Jones started in with oil and gas in the early 1970s, but it wasn't until he teamed with Mike McCoy, in 1981, to form Arkoma Production Co. that drilling became his primary activity. Jones was the lead partner, the money man, the deal maker. McCoy was the driller. Working for a company called Texas Oil and Gas, McCoy had perfected a low-risk strategy based on drilling holes that others felt would not meet their investment criteria. "We do not drill wildcats," says McCoy, now a Cowboys vice-president. "We do not go looking for elephants," or vast, untapped fields. "We drill close-in wells that others ignore." The success ratio on wildcats is about 5%. But over the years, Jones and McCoy have sunk some 2,000 wells and made money on more than 500 of them.
In December 1982, in a deal arranged by Jones, Arkoma paid $15 million to Arkla Gas Co., a public utility, for a half interest in 28,500 acres in gas-rich northwest Arkansas. Arkoma further agreed to spend $30 million over three years to develop the field and reserve most of what gas it might find there for Arkla. Later Arkla agreed to buy 75% of Arkoma's production at premium prices, whether Arkla needed it or not. The deal backfired on Arkla when gas prices plummeted and hoped-for new markets failed to materialize. In 1986 Arkla cut its losses, agreeing to pay Jones and McCoy $175 million for Arkoma.
All that became an issue during the 1990 Arkansas gubernatorial campaign, when incumbent Bill Clinton raised questions about the role played by his Republican opponent, Sheffield Nelson, who, as president of Arkla, had negotiated both the original deal and the buyout with Jones. Nelson and Jones were longtime friends and business partners. A subsequent investigation by the Arkansas Public Service Commission exonerated Jones. Arkla, however, was ordered to refund more than $22 million to its customers as partial compensation for the higher rates it had charged so it could satisfy the contract with Arkoma.
The deal had far-reaching implications -- for Nelson, who lost his bid for governor; for Clinton, who won his and went on to greater things; and for Jones, who, according to his son Stephen, "had lived all his life owing money and being at risk and facing the possibility of waking up one morning and not having anything," but who was suddenly, spectacularly, solvent.
Afterward Jones bought his own Lear jet, a sign that he meant to stay active. And together with McCoy, he began drilling again. But to those who had known him for years, Jones seemed somehow changed in the wake of the Arkoma sale. Perhaps it was because for the first time in his life, he had a lot to lose. "He never wanted to touch it," Jack Dixon, his accountant and his brother-in-law, says flatly. "Once he sold his gas company and paid his taxes, he never wanted to touch that money."
Then, in the fall of 1988, while vacationing in Cabo San Lucas after a gas drillers' convention in San Diego, Jones awoke one morning (hung over, if you must know) and read in the newspaper that the Dallas Cowboys were for sale. So ended Jones's prudent phase.
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Like a lot of property in Dallas in the late 1980s, the Cowboys were a distressed asset. First of all, they were losers, coming off a 3-and-13 season in 1988, their worst since the franchise was born, in 1960. Attendance, slipping for the previous five years, was lately averaging 49,000 a game, which in Texas begins to look like a high school crowd. Not surprisingly, both the team and the stadium were losing money: a total of $9.5 million in Bum Bright's final year, 1988. Steve Matt, a partner in the Dallas office of Arthur Andersen and the national director of the firm's sports-valuation service, ran the numbers at Jones's request and warned him that he might very well end up losing $25 million a year by 1993. "Don't do it," Dixon said, after he, too, looked at the books. "It could be financial suicide."
Why go ahead then? Jones figured there were two factors Dixon and Matt couldn't quantify. Number one was Jones himself: his commitment, his resourcefulness, his creativity -- basically, his willingness to devote all his time and energy to making the Cowboys go. The Cowboys had never had a hands-on owner before. For nearly three decades general manager Tex Schramm had run the team as he saw fit, spending first Clint Murchison's and later Bright's money. Schramm's motto, says Dallas sports columnist Skip Bayless, was, "This is not a business. This is a lark." The sort of talk that makes Jones cringe. What Jones likes to say instead is, "Have a big front door and a small back door, OK? Let a lot in and a little out." In short, he meant to change the way the Cowboys did business. Projections based on business as usual were meaningless.
Number two was that aspect of the Cowboys Jones calls "the sizzle": the glory; the prestige; the aura that attaches itself to 20 straight winning seasons during the 1960s, 1970s, and 1980s, to 18 (now 20) ventures into postseason play, to five (now six) Super Bowls; heroes like Don Meredith, Roger Staubach, and Tom Landry; and institutions like the Dallas Cowboys Cheerleaders. All that sizzle, Jones reckoned, had to be worth a lot more juice than the Cowboys were squeezing out. And he wondered, given the vast sums corporate America spends on sports marketing and promotion, given the public's insatiable appetite for licensed merchandise, Was there a chance here that the Dallas Cowboys could go to another level when it came to the juice?
