First Look podcast: World Congress 2017 PBC plots path to maximize distribution NBA Turnstile Tracker Baseball returns to Kinston, N.C. David Stern investing in tech startups NBA regular season sees ratings drop Faces and Places at World Congress Are sponsors wary of outspoken athletes? On Deck With: Mike Unger, USA Swimming Labor & Agents: Rosenthal takes charge
SBJ/Oct. 28-Nov. 3, 2013/FranchisesPrint All
It’s been nearly a quarter century since Jerry Jones, son of an insurance executive, bought the Dallas Cowboys, a team that was then bleeding $1 million a month and had only a single sponsorship in hand — to the club’s media guide. He famously promised upon buying the team in 1989 to get involved in all sides of the business, naming himself general manager. The decades since have not dulled that bravado nor diminished his certainty that an owner can also run team operations.
Photo by:GETTY IMAGES
Abraham Madkour & Daniel Kaplan
discuss Jerry's World
“Using the visibility and the interest you have in NFL football today is what it is,” Jones said.
Trim and fit at 71, Jones oversees an empire that admittedly he had no inkling was possible upon leaving the oil and gas business full time to buy America’s team. The Cowboys are the only NFL franchise to run its own retail operation; there is the joint-venture concessions and hospitality business with the New York Yankees, Legends; a new training complex and surrounding development arising in Frisco, Texas; and, of course, the $1.2 billion AT&T Stadium, so successful that it earns mid-five figures daily just on tours.
“There is no question my life’s ambition was to be involved and getting to do something similar to what I am doing right now,” he said. “I never dreamed it would not only be days of building a football team and competing and trying to win: ‘Beat the Eagles Sunday.’ I thought I was going to an island of coaching, or an island of sport, and removing myself from the mainstream of what I knew to be the most competitive place in the world, and that is in the middle of business competition. Trying to make a dollar: Now that is competitive. There are no rules, for the most part.”
Jones and sports business
Some might contend, of course, that Jones is partly responsible for turning sports into big business. His battles with the NFL in the 1990s were legendary, leading to lawsuits and changes in how teams and the league handle sponsorships. Thanks to Jones’ prodding, teams now sell sponsorships in a far greater number and range of categories. He is regularly at the forefront of important league business initiatives, whether it’s from his perch on top of the NFL Network committee or his role in labor.
When talks were in their late but still difficult stages in the collective-bargaining negotiations in the summer of 2011, Jones stood up, sources said, and pointing his hand at union management, asked whether the players would rather have him or them trying to increase revenue. The players, he argued, would have to take a smaller share of the pie in order to make the whole bigger. The trade-off for a lower percentage of revenue now would be a system that encouraged the league and its owners to further develop the business, work that in turn would bring more new dollars to the players.
“Percentages can be very misleading. You can have a smaller percentage and have a lot more dollars,” he says now, looking back at those negotiations, though not confirming the negotiating-room story told about him.
The result of those negotiations was a 10-year CBA that already has clearly enriched the owners but one where the jury is still out for the players. Benefits like pensions have risen under the labor pact, but the salary cap has barely moved under the new deal, and with its amount still being below the level of the last cap in the old CBA, some observers contend the owners got all they wanted.
Jones, seen at the time as a hard-line owner who wanted to crush the players in negotiations, dismisses that notion, gently. Sounding almost as if he is running the re-election campaign for NFLPA Executive Director DeMaurice Smith (who has 16 months left in his term), Jones credits the players for seeing the big picture and predicted the cap will rise by 2015, if not by next year.
“You can’t start with the premise it could have been more; it wasn’t going to be that way,” Jones said. “It was going to be less, because the other CBA was not equitable.”
Similarly, Jones has no interest in revisiting his role in the talks that led to the proposed settlement of the class-action concussion lawsuit brought by thousands of formers players. Plaintiffs lawyer Christopher Seeger, in describing the NFL talks, called Jones a “hard-ass” on a conference call announcing the deal in late August.
The $1.2 billion AT&T Stadium, a giant among NFL venues, is just part of the Cowboys empire.
Photo by:AP IMAGES
Seeger did not return queries seeking further comment.
Jones surely has no interest in putting himself out there as some bare-knuckle negotiator. Perhaps no owner in professional sports is as identified with his team, as the face of his team, as Jones. “Crass businessman” is not the image he wants out there. There is the “gentler Jerry” seen in Pepsi ads sharing an elevator with Giants fans; the “flashy Jerry” seen as himself on “Entourage.”
