Cowboys Owner Jerry Jones’ Business Genius Will Eventually Become a Curse
Leave it to Jerry Jones to be too successful for his own good. The longtime owner of the Dallas Cowboys has built the franchise into the envy of all NFL owners. Forbes ranks the team as the world’s most valuable team. Incredibly, that poses a potential headache for Jones and his family down the road.
Buying the Dallas Cowboys was a great move by Jerry Jones
Jerry Jones will turn 78 years old this fall, an age at which many people have already been retired for at least a decade. He made his fortune beginning in the early 1970s by building an oil and gas exploration business in Arkansas, where he attended college. Jones remains an important name in the industry.
The business allowed Jones to amass a sizable net worth that opened the door to his best investment of all: the Dallas Cowboys. Jones bought the team from H.R. “Bum” Bright in 1989 for $140 million. How good has the return on investment been? Adjusted for inflation, the purchase price works out to about $292 million in 2020. According to Forbes, the team’s value is $5.5 billion.
It was a rough start. Jones and college buddy Jimmy Johnson gutted the roster to prepare for the future, resulting in a 1-15 first season. Three years later, the Cowboys began a run of three Super Bowl championships in four seasons.
Jerry Jones expands his empire
Jerry Jones has proven to be a rainmaker both for himself and his fellow NFL owners. He is credited with pushing the league to bring Fox Sports aboard as a broadcast partner in the 1990s. That boosted the NFC portion of the league’s TV revenue and drove up the price that the other networks were paying. That helps explain the Sportico.com estimate that the 32 NFL franchises booked $15.83 billion in revenue – greater than 298 companies in the Fortune 500 – last year.
Specific to his own business, Jones branched out into food services and stadium operations in 2008 by partnering with the Steinbrenner family to create Legends Hospitality, which Sportico values at $1 billion.
And, of course, Jones pushed through the construction of AT&T Stadium. Though owned by Arlington, the stadium has been an asset for Jones and the Dallas Cowboys along with the city. The team generates more game-day revenue than any of the 32 NFL teams.
While Forbes says the Dallas Cowboys are worth $5.5 billion, Sportico counts some related real estate and business holdings in its calculations and sets the figure at $6.43 billion, second only to the New York Yankees (more than $8 billion) among U.S. sports franchises.
Incredibly, the Dallas Cowboys’ value poses a problem
As noted, Jerry Jones will turn 78 years old during the upcoming NFL season. Wealth can’t buy eternal life, and the laws governing estate taxes can change at any time. It’s conceivable that his heirs would have to sell the Dallas Cowboys in order to settle up with the IRS if Jones still owns the team at the time of his death.
The problem is that there are only so many people capable of pulling together enough money to buy the team, whether its value is $5.5 billion or $6.43 billion. Jones has said he wouldn’t take less than $10 billion for the Cowboys while alive, but his heirs would have to be more realistic. The NFL currently requires the controlling partner of a team to own at least 30% of the franchise, teams cannot take on more than $500 million in debt, and the owners must be individuals rather than corporations.
As pointed out by Sportico, it is unrealistic to expect anyone to put up hundreds of millions or even a billion dollars to become a limited partner with no say in running the team. After weeding out foreigners, who’ve seldom shown an interest in the NFL, and billionaires over the age of 75, the website calculated that there are only 16 current candidates with the ability to buy the Cowboys.
Of them, only computer billionaire Michael Dell stands out as both rich enough to swing the deal and interested enough to pursue it.
Dell, ranked 27th richest person in the world by Forbes at $27.2 billion, was said to be in talks early this year to buy Derby County, a middle-of-the-pack soccer team in the division one notch below the English Premier League.