The Dallas Cowboys, one of the most widely recognized and valuable brands in professional sports, was not always a celebrated franchise in the national football league (NFL). The CEO of the team, Stephen Jones, recently spoke about the issues they faced in the early years of the franchise’s history that made it challenging to build a successful enterprise. One of these barriers was a policy by the NFL that mandated all teams and the league itself to hold partnerships with the same category of sponsors. If the league had a deal with Coca-Cola, for instance, all teams had to partner with that brand and not with a competitor such as PepsiCo. This policy created significant leverage for the league, but it also created complications for teams that wished to build their brand by becoming innovative product and marketing partners.
Jones talked about how the league had a strong hold on teams and players during the formative years of the Cowboys franchise, a hold that was not easy to break. The concept of individual team branding was considered secondary to the broader interests of the NFL. This gave rise to a situation where teams had no authority over their own marketing or licensing rights. The Cowboys themselves had to wait for two significant changes within the NFL structure to gain their freedom to conduct their businesses.
A significant event in this regard was the lawsuit filed against Jones by the NFL itself almost 30 years ago for breach of contract and licensing issues. The league accused Jones of entering into agreements that violated the terms of conduct, which were laid out in the dealer agreements. The NFL argued that all its teams must follow the same league-approved advertising and marketing guidelines. Jones, however, counter-sued the league for $700 million, claiming the NFL was blocking teams from conducting their businesses freely. This lawsuit marked an inflection point in the relationship between teams and the NFL, as the dispute was eventually settled out of court, and the entire ordeal opened the door for Cowboys, and other teams, to start conducting their businesses in a brand-specific and innovative way.
Another equally significant issue that created friction between the teams, league and the networks was how much revenue the NFL was making from television contracts. The networks had three channels- ABC, NBC, and CBS- which had the exclusive right to televise professional games in the country. As these channels paid the expenses, it gave the networks tremendous bargaining power over the league and teams. The franchise owners were not entitled to any direct compensation from the television deals, and any change to the structure or revenue models of TV broadcasting could potentially affect the profitability of the Cowboys and other NFL teams.
Jones played a pivotal role in the evolution of the TV contracts, theology of the broadcasting rights, and direct monetization of televised games, thus contributing to the substantial growth of the NFL over the decades. Jones convinced ten other team owners to vote against giving the networks a refund that the latter had requested, mainly because they had not achieved the required ratings. The Cowboys CEO, however, convinced the other team owners to take a stand, thereby preventing a refund to the networks. Instead, they opted to negotiate a deal that doubled the already considerable television contracts and separate from broadcasting rights to pave the way for branding innovations in teams.
Gerry Cardinale, who moderated the conversation with the Jones family, praised the Cowboys for their unique ability to connect with fans in diverse parts of the world. This connection, combined with the branding innovations of the Cowboys franchise, has been an essential part of the team’s remarkable business journey. From a valuation of $140 million in 1989 to $9 billion in recent years, the Cowboys have grown from strength to strength, despite the various challenges they had to face in the early days. Through such strategic business decisions and collaborations, the team has carved out unique branding and marketing strategies that have not only grown the team’s value but have also enabled them to influence the NFL and make it one of the world’s most profitable sports leagues.
