then there was a lot of effort to try to make sure that the playing field stayed fair for competition. In this case, the government didn't want a bunch of, you know, a cabal of football owners at the time owning a scarce resource and preventing competition. Rozelle, who would prove to be somebody with vision, said, okay, well, if I don't like the rules, I'm going to go get it changed. So he and the wealthy owners went and lobbied Congress, and in 1961, Congress created an exemption to the antitrust rules specifically for sports leagues called the Sports Broadcasting Act, which basically allowed them to pool and sell all of their broadcasting rights as a package. This would become the NFL's playbook for decades to come. If you don't like the rules, well, go change the laws in your favor. What would happen next would almost kill the NFL. In 1959, a Texas oil man named Lamar Hunt, he wanted to buy an NFL franchise and expand the league. And when the league didn't let him, he got his buddies together and they started their own league rivaling the NFL. The American Football League, rival to the NFL, launched in 1960. With 8 teams. And you know what the NFL owners did? They laughed at the upstarts, saying they'd be gone within a couple of years. But there was a problem. The AFL started to do things that the fans loved. They opened up new teams in places that the NFL wouldn't go to— Miami, Denver, and the like. And they also changed the product, made it pass-happy. And they hired Black quarterbacks for the first time when the NFL at the time was still only putting white ones behind center. They put names on the backs of people's jerseys. They added the 2-point conversion, uh, play clocks. They were innovating about the game and making it better while the NFL stood still. And remember, a lot of the money for these leagues comes in via broadcast rights. It's not about buying tickets, which helps, but they make their money from the broadcasting. And the broadcasters, they love that the AFL was another option for them. The NBC network legitimized the AFL by giving them a $36 million contract. Up until then, the NFL had been able to underpay its players. You don't want— you don't like it? Well, go play professional football someplace else. Oh, you mean there's no other professional football teams? Tough. So guys like Joe Namath and the other famous folks of the era, they paid whatever the NFL said. But the AFL came in and said, hey, we're going to bid for the stars. And guys like Joe Namath were suddenly making nearly half a million dollars a year. The AFL was bleeding the NFL dry with all these salaries, and by 1966 —didn't look like either league was going to be a viable business. Both were spending more on salaries than they were taking in in television revenue. Pete Rozelle, the commissioner of the NFL, he saw an opportunity. Instead of fighting the AFL, he was going to merge with them. This would do two things. It would eliminate competition, meaning suddenly everybody could charge more and pay less in salaries. But the second thing it would do would— by having one league— was create a type of product that had never existed before. The Super Bowl. Funny enough, the AFL was the last successful upstart league, basically, for football in history. All of the ones since then, the USFL, the AAF, the XFL, the XFL the second time, they've all failed. It turned out that once the merger happened with the AFL and the NFL, the moats around the business were basically insurmountable. The TV revenue got so high that that drove up salaries higher, that all the major cities were locked up, and stadiums like this one behind me were all locked up as well. So if you ever wanted to come in with infinite amount of money and start your own league to rival these guys, well, there was no way you're going to do it. The AFL got in just before the moat was drawn around the castle of the NFL, and everybody else has drowned since then trying to get in. The first Super Bowl was played on January 15th, 1967. And remember small market team, the Green Bay Packers? Well, they were in that game, played the champion of the AFL. The Kansas City Chiefs. Funnily enough, that first game wasn't called the Super Bowl. It was called the AFL-NFL World Championship Game. Eventually, Lamar Hunt's kids, they would name the Super Bowl after one of their toys, a bouncy ball. The game humorously didn't even sell out. There were 30,000 empty seats at $12 apiece that went unsold. But most importantly, 58 million people watched the game when it was broadcast to both— across both CBS and NBC. Rozelle, seeing those numbers, knew what he had. He actually moved the game at that point to late in January, creating a de facto national holiday between President's Day and, uh, Martin Luther King Day. Pretty crazy. By Super Bowl III in 1969, the New York Jets were led by Joe Namath, who led them over his heavily favored opposition. Suddenly the AFL was legitimized for sure. Today, 27 of the 30 most watched events in television history, they're Super Bowls. The Super Bowl in 2024 Number 58, drew 123 million viewers, the