“He does it to keep the star [logo] and the brand top of mind,” said John Tatum, co-founder of Genesco Sports Enterprises, a Dallas-based sports marketing firm that has a number of corporate clients that work with the league and the Cowboys. “Jerry does a lot of little things to keep the brand top of mind.”
Jones squeezed in the Pepsi shoot in California between Hall of Fame ceremonies in Ohio and negotiating in Texas over the new Frisco playing facility, said Tatum, who also represents Pepsi. The Cowboys are moving in three years from their headquarters in Irving to that new $115 million facility in Frisco, another Dallas suburb.
And doing that work on all those “little things” shows. A Harris Poll out this month again showed the Cowboys as the No. 1 brand in the NFL, a consistent perch for the team and a poll that Jones would mention seven minutes into the interview.
Risk taker, legacy maker
Perhaps no owner more than Jones knows about risk, or what he terms “the tolerance for ambiguity.” When he bought the team, the FDIC held 12 percent of it because the team had been foreclosed upon.
He talks of the dark days of 2009: shovels 50 feet into the ground in Arlington, markets crashing, and still adding to the cost of the stadium. “It was a nervous time, a really nervous time,” he said.
The Cowboys are the only team to opt out of the NFL’s apparel structure, choosing to distribute its wares itself. “You take risk when you put millions of dollars of inventory on the docks out there in L.A.,” he said.
It’s perhaps why he is known to take shots at other owners he feels are not doing enough to pull their weight, once standing up in an owners meeting and offering to buy the naming rights for the Cincinnati Bengals’ stadium. The team’s owner, Mike Brown (coincidentally the only other owner to also carry his team’s general manager responsibilities) chooses to name the stadium after his father, Paul Brown, and not sell it.
The Cowboys are the only team to opt out of the NFL’s apparel distribution structure.
Photo by:BUD FORCE
Asked how he wished to be remembered in 50 years, Jones is ready with his answer. He starts by pointing out that his master’s thesis at the University of Arkansas — the school where he starred on the football team alongside future two-time Cowboys Super Bowl-winning coach Jimmy Johnson — was oral communication in football, underscoring his early desire to own a team. But it also led his father to famously tell a newspaper reporter that his son might never amount to anything, a story that often leads Jones to get teary-eyed, those who know him say.
After recounting the tale of his dad, and his road with the Cowboys, Jones gets to what he wants others to remember him for.
“It would be good to have as a legacy that I got to evolve and work in sports in its heyday of it becoming a significant business, as it is,” he said. “And at the same time, the game continued to evolve, and hopefully be one of the most successful franchises. The way I look at it is, I hope I had the skills that I could do both.”
Getting AT&T’s name on the home of the Dallas Cowboys may have been the longest sales process of any naming-rights deal, taking more than six years.
Years before the Cowboys’ $1.2 billion stadium opened in 2009, team officials were pitching AT&T. “We were knocking on their door long before we had a shovel in the ground, because we were convinced then and throughout the process that AT&T was the perfect partner,” said Cowboys COO Stephen Jones.
Jones announces the deal with Cathy Coughlin, who headed AT&T’s negotiating team, and Arlington Mayor Robert Cluck.
Photo by:AP IMAGES
Abraham Madkour & Daniel Kaplan
discuss Jerry's World
That change was followed by the economic collapse. Money got tight, layoffs were prevalent and naming-rights deals became a favorite target for politicians seeking scapegoats.
“There was criticism of naming rights, and AT&T was having to deal with certain challenges, and it just wasn’t the time for naming rights,” said Cowboys owner Jerry Jones.
So, just as Bank of America’s all-but-the name sponsorship deal with the new Yankee Stadium was scaled back, AT&T’s deal became a founding partner-level deal, which was still sizable. Above the stadium’s massive scoreboard, AT&T got camera-visible signage in a league where that is nearly impossible to get.
“It was a lesser deal, with the idea of sometime revisiting it in the future,” Jerry Jones said.
The new facility opened as Cowboys Stadium in June 2009 with a George Strait concert, although many called it “Jerry World.”
“We were still on the phone with them and told them we thought they might be missing some value. The interest was still there,” said Stephen Jones. He said they engaged again later, as the 2011 Super Bowl approached.
“But there were still not a lot of things going on in naming rights,” he said. “It was not far enough out of the economic crisis to get it done. The economic crisis was the No. 1 reason why things didn’t get done, so we just decided to stand down.”
The Cowboys contend they didn’t pitch the deal to another company. “I felt like we would ultimately be able to get together,” Jerry Jones said.
Wright was on a team negotiating the deal headed by AT&T Global Marketing Officer Cathy Coughlin. The Cowboys’ team included the Jones family and Greg McElroy, the Cowboys’ senior vice president of sales and marketing.
