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COWBOYS FOR SALE THE NFL IS NOT AMUSED BY MAVERICK OWNER JERRY JONES

Sept. 18, 1995
Sept. 18, 1995

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Sept. 18, 1995

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COWBOYS FOR SALE THE NFL IS NOT AMUSED BY MAVERICK OWNER JERRY JONES

What is it about Jerry Jones that's so frightening? The Dallas
Cowboy owner makes a few side deals, invites Nike chairman Phil
Knight to watch a game from the Cowboys' bench, signs a
free-agent cornerback right after one of his best defensive
backs goes down for the season with an injury--and the NFL warns
of apocalypse. One week of mild Jonesian commotion, from a
Monday night football game that featured Monica Seles as
prominently as Troy Aikman to last Saturday's inevitable signing
of Deion Sanders, and the league is positively hysterical.

This is an article from the Sept. 18, 1995 issue

There hasn't been this much alarm around the NFL since Al Davis
tried to move the Raiders to an Irwindale, Calif., gravel pit.
Jones pumps up cash flow a bit and, because he can't help
himself, gives his fellow owners a little hotfoot at the same
time. That's all. And it's the end of Western civilization?
"He's trying to tear down this league, goddammit!" screams
Cleveland Brown owner Art Modell, one of the league's
patriarchs, from his car phone.

The outrage that Jones inspired was disproportionate to his
actual mischief. He did nothing, really, that some other owner
wasn't also doing. On Aug. 3 Jones announced a deal with Pepsi
that allowed that company to become the official supplier of
soft drinks at Texas Stadium, which Jones owns. The league
howled because Coke is the NFL's official soft drink. But 10
days later New England Patriot owner Robert Kraft, who owns
Foxboro Stadium, unveiled a similar deal with Pepsi, and no one
seemed upset. When Sanders signed his $35 million contract with
Dallas, there was grumbling that Jones was circumventing the
salary cap. Of course the San Francisco 49ers had done it for
the same player a year ago.

Striking a deal with Nike to display its swoosh logo in Texas
Stadium (the right to make clothes bearing the Cowboy logo
belongs to three other companies, per an arrangement with NFL
Properties, the league's licensing arm) and to build a theme
park next door, well, that was new. But it is Jones's
hard-earned stadium, and he can decorate it any way he likes.

So, does any of this sound like the death of the NFL? Does it
sound, as another NFL owner shrieked, "tantamount to treason?"
Treason? What is it about this guy that's so scary?

Last Thursday morning Jones rolled into the Cowboys' Valley
Ranch headquarters running late for a scheduled interview. "Late
night," he said. "Haven't been to bed, actually." He had
suffered a week's skewering in the press, had been called "a
silly man with a lot of money" by Green Bay Packer quarterback
Brett Favre and had been generally portrayed as the NFL's new
outlaw owner, assuming the mantle from Davis.

"The man's gone too far," said 49er president Carmen Policy.
"He's out of control." League sanctions loomed: A press release
from the NFL two days before had promised a hearing on "apparent
violations of league policies" and, in a dig that was as
personal as any bureaucracy permits, complained about "the
contrived manner" in which Jones announced his Nike deal during
the telecast of Dallas's Sept. 4 Monday night game against the
New York Giants. With Nike endorser Seles and Knight at his
side, Jones had offended the league by hogging the camera and
upstaging the halftime ceremony retiring former Giant
quarterback Phil Simms's jersey.

Yet, for all that, Jones looked anything but beleaguered
Thursday morning. In fact, he seemed exhilarated, having spent
the entire night hammering out the Sanders deal. Alert in spite
of his lack of sleep, his only lapse came during a routine show
of manners. "Can I get you something to drink?" he asked.
"Coffee, iced tea, Coke?" He froze. "Did I say Coke? I mean
Pepsi. We've got plenty of Pepsi."

Actually it had been the kind of night that Jones lives for.
Having been denied, by the 49ers, a place in the Super Bowl for
the first time in three years, he completed a deal for a player
who could help his team get back to the big game this January.
Jones's desperation to get Sanders was made all the more acute
when Cowboy cornerback Kevin Smith went down in Dallas's game
against New York. "I'll be honest with you," said San Francisco
owner Eddie DeBartolo, trying to appear above the fray to land
Sanders, which he was not. "I think they're more obsessed with
the 49ers than we'll ever be with them."