most watched event ever in history. Crazily enough, despite the World Series being 7 games, despite the NBA Finals being 7 games, the Super Bowl is just one event in one day for a few hours. It crushes all of them in total ratings. What the NFL gets is that scarcity creates value, whereas other leagues flood the airwaves with 162 games in the case of baseball, plus playoffs. Basketball is 82 games. The NFL keeps things relatively tight and short. The NFL makes $74 million per game. To put that in perspective, Major League Baseball is about 1/16th that, about $4 million a game. While most of the Major League Baseball season is 162 games and really doesn't matter, every game in the 17+ game season in the NFL, each one of those really matters. Lose a couple of them and you're suddenly out of the playoffs. It's drama, perfect for television. During the period of the '80s and '90s, the NFL kept growing. It had Monday Night Football. It dominated Sundays. That's what you did Sunday afternoon, watch a football game. And it's tempting in a situation like this when scarcity is really important to keep adding more and more supply ad infinitum and starting to dilute your product. But at the time, the NFL owners were really smart. They kept the season relatively short, kept it, you know, limited to a few months of the year. And that enabled them to charge premium prices to television advertisers. In 1962, the NFL's first league-wide TV deal was $4.7 million a year. By 1982, it was $2.1 billion over 5 years. In 2021, it was $113 billion over 11 years. From millions to billions to hundreds of billions in just a few decades. But there's a problem. Remember how the leagues in the 1960s had started to lose money because they were paying too much in salaries? Again, if people want to win, they're going to pay more to try to get the stars. We see that over and over again. So in 1994, there was an answer to that. The NFL added a thing called the salary cap. One of the dangers of a league like this is that you have some owners who spend nothing on salaries, have losing teams, and just collect checks all the time. The salary cap not only had a maximum that teams could spend, in the case of folks like the New York Giants and other high-revenue-producing teams—Dallas Cowboys, another one— They also had a floor. You had to spend at least 89% of the total television revenue on your players, meaning it was basically impossible not to compete on the field. This made the league even better. Whereas in the NBA you had dynasties and in baseball you have dynasties where the Dodgers and the Yankees seem to be in the World Series every single year, in the NFL, basically 32 different teams have made the playoffs since 2004, and very few teams even managed to win back-to-back Super Bowls. In fact, this year, 2025, the dynasty of the Kansas City Chiefs, they didn't even make the playoffs. In the end, people watch sport leagues like this because of the drama, and the drama is the story. Competitive leagues, scarcity, every game meaning something— it's a winning formula. But that's not the entirety of the secret. Remember how the NFL has a habit of changing the rules when they don't suit them? Well, this is where things get interesting. And in the 1980s, the owners started to realize how much power they have because of the scarcity over their local cities. In 1984, the Baltimore Colts, who were one of the most storied franchises in the league, they wanted stadium renovations. They went to the city and they asked for them to help pay for it. The city said no. So owner Jim Irsay, he packed up the entire franchise in the middle of the night, loaded it into a bunch of trucks, and took it to Indianapolis. Suddenly every city faced the fear that they would have to spend a bunch of money to help subsidize and basically hand money to these owners. In the sakes of stadiums or risk losing their franchises. In total, over $10.6 billion has been spent to build stadiums for NFL teams from public funds since then. And it gets pretty egregious. In the NBA, the Oklahoma City Thunder, basically they just got their whole recent new stadium development paid for by their city. Here in San Antonio, over that way, they're getting ready— what's on the other side of the freeway? The city just voted to approve about $600 million in taxpayer money to go to build a new stadium for the San Antonio Spurs. Out of the 30 stadiums that exist in the NFL today, only 3 of them have been built with private money, and one of those is in LA. Like, it's hard not to make your money back on a sports franchise in LA. The median public contribution to an NFL stadium since 2010: $500 million. And here's the kicker: if you go talk to economists, 83% of them say that these stadiums don't generate meaningful economic difference for the local communities. This is all money that could have been spent on other stuff. But voters, cities, politicians, they don't want to be the person to lose the franchise. So when their back's against the wall, they tend to vote yes. The owner of the Buffalo Bills, they're building a new stadium