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Another Gusher For Jones
E.M. Swift
December 12, 1994
At the Dallas Cowboys' command central, where Super Bowl trophies twinkle and schemes really do come true, Jerry Jones crosses his legs. He is the very picture of casual contentment. "The key is proximity," Jones begins. "Because I'm right here, 15 feet away, we can make decisions quickly and aggressively. The Cowboys don't have any bureaucracy."
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December 12, 1994

Another Gusher For Jones

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At the Dallas Cowboys' command central, where Super Bowl trophies twinkle and schemes really do come true, Jerry Jones crosses his legs. He is the very picture of casual contentment. "The key is proximity," Jones begins. "Because I'm right here, 15 feet away, we can make decisions quickly and aggressively. The Cowboys don't have any bureaucracy."

Now that Jimmy Johnson, the Cowboys' former coach, has departed, the chain of command is breathtakingly clear. The 52-year-old Jones—the former oil wildcatter who is Dallas's owner, president and general manager—is the bureaucracy. When he promised upon buying the Cowboys in February 1989 to be involved in everything "from the jocks to the socks," Jones did not exaggerate. His office is the focal point through which all decisions must pass. And if there is a touch of smugness in his folksy manner, well, you can't really blame him.

In nearly six seasons under Jones's stewardship, the Cowboys have won two Super Bowls and, with a young roster, are well-positioned to compete for the top prize right through the end of the century. And as sound as Dallas is as a football team, financially it's a veritable juggernaut. Since 1991 the Cowboys and Texas Stadium, which Jones leases from the city of Irving for a pittance, have generated $50 million in profits. Revenues from the team and the stadium in 1994 are expected to surpass $100 million, about 20% to 30% of which, depending on how far Dallas goes in the playoffs, will be profit. This from an outfit that was losing $9.5 million a year on only $41 million in revenues when Jones took over. For the past two years Financial World has ranked the Cowboys as the most valuable franchise in professional sports—assessing its worth at some $190 million, almost triple the price Jones paid for the team.

Of the $3 billion in retail sales generated by NFL properties last year, nearly $1 billion was spent on Cowboy paraphernalia. Jones has miffed many team owners by suggesting that instead of the entire $1 billion being poured into the NFL Properties pool, at least one third of it should go directly to Dallas.

If that sounds a tad greedy, well, Jones is just getting warmed up. America's Team? Hell, the Cowboys are South America's team, as well. They're also Mexico's team, having drawn 112,376 fans for an exhibition game in Mexico City in August. Jones prints as many as 10,000 copies of the team magazine, the Dallas Cowboys Weekly, in Spanish, an NFL first, and in another NFL first, he has contracted with some 30 radio stations throughout the Southwest and Mexico for Spanish-language broadcasts of Cowboy games. "I want to see us maximize that visibility."

To that end, Jones wants to raise the roof on Texas Stadium to add another tier encompassing 40,000 seats. That would increase the arena's capacity to about 104,000—the largest of any stadium in the U.S. Jones also wants to add a retractable dome, air conditioning and natural grass. He envisions, by the year 2000, a theme park adjacent to the stadium with interactive football-related video games and a three-dimensional theater.

Jones estimates the cost of the entire project at about $200 million, and he is confident that a deal can be hammered out with the city of Irving for joint financing. He's sure not going to pay for it all himself. "I believe that the Cowboys basically transcend sports," Jones says. "It won't be easy; I've got a lot of people to sell. But it's very doable. And it's a sounder business proposition than my buying the team was back in 1989."

A hands-on investor who won't play the stock market but thought nothing of drilling for oil wells, Jones financed the $140 million Cowboy purchase—$65 million for the team and $75 million for the stadium lease—himself. "That wasn't smart," he says, "but if I hadn't been overextended, I don't think I'd have felt the urgency I did to get this off the ground."

Jones paid $90 million of that $140 million in cash and borrowed the rest against his assets. Between the interest he was paying and the interest he was losing, he figures the Cowboys were costing him $40,000 a day until 1991. That's urgency. He immediately set about finding ways to raise revenue and cut expenses. He moved the team's training camp from Thousand Oaks, Calif., to Austin, saving $1 million a year. He turned the Dallas Cowboys Cheerleaders, a division that had been costing the club $250,000 a year, into a profitable entity with its own sponsors. He lobbied the Irving city council until it finally agreed to allow beer sales at Texas Stadium. In 1989, 99 of the stadium's 292 luxury boxes were vacant. Jones leased or sold them all within three years, and then he built 68 more, for a total of 360, the most in professional sports. Today the Cowboys receive some $30 million a year from the luxury boxes, which is $25.4 million above the NFL average. By the 1990 season Dallas was breaking even. In '91 it showed a $10 million profit; in '92, $20.6 million.

Over the same period the Cowboys also began to win again on the field. Since their ugly divorce in March, Johnson has suggested that Jones took undue credit for player-personnel decisions. But while Johnson may have had the eye for talent, it was Jones who did the deals. He has perfected the technique of negotiating with a player before drafting him, to protect himself against holdouts. "The rules are you can't negotiate until it's your turn," Jones says. "We'd have people outside the players' houses. We'd get the agent of the player on the phone and offer him, say, three percent above what the player in the same draft position had signed for last year. If the agent didn't take it, his client's value automatically went down, because he'd go lower in the draft. I've negotiated as late as four minutes before our time was up."

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