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Cowboys For Sale
Richard Hoffer
September 18, 1995
The NFL is not amused by maverick owner Jerry Jones
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September 18, 1995

Cowboys For Sale

The NFL is not amused by maverick owner Jerry Jones

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Jones has a solution for this two-tiered society, but it involves taking teams off the dole. The league's success is based on a kind of socialism that has allowed the NFL to avoid the small market-big market division that has plagued baseball. The decision made back in 1962 to share TV revenue equally was an early act of genius. While the on-field balance of power would swing freely, one franchise would be economically indistinguishable from another. Because TV revenue formed such a solid financial underpinning, a small-market team like the Green Bay Packers could compete for the same talent as the Giants.

By the early '60s the owners had also settled on 40% as the visiting team's share of gate receipts, and gradually revenue sharing was extended to almost all forms of franchise income, including the merchandising and marketing of items bearing the team logos, which has been handled for the past 32 years by NFL Properties (NFLP). The league even agreed to a kind of shared spending, too. The salary cap, introduced last season, further protects the league from becoming one of haves and have-nots.

Modell gave up his team's national TV contract back in '62 in deference to the league-wide deal with CBS, and he is among the most outraged of the old-guard owners at Jones's attack on the system. "What would football be in Green Bay without sharing our revenue?" says Modell. "They'd have igloo suites instead of luxury suites. Their pregame meal would be blubber!" Catching his breath, Modell concludes, "I can't deliver as a single team what the league can deliver as a whole."

Jones says that he does not want to tamper with the bulk of revenue sharing. It remains sacred. But he thinks that in one tiny area the league could do without social security and allow the best teams and the most energetic owners to reap a small reward for their initiative. All he wants is a piece of the marketing pie proportionate to his success. "Just a little incentive," he says, "so that a guy like me will have the zest to stay up till 6 a.m. and make this thing work."

As of now, the profit of NFL Properties, $90 million in 1995, is carved equally into 30 slices, chump change for a league that last year was a $2 billion business. On a $20 T-shirt NFLP reaps about 90 cents. It is Jones's idea that in this one area at least, capitalism ought to rule, that individual entrepreneurs can do far better than a bulky cartel—and one that has been rocked by scandal. Last year an NFLP executive was fired and another resigned when it was discovered that they had entered into under-the-table deals with a trading-card supplier. Cowboy merchandise, propelled by Dallas's success over the last five years, now represents nearly a quarter of NFLP sales; in 1990 that figure was 2%. Maybe, says Jones, his team deserves more than one 30th of the pie.

In that spirit Jones has begun to threaten revenue sharing by signing independent marketing contracts with Pepsi, Nike and at least one other major corporation—reportedly either Disney, American Express or Warner Bros.—yet to be announced. The Pepsi contract is said to be worth $2.5 million a year for the next decade, and Nike is said to be paying Jones about that much a year over seven years. And Jones says that any team in the league, even small-market clubs like the Cincinnati Bengals, could do the same sort of thing if allowed to market its logo freely.

This, you will not be shocked to learn, is disputed in the league. Modell says, "You can't have different running shoes and credit cards and soft drinks sponsoring each team. They don't exist!"

And besides that, as several owners are quick to point out, what goes around comes around. The Chicago Bears, whose merchandise was the best selling from 1985 to 1989, made no move to alter what was essentially a subsidy of lesser performers like the Cowboys during that time. Why can't the Cowboys carry a few teams now that they're riding high? Why can't the Cowboys be patient? Why do they have to kill something?

Well, Jones has a ready answer for that. His team wins, it sells out, and it sells hats, T-shirts and jackets. Give your fans a winner, he would tell his fellow owners, and you too could profit from your logo, as he has from the ubiquitous blue-and-white star. All Jones, a former oil wildcatter, wants is a little risk-reward thrown into the NFL scheme of things. As long as there remains the prospect of hitting it big, he won't mind the occasional dry hole. Jones wants an incentive, not to get rich—he's already rich—but to keep him interested, to keep him alert at 6 a.m., to get Dallas back to the Super Bowl.

Jones, in his single-minded drive to continue the Cowboys' success, has spent more than $40.5 million in player bonuses in the last seven months. That money is doled out in long-term contracts, which allows the Cowboys to stay under the $37 million cap for salaries and the $4.9 million limit for bonuses and pensions. This is double-edged bookkeeping, of course. While it allows Jones to sign virtually any free agent he wants, circumventing the cap (a method of accounting he learned from the 49ers last season), it also means that he is mortgaging Dallas's future on today's stars (page 90).

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