The political and economic climates had changed. And, as Stephen Jones pointed out, by the time negotiations resumed in earnest, the Cowboys didn’t need to tell AT&T that their stadium was one-of-a-kind. “They told us we didn’t need to sell them on how unique or special the stadium was,” he said. “We had accomplished that.”
He recalled feeling after two weeks of talks that a deal was going to get done, but issues regarding technology upgrades, specific category rights and exposure were important.
“We’d opened as Cowboys Stadium, so when someone drove up, they wanted there to be no mistaking that it was AT&T Stadium,” he said.
By the time an agreement was finalized in late July, those in on the last phone call were spread across three continents: North America, Africa and Europe. AT&T moved forward, as it was happy with its incremental branding. “They did a phenomenal job in getting all our assets in place, from building marquee to cups and napkins,” said Wright, adding that the naming-rights deal will be measured for “awareness, brand preference and consumer willingness to recommend AT&T products.”
The NFL stadium joins AT&T-branded facilities in San Francisco; San Antonio; Chattanooga, Tenn.; Little Rock, Ark.; and Lubbock, Texas.
“This deal did have a long history,” said Stephen Jones. “If there’s a lesson, I guess it’s to be tenacious and keep working any deal, because we always thought AT&T was the one.”
Staff writer Daniel Kaplan contributed to this report.
The Cowboys, with their giant, center-hung board, are all about the experience.
Photo by:AP IMAGES
What is the NFL’s biggest challenge?
The answer, after the thoughtful pause, was a familiar one for league executives these days: the in-game experience.
Jones cited all the usual suspects in support of his answer, noting the need to keep the crowd energized for a good TV image and ensuring that the social experience is a positive.
Of course, the Cowboys have little trouble selling out — the team averages a league-best 87,298 fans per game — and their center-hung, 60-yard-long scoreboard is all about entertaining. But Jones remains focused on the in-stadium issue.
At the end of the interview, he walks over to his desk and shows a letter he has mentioned several times during the conversation, one from the “nice grocery lady.” A friend of his in the grocery business sent it to him. Basically, it is a screed from a customer unhappy with poor customer service who writes that she will not return.
“In short, when I come to visit, which I won’t, but others will, make sure they have a pleasant visit. Then you will keep them as customers,” the letter states.
While the NFL is focused on putting new amenities in stadiums to give the fans something they don’t get at home, Jones says it is also important to remove barriers, like poor parking or traffic, that can keep fans from coming to the game in the first place.
— Daniel Kaplan
Since the Rams and Raiders left Los Angeles in 1995, the NFL has tried fruitlessly to return to the city. Now, in Jerry Jones’ eyes, the stars for a return are aligned — because at least four teams have lease deals that will allow them to easily move, he says.
“Probably the most since we haven’t had a team in L.A.,” said Jones, who was born in Los Angeles. “On top of that, you have to have an ownership that is qualified financially to get a stadium built and make the move, and we do have [current team] ownership that is qualified.
“It is a great market,” Jones said. “It has an aura of its own, a mystique of its own.”
Notably, Jones is unconcerned about the stadium piece, which has been the league’s stumbling block. He even suggests that while AEG and Ed Roski for years have proposed their own respective stadium sites, the owner of a relocating team could find his own location.
“There have been locations, and there have been people willing to be involved to do real estate deals,” Jones said. “It is just not the only piece of the puzzle.”
Jones would not name the four teams with flexible leases, but St. Louis, Oakland and San Diego are generally seen as clubs whose stadium deals would fit that description. And if it were up to Jones, more than one club may move to Los Angeles, as he offers the prospect of two teams moving to the City of Angels.
Jerry Jones says there is no reason an NFL franchise cannot be based in London within five years.
The league has shied from such a prediction, but it is hardly a secret the NFL is high on the British market, with two regular-season games there this year and three slated for next year.
London, which hosted Pittsburgh and Minnesota on Sept. 29, gets the Cowboys next year.
Photo by:GETTY IMAGES
The Cowboys have not been among the teams that have played a regular-season game in London since the league made those games an annual occurrence in 2007, but it was announced last week that Dallas would play in London next season, as the visiting team for a game against Jacksonville.
“London can catch on,” Jones said, considering the prospect of a London-based franchise. “We want to see London beating the Cowboys, or London beating the Giants. That is the ingredient right there. It is not just a show coming to town; it has got to have pride.”
Jones sees a relocated team moving to London and rules out expansion.
— Daniel Kaplan
Jones says the program had “very misleading … facts.”
The program paints a picture of the NFL ignoring the dangers of concussions.