right now. He got $850 million in public funds. His net worth? $6.7 billion. And he's part of a, basically an empire of the NFL that generates $20 billion a year in revenue. Yeah, that's the math. So if you tie this back, the NFL asked Congress to change the rules in their benefit so competition wouldn't come in. They own a limited number of supplies of teams, and those teams suddenly have the ability, because there's a scarcity of teams, to hang it on cities like, well, Buffalo or Kansas City or Oklahoma City. Well, that's basketball, but you get what I'm saying. And here's something to think about with all this. You think that rich people in general are folks that are just really good at business. It turns out the vast majority of them are not just good at business, they're really good at managing the government as well. And if you go look at who donates to politicians, you look at who shows up to all those different things, like the rich people's names tend to be on there a lot. And there's a reason for that. They want the rules to be bent in their favor. As a case in point, all of this maneuvering has made a lot of these people a lot of money. Uh, statistic number one to know about the NFL is 93 of the top 100 most watched events in history, they are all NFL games, Super Bowls and stuff like that. The Dallas Cowboys, the franchise here in Texas, about 200 miles up north that way. Boop! The owner of that franchise is up 70x since he bought the franchise in 1989. It's gone from $140 million to $10 billion. Pretty smart. The average NFL team is worth $5 billion. There's only 32 of them, and you can't start your own, and the waiting list to buy them is basically infinite. The NFL in 2021 signed a $131 billion deal for 11 years of their TV broadcast. And the games have spread to Thursday night, Saturday night, playoffs, Sunday night, and Sunday itself. To put that in perspective, the number 2 league, Major League Baseball, makes $12 billion a year total from everything, merch and all that kind of stuff. Just the insane magnitude of the NFL is crazy. Roger Goodell has set a target of $25 billion in total revenue by 2027. And because they're the number 1 sports league with the most dominant position, and the most amount of government support in the most wealthy country in the world, the United States, it looks like they're on track to hit it. But don't worry, these folks are making enough money, they feel like they need to make more. And in 2018, the Congress legalized sports betting nationally. So basically, you go on an NFL game now, and they're making tons of money from getting you to bet on the very game you're watching. It turns out, in addition to the drama that you see from the game, that sports betting actually makes you more invested in what's going on. So everybody wins, including the advertisers and most especially the league owners. So interestingly enough, back to the original question posed at the beginning of this video of why the NFL is so powerful. Well, it's a bunch of things. A lot of smart decisions, a lot of work getting government subsidies and all that kind of stuff. But in the end, also a surprising answer, which is back in 1961, despite being really good at capitalism and taking advantage of it as a league, they decided to do a little bit of socialism and have the rich share with the poor. And Wellington Mara, the New York Giants owner at the time, basically set the league up for success for the decades to come. So something to think about with all of this and the takeaway is the recognition that the incredibly wealthy and powerful people, when they don't like the game, they tend to go get the game changed on their behalf. And that's exactly what happened here with the NFL. Does it suck if you're just one of us normies? Well, it kind of does. But in the end, recognizing that that's how the game is played can help you a lot when you're running your own business and living your own life. And if you're interested in seeing a video of a league that made decisions that would ultimately kill it, different than the NFL did, check out this one I did right here about NASCAR. It's a ton of fun. Oh, and I promised to explain to you why I'm in front of an NFL stadium with no NFL team. Well, in 1992, the city of San Antonio, under its own money, decided to build this stadium on spec, the Alamodome, with the hope that we'd be able to attract an NFL team. And we actually did for a couple years during Hurricane Katrina. The NFL Saints out of New Orleans came here for a couple of years and then they went back to New Orleans. In the end, San Antonio is too small of a market with not enough money to support an NFL team. We have the Spurs, which are great, by the way. Awesome. And in the end, we never ended up attracting a team. But we do have a beautiful stadium with very loud music. All right. Let me know what you think about the NFL story and why it's so powerful in the comments below. Was it smart moves, smart marketing, good government lobbying, lots of free money? What caused it all? Love to hear your thoughts. I try to read them all. See ya.