The NFL is not tolerant of the nouveaux riches. Guys who pay
$140 million to get in the club--which is what it cost Jones to
buy a 3-13 team and an increasingly empty stadium--are supposed
to play through their debt and not act anxious or uncouth in any
way. They should behave just like the gentlemen owners, those
who have inherited all this fun without any of the debt load or
have bought into it cheap: Divvy up the TV money, meet a couple
times a year, shut up and don't agitate for change. "That would
be fine," says Jones. "But you've got some guys with zero
invested, and in the same room you've got guys who've invested
$200 million to $400 million. You've got to create a bit of
incentive for these guys with all that debt, a way for this to
work for them."

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).

In the meantime, though, he needs that $40.5 million for
bonuses. And that is why Jones has targeted the soft underbelly
of the revenue-sharing formula to land Pepsi, Nike and deal No.
3 without clearly violating league rules. Notably excluded from
the communal pie are the proceeds from stadium "amenities," such
as luxury boxes, which owners lucky enough to own their own
playground do not have to share with visiting teams. Since
Jones's new deals are technically with his stadium, not with his
team, he may have found the multimillion-dollar loophole that
will force other owners to either jump on his bandwagon, close
the loophole (though probably not fast enough to kill any
current deal) or sue.

Jones insists that he is simply trying to show his fellow owners
the way. But others sense something darker in Jones's game plan:
the creation of a slowly elevating salary cap that benefits him
alone. Say that Jones has an extraordinarily successful year and
closes marketing deals worth $150 million for 1996. Even though
he would keep most of the money (giving some, he promises, to
teams that simply can't get their own deals), all of it would
count toward the figure that the league uses to calculate the
salary cap. In this scenario the cap would rise by $3 million
per team. But only Dallas, with its lucrative outside contracts,
and a few other wealthy teams would actually be able to afford
to increase their payrolls. The cap goes up, while everybody's
income but the fat cats' remains mostly flat.

Still, is this really what frightens all the owners? They are
correct to be, let's say, curious any time a fellow owner gains
a competitive edge. But are last week's Cowboy shenanigans
really worth this fuss? Is the above salary-cap scenario really
all that likely? Or should we go back to last Thursday to see
why Jones really scares the other owners?

As the Sanders negotiations proceed, Jones knows that he will
have to do some massaging of Aikman. His contract counts for
$4.15 million against the cap, which Jones is under by less than
$200,000. Aikman will need to agree to a massive restructuring
to make room for Sanders. Aikman, of course, is agreeable.

That night Jones invites Aikman's agent, Leigh Steinberg, to the
Cowboy compound to work on the details. Meanwhile, Sanders's
agent, Eugene Parker, is phoning in amendments to his client's
complicated contract. Jones's daughter, director of marketing
Charlotte Anderson, breaks in to say, "Dad, I've got the stadium
all swooshed up. There are swooshes as far as the eye can see."

At 10:45 Thursday night--Jones has been up for at least 36
hours--the Sanders contract is nearly finished. The business with
Steinberg is also done, and the Super Bowl is once more Jones's
to lose. He walks over to a shelf and withdraws a Cuban cigar.
"I don't really smoke these," he says, "but this is quite a
night."

This, when you get right down to it, is what's so frightening
about Jones. It's not the money he's making, not the money he's
spending. It's all this ... zest, as he calls it. There's way
too much zest. There's no telling what a man with this kind of
zest will do next. Seeing it with your own eyes makes you
suddenly sympathetic toward these stick-in-the-mud owners. You
want to get on a conference call with them as soon as you can
leave Valley Ranch and tell them, Be afraid. Be very afraid.

COLOR PHOTO: BILL FRAKES Jones says other owners can profit by following his lead in peddling things like sneakers and soda. [Jerry Jones wearing Nike sneakers, with Pepsi Cola refrigerator]COLOR PHOTO: BILL FRAKES By game time Sunday, the Nike invasion of Texas Stadium was complete. [Man carrying huge football with Nike logo]
"The man's gone too far," says a rival executive of Jones. "He's
out of control."