“The word is not ‘exploit,’ but it is a play off the high interest there is today in the NFL, the high interest there is today in the game of football,” Jones said. “It was very obvious that it was focused in that area. It had very misleading and incorrect facts.”
Asked what was misleading, Jones responded, “It implied things.”
Reporters Mark Fainaru-Wada and Steve Fainaru, whose book of the same name fueled the documentary, said in response: “We’ll let Jerry Jones’ words speak for themselves. It’s not clear what he’s referring to, but of course we stand by the facts laid out in ‘League of Denial,’ both the book and the documentary.”
Jones said it falls to the league to share its message going forward.
“Relative to competition and relative to playing sports and things that aren’t sports — if you said the same thing about those kinds of [other] things, you could come up with as impactful a story as you have there,” Jones said. “...[W]e need to use the visibility and interest that we have to basically show the other side of the story.”
Jones said the NFL is working with the National Football Foundation to produce spots that highlight the positives of football. Some of them have already appeared on air, including spots featuring actor Rob Lowe and General Electric Chairman Jeffrey Immelt talking glowingly of playing football.
For Immelt, his ties to the NFL also include GE, Under Armour and the league this spring announcing a $60 million initiative aimed at research and prevention of brain injuries.
— Daniel Kaplan
Under Commissioner Roger Goodell, the NFL has taken visible steps to make the game safer, trying to rid competition of helmet-to-helmet hits and even moving the kickoff line up 5 yards to minimize collisions.
Jerry Jones, like others, wants to ensure the physicality of the game is preserved while making the changes.
“Our game is about physical contact; that’s what it is about,” he said. “We don’t want to change that. The things that we have done have been in immediate response to any knowledge that we may have gained. … The game is built around being very physical and winning a very physical battle and testing the will of players against players. That is what we are.”
With the game now all but eliminating hits to the head, a new concern is hits to the knee, with several players this season already suffering serious injuries on such hits. Defensive players, no longer allowed to hit high, have been aiming low.
Jones for one would like to see knee braces worn by all players.
“I am a big fan of knee braces, not only in practice, [but] a big proponent of it in games,” he said. “Knee braces help, and I don’t think it impacts [play] as long as everyone is wearing them.”
The $765 million concussion settlement
Jerry Jones calls the NFL’s decision to settle its concussion litigation with the players a business decision, meaning the NFL did nothing wrong in his opinion but needed to move on. And for those who think the NFL settled so it would not have to disclose what it knew about the risks of concussions, he dismisses that contention outright.
He also notes the relative lack of information pertaining to long-term impacts of head injuries and concussions.
“One thing I did learn from this is this is an area of medicine that is not developed,” he said. “You don’t spend much time on it in medical school. Relative to kidneys or relative to other things, there has not been a lot of research to what activities produce long-term … damage [to the brain]. We know that with our visibility and the perception of our game, that being one of contact, it’s real easy to look over and say, ‘Well, there is a sport that is bound to be having some long-term impact with head injuries.’ It is easy to say.
“Certainly nothing I have ever seen on any basis, to do with any club — and I am on the injury committee — I have never seen anything that would indicate to me that the clubs knew anything. We made a business decision to resolve it [the concussion lawsuit].”
— Daniel Kaplan
DirecTV’s contract to broadcast out-of-market games expires at the end of next season. How the NFL distributes these games in the future has garnered considerable attention, with some suggesting Google could play a role, either replacing DirecTV or supplementing it.
Jerry Jones tamped down those expectations somewhat.
“DirecTV doesn’t require new technology,” he said. “I know firsthand the importance in selling to the DirecTV subscriber and audience how important our games are, so I continue to see that being very viable. We spend most of our [owners] meetings talking about technology … or the use of technology advances in presenting our games. …
“I’m chairman of the [NFL] Network committee, and we are continuing to look for how to present our games and be sure that we maximize the use of the technology and try to stay step for step with when it becomes smart financially to do.”
— Daniel Kaplan
Nearly four years ago, Commissioner Roger Goodell challenged the NFL’s franchise owners to collectively generate $25 billion of revenue for the league by 2027. At the time, revenue was $8.5 billion. Today, the sum is $10 billion.
That means there are 14 years left and $15 billion left to go.
Asked whether he thinks the league will get there, Jerry Jones replied, “Yes, I do. Yes, I do.”
“There are a lot of influences there,” he said, “not the least of which is the economy, and aspects of the economy, inflation or deflation, some of the same things you pick up in The Wall Street Journal … . We certainly all think we are going to have better days ahead. We will play an integral role in the economy.”
