One hundred thirty-five million Americans, a record television audience, watched the Cowboys win the Super Bowl last January. The worldwide audience totaled nearly one billion, more people than have witnessed "any other event in the history of mankind," or so says a Cowboys marketing brochure. "When you're dealing in the realm of that kind of emotion and that kind of interest," Jones says, "and when you ask yourself, What is the potential of a franchise that can get involved in things like this -- " Jones pauses for effect. "There's no telling what the opportunities could be."
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Most teams have a hard time after winning the Super Bowl. The Cowboys were no exception. Emmitt Smith, the league's leading rusher in 1992, held out for more money at the beginning of the 1993 season. Jones resisted. He talked about the salary cap that will take effect next year in the NFL and the need to sign Aikman, his quarterback, too. But when the Cowboys lost their opener to the Redskins and got beaten the next week by the same Bills team they had punished in the Super Bowl, Jones gave in and signed Smith to a four-year contract worth more than $13 million. Overnight, the Cowboys went from the bottom of the NFL's salary scale to the middle of the pack.
Fundamentally, though, the Cowboys are in good shape. Attendance at Texas Stadium has risen each year under Jones. It won't go up again next year, but that's because this year, for the first time in franchise history, the Cowboys sold out Texas Stadium before the season started -- despite a 20% increase in ticket prices. These days the Cowboys sell 17,000 more tickets per game than they did in 1988, which means an extra $6 million annually in revenues. Subtract about a third for the visiting team, says Jones, "and I can say that the difference between having the stadium full and having it like it was when I bought it would amortize close to 60% of what I paid for the whole franchise -- the team and the stadium. And there's no more expense. The tickets are printed, the ushers are there, security's there. It's all right there." The beauty of a sold-out house -- whether you credit marketing or the performance of the team on the field -- is that it makes everything you sell that much more in demand. Jones has moved aggressively to sign up corporate sponsors, creating a fresh revenue stream worth, he says, $1 million a month. More sizzle, more juice.
Jones turned the corner with the Cowboys and Texas Stadium in 1991, when he made more than $10 million exclusive of suite income. In 1992 he doubled that. In 1993 one thing is certain: he will not lose $25 million, as Steve Matt of Arthur Andersen once warned that he might. Today, as far as Matt is concerned, what Jones has accomplished is "the most remarkable turnaround in the history of professional sports."
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Once a month Cowboys treasurer and Jones confidant Jack Dixon runs a fresh set of numbers. He looks at the income generated so far by the team and the stadium, subtracts the initial investment, adds the tax benefits received, and subtracts the interest paid on borrowed money. That's one column. Then he looks at the cash Jones had in hand at the time of the purchase and assumes a conservative 5% net return, after taxes. That's the other column. He does all this in code, in case it should fall into the wrong hands. And then he prints it out on an adding-machine receipt -- two inches by two and a half -- and gives it to the boss.
Jones calls it his report card. He carries it with him everywhere he goes, folded in his money clip. The report card tells him exactly what it will take to get him back to where he was before he made the leap into professional sports; in other words, what it will take to make him whole again. And it reminds him of his purpose. "There is no inner pleasure in winning unless it's done on a sound, prudent basis," Jones says. "There is no inner pleasure. None."
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David Whitford writes frequently about business and sports. His most recent book is Playing Hardball: The High-Stakes Battle for Baseball's New Franchises , published by Doubleday.
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Before and After
Jerry Jones's turnaround of the Dallas Cowboys football franchise, by the numbers
|
1988* |
1992** |
| Ticket revenues |
$12,342,000 |
$17,282,000 |
| Network TV revenues |
$16,000,000 |
$33,600,000 |
| Local TV/radio revenues |
$1,700,000 |
$7,816,000 |
| Local advertising revenues |
$441,000 |
$6,261,000 |
| Total stadium revenues |
$10,458,000 |
$18,223,000 |
| Total Sales |
$40,941,000 |
$83,182,000 |
| Number of employees |
135 |
120 |
| Football-team payroll |
$16,000,000 |
$27,900,000 |
| Rank of payroll in the league (out of 28 teams) |
14 |
24 |
| General and administrative costs |
$6,218,000 |
$2,728,000 |
| Other operating expenses of the club and the stadium |
$28,272,676 |
$31,976,000 |
| Total Expenses |
$50,490,676 |
$62,604,000 |
| Net Income |
($9,549,676) |
$20,578,000 |
*last year before Jones acquired the team
**most recent fiscal year's performance
