As a football team, the Dallas Cowboys are mired in mediocrity. In the 19 years since they last won the Super Bowl, their regular season record is a middling 146-142. The team made the playoffs seven times during that span, with only two wins to show for its efforts. The prognosis for the 2014 season is more of the same.
As a business, however, the Dallas Cowboys are extraordinary. Forbes values the team at $3.2 billion, ranking number one among all NFL teams, and there are few signs of slowing growth. Win or lose this season, the Cowboys will still be a profitable and healthy business by year’s end.
The franchise has achieved the gold standard in sports business: making money and remaining relevant regardless of their performance on the field. Here are seven strategies that underlie the Cowboys’ success as a company:
- Distinct Identity: Widely known as “America’s Team,” the Cowboys have become part of the American cultural fabric, much like Coca Cola, Apple, and Disney. When a team has a strong and differentiated identity, especially one that evokes patriotism and nostalgia, it ensures loyal connections through good times and bad.
- Star Powered Narratives: The Cowboys are a reliable source of dramatic storylines for the insatiable sports media, keeping the team top-of-mind throughout the year. Starring in leading roles are owner Jerry Jones as P. T. Barnum, quarterback Tony Romo as the star-crossed quarterback who can’t seem to realize his full potential, and wide receiver Dez Bryant as the prima donna on the sidelines. Put them together, add in other supporting roles (e.g. coach Jason Garrett as the man on the hottest seat in sports), and the result is a real-life soap opera broadcast live from Dallas.
- Maximized Media Rights: Due to the NFL’s rights agreements with the major networks, the Cowboys will receive more than $250MM in revenue per year from 2014-2017, an increase of over $62 million from the 2013 season. Because there was a $133.9 million salary cap for Cowboys player compensation in 2013, this all but ensures profitability for the team whether they win or lose.
- Engaging Sportscape: In the battle versus the fan cave, Jerry’s World, also known as AT&T Stadium, offers compelling reasons to get up off the couch and buy a ticket. Opened in 2009, this sports playground is headlined by the largest Jumbotron in the universe, roomy luxury suites, an art gallery that has become a destination unto itself, and new in-stadium mobile experiences powered by AT&T. Jerry’s World is not just a stadium, but a piece of pop culture.
- Public-Private Partnerships: Jerry Jones and his staff are adept at working with local governments to offset the costs of their state-of-the-art facilities. The city of Arlington funded $325 million of the $1.2 billion cost of AT&T Stadium, and the city of Frisco is paying $115 million to build a new practice facility/team headquarters in their city, with the Cowboys organization handling any overages.
- Robust Sponsorship Roster: Three consecutive seasons of 8-8 and no playoff appearances didn’t deter Hublot and Carnival Cruise Lines from becoming new sponsors of the Cowboys this offseason. The team continues to offer each sponsor the ability to target lucrative customers and generate a significant return on investment for its marketing spend irrespective of the team’s record.
- Commitment to Inclusivity: Sports, like almost every industry, is experiencing demographic shifts in the marketplace, specifically with regard to the growing Hispanic population. The Cowboys have been first movers in embracing Latino fans in the United States and Mexico through a variety of outreach programs.
No sports business is immune to consistent losing. If the Cowboys fell victim to multiple seasons of futility (think 3-13 for three consecutive years), the fan base and revenue strength could weaken. However, these are extreme and unlikely circumstances. For the foreseeable future, the Cowboys strategic approach will ensure continued success during periods of mediocrity and position the team to reap even greater rewards when the pendulum of winning swings back in their favor.