— Daniel Kaplan
Jones, sidelining in 2007, calls it a football version of being on the shop floor.
Photo by:GETTY IMAGES
Since the Cowboys moved into their new stadium in 2009, Jones has been a less of sideline presence, but the reason for the change, he said, has nothing to do with that commentary. Instead, it’s because his suite at the new stadium provides him with a much better vantage point of the field than what he had at Texas Stadium.
“The reason I went so much is I got a feel as GM or as an owner being right there on the sideline for the tenor and basic feel of our players and coaches: How we were competing, how we were doing — literally like a manager going to the floor of the shop, or a manager going out in the store and walking around the grocery store,” Jones said. “I have always been so amused — and I mean it, just really amused — when somebody said, ‘He is in areas he should not be in,’ or that ‘He is upstaging,’ or ‘He is undermining.’ … Anything I have ever heard about in my life, the more the owner, the more a manager can be down on the shop floor, the more everybody — customers most of all — thought, ‘He is watching the store. He is minding his business.’”
Don’t be surprised, Jones added, if he does come down from his AT&T Stadium suite several times before this season is out.
— Daniel Kaplan
The Dallas Cowboys use halftime at their annual Thanksgiving home game to raise funds for the Salvation Army and bring awareness to the charity’s red kettle campaign. It’s a 17-year relationship between the team and the charity that draws annual recognition, but its roots lie in headlines of a different sort.
‘Bad decisions’ by players led to good deeds from the Cowboys.
Photo by:AP IMAGES
“We woke up in the middle to latter part of the ’90s and we were seeing adverse publicity relative to decisions that were being made by some of our players,” Jones said. “And so I asked my daughter, Charlotte, and wife, and said, ‘Look. We are getting all of this visibility relative to some of our bad decisions. Let’s see if we can use the visibility and interest in sports and try to help some people.’”
Nearly two decades later, the Cowboys-Salvation Army relationship is one of the more high-profile team-charity combinations in sports.
— Daniel Kaplan
In a deal completed in just over a month, MLS’s Real Salt Lake has signed LifeVantage as its new jersey sponsor.
While Salt Lake City is one the smallest markets in MLS, the deal is one of the league’s largest, as MLS sources put it at $30 million over 10 years. That’s about $1.3 million more per year than the team’s stadium naming-rights deal and three times more per year than what was being paid by XanGo, its jersey sponsor since 2005.
LifeVantage will replace XanGo on Real Salt Lake jerseys.
Photo by:SCOTT MCGUIRE
The LifeVantage-emblazoned jerseys will be on the field starting next season and get the advantage of a uniform redesign from Adidas. With a sales network of independent distributors, LifeVantage plans to leverage this deal wherever RSL plays.
“From day one, this one was anything but a local deal,” said Doug Robinson, LifeVantage president and CEO.
While this is LifeVantage’s first sports marketing expenditure, Robinson said that as head of a Utah-based company he had been curious about Real Salt Lake’s jersey deal for more than a year. In July, LifeVantage Vice President Josh Dunn met with Real Salt Lake’s Andy Carroll, vice president of corporate sales, who recalls casually mentioning that at the top of the price list was a jersey deal. “But I said that to a lot of companies,” Carroll recalled.
Still, by the time LifeVantage got serious, Real Salt Lake President Bill Manning had two offers on his desk. “We weren’t so much a dark horse; we weren’t even in the horse race,” Robinson said.
Manning scheduled a meeting for Sept. 13 at a restaurant in Sandy, Utah, far more upscale than his usual “dive.” Upon sitting down, one of the first topics discussed was how each man would have rather been at Johanna’s, the local dive. With that as a bonding agent, there was a basis for cooperation, if not a deal. Manning indicated that time was of the essence.
A formal presentation was made at Rio Tinto Stadium 10 days later, and a contract was being finalized by Sept. 27. On Oct. 1, MLS Commissioner Don Garber shared a suite at Rio Tinto with LifeVantage executives. The contract was in near-final stages a few days later, and the LifeVantage board approved the deal Oct. 5.
“We had to do a lot of [board] convincing,” Robinson said. “This was something we hadn’t done before. It was not inexpensive and it was long-term, but when they saw how Real Salt Lake is front-and-center in our global strategic plan, we were over the hump.”
The contract was signed at LifeVantage headquarters on Oct. 16. Two days later, the new jersey was displayed in front of 5,000 cheering distributors at a quarterly meeting in St. Louis.
Back in Utah, Manning recalled that his stadium deal with Rio Tinto was completed in 44 days. “I never thought we would do anything faster,” he said. Except this one, which took 34 days.