We Sued the League for $700M: How the Cowboys Reshaped the NFL

The Dallas Cowboys are one of the biggest brands in pro sports across the world, but the franchise had to overcome barriers to achieve that feat. One of them was the NFL itself.

“The league had this thought process that all the teams and the league should have the same category sponsors,” Cowboys CEO Stephen Jones said during Day 3 of the SXSW Sports Track. “So rather than the Cowboys be with Pepsi and the league be with Coke, they felt once the league was Coke, then everybody had to be Coke. … You can imagine the leverage they had.”

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Cowboys owner Jerry Jones’ disruptive business mind wasn’t always appreciated early during his tenure with the team. The NFL claimed Jones entered into contract-breaching licensing and sponsorship agreements and filed a $300 million lawsuit against him almost 30 years ago. Jones fired back with a $700 million countersuit, accusing the league of blocking teams from conducting their own deals. They ultimately settled out of court, which opened the door for Jones, and the other teams, to conduct their own business.

“When we got into the league, we didn’t the right to (team logo) the star, neither did any other team,” Charlotte Jones, Cowboys executive vice president, said during the panel. “But going on the journey were two big defining moments in the NFL—what were clubs allowed to do with their own marketing rights and how much were the networks paying the league.”

The Cowboys were valued at $9 billion in the latest Sportico valuations. When Jones bought the team in 1989 for $140 million, it was far from a success. Reshaping how teams can execute sponsor deals wasn’t the only milestone Jones gets credit for; he also played a pivotal role in the league’s TV contracts, deals that have made the NFL the most profitable sports league.

“I look back and have so much respect for Jerry to have so much conviction to stand up,” Stephen Jones said about his father. “Back then, you had the three channels—ABC, NBC and CBS—and that’s who paid you and the [league] made it very clear that the last thing you want to do is upset them. … Jerry stood [up] and convinced 10 people out of 28 teams to vote against giving the networks a refund. … Lo and behold, you roll the clock forward, we didn’t give them a rebate and the TV contracts doubled.”

RedBird Capital Partners founder Gerry Cardinale, who moderated the conversation, said he always admired how the Jones family has connected with the global Cowboys fan base.

“There’s a lot of middlemen between ownership and fans,” Cardinale said to the Jones family. “I’ve always found one of your great strengths is taking that relationship with the customer, seriously. I invest in other industries, not just sports, and it gives me perspective.”

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