The Dallas Cowboys are valued at a staggering $7bn despite a losing culture and a penchant for off-field scandal. Is the world’s richest sports team really all hat and no cattle?
Before he was the title character of an Emmy-winning series, Ted Lasso was the star of a 2013 marketing campaign for NBC after the network was awarded the broadcasting rights for the Premier League in the United States.
The ad followed the same fish-out-of-water premise as the show it later inspired: Lasso, played by Jason Sudeikis, was a red-blooded American football coach hired by Tottenham Hotspur struggling to grasp the basics of “soccer”.
In one scene, Lasso gets briefed by his assistant on England’s two most storied clubs.
Manchester United, he is told, is “super rich” and “everyone either loves them, or hates them.”
“Dallas Cowboys,” Lasso replies, playing a round of cross-sport word association.
Liverpool “used to be great”, the assistant instructs, but “haven’t won a title in a really long time”.
“Also Dallas Cowboys,” Lasso says.
The set-up could use an update. Liverpool, of course, have since returned to the summit of both England and Europe. Manchester United are as polarizing as ever – and still spend gobs of money – but the club inspires more schadenfreude among its rivals than it did when the ad first aired.
The Cowboys, however, remain as they were: loved and hated in equal abundance, a generation removed from their glory years and, above all, “super rich”.
America’s Team will report to training camp next week in Oxnard, California, to begin preparations for the 2022 season, 27 years since their last Super Bowl-winning campaign. Dallas have posted a 4-11 playoff record since then and have not advanced beyond the second round of the postseason. Thirteen different franchises – including two of their hated division rivals – have won the title since the Cowboys’ last championship season, and Dallas were eclipsed this century by both the Pittsburgh Steelers and New England Patriots for most Super Bowl wins all-time. There have been off-field ignominies, too, most recently a $2.4m settlement stemming from allegations that a Cowboys executive filmed the team’s cheerleaders in the locker room.
But neither sub-par play nor scandal have slowed the Cowboys’ growth. The team’s star burns brighter than other supernovas of American sports, consuming the national consciousness to a degree that even the New York Yankees or Los Angeles Lakers can’t match. Dallas will play in five primetime games this season, the maximum number for a team to play in the marquee slot, and the team is a perennial A1 topic in sports media no matter their record.
“They’re still ‘America’s Team,’” said Kurt Badenhausen, a reporter at the sports business website Sportico. “They’re still the most watched team. Every network wants as many Cowboys games as they can get. They have the largest fanbase in the country.”
In the financial column, the Cowboys are undefeated; even amid a Super Bowl drought, it still rains money in Dallas. The Cowboys have topped Forbes’ list of the most valuable sports franchises every year since 2016. And in an era when teams are being sold for ever-swelling sums, the Cowboys would likely command the heftiest price tag, should they ever be put on the market. Forbes pegged the Cowboys’ worth at $6.5bn, but that is almost certainly too low.
Jerry Jones, the team’s indomitable owner, said in May that he believes the Cowboys could fetch at least $10bn on the open market – a decent return on the $150m he paid to take over the franchise in 1989.
Jones made it clear that he will “never sell the Cowboys”, but his sky-high valuation of the team is a testament to the financial might of America’s most popular sporting league.
“It really comes down to the economic structure of the NFL,” said Badenhausen, who helped start the annual ranking of the most valuable sports franchises at Forbes in 1998.
The NFL is the richest sports league in the world. It rakes in billions of dollars every year, most of which comes from its mammoth deals with broadcast and streaming partners, and the money is shared evenly among its 32 teams. Badenhausen said that the league generated roughly $18bn in revenue in 2021, putting it on track to reach its goal of $25bn by 2027. Last year, the NFL signed a $113bn media contract with CBS, Fox, NBC, ESPN and Amazon that runs through 2033, a deal that will bring each team about $300m annually.
The deal affirmed the NFL’s status not only as the biggest draw in American sports, but also the country’s top entertainment attraction. Seventy-five of the 100 most watched television programs in the United States last year were NFL games.
