Jerry Jones knew all along

In 2018 he said the Dallas Cowboys were worth $10 billion. what would he say now?

Welcome to a beta edition of Club Sportico! Thanks for joining—please do reply with any critiques/comments/compliments!! Eben leads off this week…

Here’s a story I’ll never forget: In November 2018, I was sitting at my Bloomberg desk when a colleague who covered billionaires walked over. I just got off the phone with Jerry Jones, she said, and he claims the Cowboys are worth $10 billion?

We laughed. Jones was already well-known for exaggeration, but it was news nonetheless and we encouraged her to write it. The story ran on November 19 with a disclaimer: “The Bloomberg Billionaires Index conservatively values the team at $4 billion.”

In the following days, I used it as a conversation starter with sports bankers and executives. At the time, a handful of NBA sales in the $500-$700 million range were starting to open people’s eyes to the future. There was still skepticism about this new round of transactions, but here’s what I didn’t hear: That Jerry Jones was wrong. That’s held true through today. People in this industry are quick to point out who’s overvalued, but I’ve never heard anyone say the Cowboys would sell for anything less than an incomprehensible number.

I’m thinking about that this week because Sportico just published its latest NFL valuations, and for the first time, there’s a U.S. sports team worth more than $10 billion. And yes, that team is the Dallas Cowboys. It might not have happened on Jones’ timeline, but what looked insane six years ago now feels like an inevitable milestone in a multi-decade sports bull market.

This isn’t the first time that Jones saw the future when others didn’t. His family bought the Cowboys in 1989 for $140 million, during a stretch when the team was losing $75,000 per day. The city of Dallas was also struggling, and 17% of the team was owned by the FDIC—“We really were America’s team,” Charlotte Jones joked at a Sportico’s SXSW event earlier this year. Business partners thought Jerry was crazy.  

“My dad is known to be an over-estimator of all these things,” Charlotte said about the process. “It’s probably the only time he’s ever underestimated anything he’s ever said to us. He said, ‘You know, if I [buy this team], it just might change our lives a little.’”

Not long into his tenure, Jones pushed NFL owners on two major issues that helped the league find the money-printing business model that exists today. First, he convinced owners not to give rebates to their TV partners, a hard line that later paid off. Second, he forced the league to give individual owners the right to monetize their teams locally.

Charlotte told this story in full at the SXSW event in March. At the time, NFL teams weren’t allowed to sign local deals with companies that competed with league partners. The NFL had a deal with Anheuser-Busch, so teams couldn’t do their own with Miller. Jones thought teams were leaving millions on the table, so in 1995 he signed a sideline advertising deal with Nike (The NFL was with Starter at the time). The following week, the league sued Jones for more than $300 million. He countersued for $700 million.

In a special owners meeting to discuss the matter, Jones got emotional as he made his case.

“He said, ‘Most of you don’t even know what you’re suing me for. If you win, I know you will take my team because I won’t be able to pay you… But if I win, I’m going to come back and collect every penny of $700 million from each one of you in here,’” Charlotte Jones explained. “Two weeks later they settled the lawsuit, every team in the league got their marks and logo back, and that started the [NFL’s] growth.”

The scale of the Cowboys business today is superlative. Last year the team brought in $1.2 billion in revenue, the highest single-season haul ever for a sports team of any kind. Its operating profit was $510 million--only one other NFL team (the Patriots) had even half of that. Following yet another disappointing home playoff performance in January, Cowboys fans responded with the team’s highest-ever season ticket renewal rate.

Next time I see him, I plan to ask Jerry what the Cowboys are worth today. Would he say $15 billion? $20 billion? Would he be wrong?

tl:dr: 🤠📞🗒️ ➡️ 📅 ➡️ 💰🏈⭐

Now turning it over to Jacob for his Pick Six, including baseball on a race track and iPhones in the Premier League…

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Story of the Week 🏈: NFL Valuations day is always a massive one for us—untold hours of work goes into it from Kurt, Lev, editors, and others—so it’s worthy of one more plug. But also, it’s simply full of fascinating nuggets about the way the NFL (and all pro sports) works today, gathered from conversations with more than 30 team owners, executives, investors, bankers, consultants and lawyers. And yes, it even features a dash of Taylor Swift-onomics.

Story of the Week (Non-Sportico Division) ⚾️: All of us harbor dreams of starting our own professional sports franchise, right? Right!? Anyway, Dan Moore followed two high school buddies who are doing just that in Oakland.