The Curious Case of the Profitable Losers

By Marcus Shockley

Two stories emerged this week which fell into the ‘ho-hum’ category in a sports media landscape more often consumed with free agent signings and recruiting scandals than the actual money engine that makes it all go.

Two cases of sports businessmen who make loads of cash without being able to win – or some cases, even play – games.

Jerry Jones
Consider first the story of Jerry Jones, owner of the Dallas Cowboys, who purchased the Texas-based pro football team in 1989 for $150 million, and this week, Forbes magazine estimated that the Cowboys franchise was worth $2.1 billion. Now, Forbes’ valuations are not considered professional by any stretch of the imagination, and there’s some legitimate questions as to exactly how they would justify that number, but let’s look at the real numbers underneath: the Cowboys brought in $500 million in estimated revenue last season, by far the highest of any NFL franchise, and over $120 million higher than the 2nd-place New England Patriots.

Jerry Jones might not be much of a GM (and doesn’t want to hear otherwise) but he certainly knows how to turn a profit on the Cowboys. It’s interesting to note that Jones was highly leveraged when he bought the Cowboys, so his wealth today is almost entirely built from owning the team, unlike many current owners who arrive with their pockets already flush. Jones pursued sponsorship deals that the NFL fought him on, brought in massive amounts of new revenue and changed how the league actually markets and manages its properties. But the real caveat is that the Cowboys, who enjoyed initial success with two Super Bowl wins, have been a mediocre contender for the vast majority of Jones’ ownership.

One can only imagine what Jones would be able to do if the Cowboys can actually become a consistent winner. Jones does seem to have a love for the Cowboys that most owners do not have for their own teams, but perhaps the NFL should strongly consider Jones as the next league commissioner – as long as he could sever himself from his beloved Dallas franchise.

Silna But while Jones has proven to be a master at raking in profits while his team is abused on the field, even he is second fiddle to Ozzie and Daniel Silna, the former owners of the ABA’s Spirits of St. Louis. The Silnas have made massive amounts of cash over the years due to a bargain struck when the NBA and ABA merged, way back in 1976.
The Silnas’ team was to be excluded from the new league, and only accepted the terms after negotiating a percentage of the profits from the television revenue for the remaining ABA teams. The kicker? The deal is in perpetuity, as long as the NBA is in existence. That means the Silnas have been making millions in revenue without actually having a team. The only reason this has come to light now is that the Silnas are suing the NBA because they are getting cut out of international broadcast revenue. It’s not clear how successful the Silnas will be in getting a chunk of that revenue, as companies frequently will claim new sources of revenue are not part of established contracts, as Howard Stern found out with SiriusXM earlier this year.

But it’s not all wine and roses for the Silnas; they were some of the victims of Bernie Madoff’s Ponzi fraud which lost billions of investor funds.

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