“The sport itself is so popular,” said Marc Ganis, a sports business consultant who has helped broker team sales and stadium developments throughout the NFL. “The games are competitive, the players keep getting better and it’s something that’s become a part of American culture. If it weren’t for that, the rest wouldn’t fall into place.”
The NFL imposes a salary cap that limits the amount of money each team can spend on players, a feature that has promoted parity on the field and brought greater profits to the owner’s box.
Badenhausen said the combination of the league’s staggering riches, and how that money is spent, has resulted in higher valuations for NFL franchises than even teams with a larger global footprint. More than half of the top 50 teams in Forbes’ most recent rankings came from the NFL, including three in the top 10.
“These big European clubs are huge global brands, but the valuations don’t keep up with the size of the brand because of the economic structures of these clubs and what you have to spend to be competitive,” Badenhausen said. “You’ve got a handful of clubs in an arms race with no restrictions.”
The recent sales of the Denver Broncos and Chelsea FC were illustrative. Chelsea, one of England’s “big six” clubs and based in a major European capital, went for $3.2bn. The Broncos, ranked by Forbes as only the 10th most valuable team in the NFL and located outside a top US market, were sold for $4.65bn.
“Chelsea is a much bigger brand globally than the Denver Broncos, but because of the economics, a second quartile NFL team ends up selling for more than Chelsea did,” Badenhausen said.
The economic structure that has enriched the Cowboys and the league’s other 31 teams is one that Jones played a leading role in constructing. In 1993, Jones orchestrated a backroom deal with Rupert Murdoch that resulted in Fox replacing CBS as one of the NFL’s television partners. CBS offered the league less than what it had previously paid for the broadcasting rights. Murdoch, with Jones in his corner, secured the rights for Fox in a deal worth $1.6bn over four years – 60% more than what CBS offered.
“Jerry brought in Fox. Fox dramatically increased the rights fee. CBS lost the NFL,” Ganis said. “One story tells you both about the Cowboys and the NFL.”
Jones took the NFL to court in 1995 over the league’s rules that limited a team’s ability to strike its own endorsement deals. Looking to capitalize on the Cowboys’ iconic brand, Jones negotiated stadium sponsorships with Pepsi, Nike and American Express. The NFL sued Jones, contending that those deals ran afoul of the league-wide own sponsorship arrangements. Jones responded with his own antitrust lawsuit against the league, arguing that the NFL was effectively running a cartel that controlled the teams’ logos and trademarks.
The two sides settled, which allowed Jones – and every other league owner – to enter into their own sponsorship agreements.
“He changed the economics of the league in terms of what teams could do,” Badenhausen said. “He went out and sold the Cowboys on the sponsorship market harder than anybody else. As a result of that, and because they have the brand to back it up, he’s been able to monetize.
Under Jones, the Cowboys have expanded their fiefdom in north Texas to create even more sponsorship deals and commercial opportunities. The team opened a sparkling new stadium in 2009 that boasts the capacity to seat more than 100,000, and a new 91-acre practice facility in 2016 that doubles as the team’s world headquarters.
The Cowboys have also been successful at growing their fanbase outside Texas. It has long been a source of amusement to many in the Lone Star State that the team has plenty of support in the Washington DC area, the home of their divisional rivals, the Commanders. Some put that down to the fact that the Cowboys were an integrated team from their birth, unlike Washington’s NFL team, and Dallas have a strong following among DC’s Black population.
Badenhausen put the Cowboys’ worth at $6.92bn in his team valuation rankings for Sportico last year, and said they were poised to be “the first team in North American sports to post $1bn in annual revenue.”
Ganis believes that Jones would get at least $8bn if he put the Cowboys on the market, saying the team’s value has been driven upward by those new facilities and the general prosperity of the league.
But as Ganis sees it, the biggest reason for that valuation is the man who raised the team into a cash cow.
“The Cowboys are built on an extraordinary foundation,” Ganis said. “You add Jerry Jones to that alchemy, and it becomes something that is extraordinary on a global basis.”