Jerry Jones and the Steinbrenners Are Picking up More Than $100 Million Apiece in Pocket Change
It seems almost unfair that George Steinbrenner and Jerry Jones made billions as the value of their teams surged, and then they went into business together to make yet more money. However, that’s what happened in 2008, and Jones and the Steinbrenner family appear to be cashing some of their chips without having to dip into the value of the Dallas Cowboys or New York Yankees.
Jerry Jones and George Steinbrenner saw an opportunity
George Steinbrenner bought the New York Yankees for a modest $8.8 million in 1973, an amount that would translate to around $51.6 million today when adjusted for inflation. Jerry Jones’ deal to acquire the Dallas Cowboys was pricier — $140 million in 1989, or roughly $293 million in current dollars.
Recent estimates value the Yankees at $5 billion and the Cowboys at around $6 billion. So, yeah, that’s a tidy return on their investments.
In 2008, Jones and Steinbrenner went into the stadium and concessions management business together, forming Legends Hospitality along with the investment arm of Goldman Sachs. They had a natural beachhead since Yankee Stadium was world-famous and Jones was about to move the Cowboys into the sparkling new AT&T Stadium.
Legends Hospitality soon began expanding its reach and its services. It now offers everything from running ticketing operations to negotiating naming rights to stadiums. The company’s list of customers is impressive, from the Las Vegas Raiders and the University of Notre Dame in the United States to Wimbledon, Manchester City, and Real Madrid in Europe.
At the time that New Mountain Capital joined in 2017 as an approximately equal partner, according to Sportico.com, Legends Hospitality was valued at more than $700 million, which represents impressive growth for a start-up.
Another partner is about to team up with Jerry Jones
New York Yankees owner George Steinbrenner died in 2010 at age 80, not long after forming Legends Hospitality with Dallas Cowboys owner Jerry Jones. By then, Steinbrenner had handed off responsibilities for his businesses to his family. To this day, the Yankees and their other operations remain in the family.
The Steinbrenners remain connected to Jerry Jones via Legends Hospitality, and that operation is about to take on a different look. The Wall Street Journal reports that investment firm Sixth Street Partners intends to take a majority stake in Legends. The report says that Sixth Street’s investment will value Legends at $1.3 billion, yet another healthy boost for a company that has only existed since 2008.
The math behind the deal indicates that Jerry Jones and the Steinbrenners are each cashing in a few of their chips by relinquishing day-to-day control.
The owners of the Yankees and Cowboys will benefit
The Wall Street Journal reported that Sixth Street Partners, which manages $50 billion in assets, is primarily buying the portion of Legends Hospitality owned by New Mountain Capital since 2017. In order to take majority ownership, however, it would have to buy a total of about 18% of the shares owned by Jerry Jones and the family of George Steinbrenner.
If the report is correct that Sixth Street’s involvement raises that company’s value to $1.3 billion, then Jerry Jones appears poised to pocket half of about $235 million from the cash infusion.
That works out to a little under $120 million … or about three-plus years’ worth of Dak Prescott.
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