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Jerry Jones hits pay dirt in Dallas: NFL owner almost triples value of team, fulfills Super Bowl vow.

WHEN JERRY JONES galloped into Dallas in 1989, an unabashedly rich honky-tonker and a dreaded Arkansas Razorback to boot, the theme to "The Beverly Hillbillies" tortured thousands of minds.

Respected journalists joined with the general Texas populace in declaring Jones a real-life Jed Clampett rube -- an oil and gas speculator who lucked into riches and bought his way into the social stratosphere.

Together they pinched and shook themselves: Could this be the new owner of our beloved Dallas Cowboys?

"We'll win the Super Bowl within five years," Jones told stunned reporters shortly after the purchase.

They laughed, and then Jones did it in four.

Don't underestimate Jerry Jones.

Don Jack, his Little Rock lawyer and a partner in the firm Jack Lyon & Jones, remembers the fateful Thanksgiving when he made that very mistake. Jones was playing football for North Little Rock High School, and Jack was lined up on the other side of the ball for Little Rock Catholic High.

"He hit me as hard as anyone has ever hit me," Jack says. "That was my introduction to Jerry Jones, and I've kind of followed his activities ever since."

Jones' activities have been noteworthy.

In July 1991, his wealth was conservatively pegged at $180 million by Forbes.

More importantly to those who worship the "silver and blue," he has reinvigorated the Cowboys and brought back the team's winning tradition.

In the process, Jones has almost tripled the value of the franchise and rid the team of all debt.

Besides 95 percent ownership of the Cowboys, his assets include oil and gas interests, bank and real estate holdings, part of a poultry company and his own private jet. The Jones empire stretches from Dallas to Arkansas to California and Canada.

The Big Buy

It was the Texas real estate crash of the 1980s that inspired Cowboys owner H.R. "Bum" Bright to sell the franchise.

Jones, who wasn't even considered a prospect in the beginning, tells Arkansas Business he paid about $160 million for the total package, which is higher than most press estimates.

He dished out $65 million for 56 percent ownership of the National Football League club, $75 million for complete ownership of Texas Stadium in Irving and $20 million for the assumption of debt on the Cowboys' Valley Ranch headquarters and deferred player compensation.

Of the $20 million, only $5 million was paid for Valley Ranch--an incredible coup considering the Cowboys spent $20 million building it and still owed $10 million on the project.

Jones immediately set the franchise on TABULAR DATA OMITTED ear by firing Dallas' stoic legend Tom Landry, the Cowboys' coach since their inception. Jones replaced Landry with the bold, brash Jimmy Johnson, a Razorback teammate of Jones and the successful head coach at the University of Miami.

He then ruffled more feathers by eliminating two-thirds of the organization's staff.

"In 1989, sometimes even my closest friends wondered if I knew what I was doing," he says.

The cuts were supposed to free money for player salaries. The transfer began quickly when Jones shocked the country by paying a hefty $10.4 million to sign first-round draft pick Troy Aikman, the star quarterback out of the University of California at Los Angeles. The top pick of the previous year's draft commanded only $8 million.

Jones inherited a troubled franchise and his frenetic workaholic efforts over the first two years caused him to develop arrhythmia, an irregular heartbeat.

It's easy to see why. From 1983-87, attendance had fallen 24 percent to an average of 48,000, and the Cowboys plunged to a record of 3-13 in 1988. The team was losing $6 million a year by 1989 and Jones knew he had to restore a winning image quickly.

The Cowboys rewarded Jones with a sickly 1-15 record his first season, but better days were on the horizon.

In October 1989, the Cowboys traded star running back Herschel Walker to the Minnesota Vikings for five players and six draft choices.

Goodbye, Herschel

Most observers believe it was this gutsy call that turned the tide for the franchise. That year, the team broke even with revenues of $32 million, Jones says.

The Cowboys improved to 7-9 in 1990, and the team finally was in the black again.

Herschel Walker went on to mediocrity. Meanwhile, the Cowboys used the deal to draft running back Emmitt Smith, who has been the top NFL rusher for the past two seasons.

In 1991, the team finished 11-5 and won a playoff game.

All the while, Jones had been vacuuming up the rest of the ownership interest in the Cowboys.

In December 1989, he purchased another 12 percent interest from the Federal Deposit Insurance Corp. for an undisclosed price. The interest had been held by two partners whose assets were tied up in First Republic Bank of Dallas, which folded in 1988.

In 1990 and 1991, he bought the final 32 percent of the team at a bargain-basement fee of about $20 million.

Somewhere along the way he sold 5 percent interest to oil and gas business partner Mike McCoy, who is said to have relatively minimal liability associated with his ownership.

From 1988-92 Cowboy attendance jumped 33 percent. The team had sold out 23 consecutive home games by the end of the 1992 season.

This season, with the team on the way to a Super Bowl victory, revenues leaped to $70 million.

Jones has sold 80 luxury sky boxes in Texas Stadium for $47 million, allowing him to pay off most if not all of his debt on the venue. He has also $15 million in seating options to date.

The team that Jones purchased for $65 million four years ago is now worth about $180 million, according to Sports Financial, putting it among the top five of all U.S. sports franchises.

Most amazing, Jones says he no longer owes a dime for the franchise.

Hustle and Style

Jerry Jones, 50, has been a businessman since his earliest days, when he was reared on the second floor of a drive-in fruit stand at 2502 E. Broadway in North Little Rock.

His father, Pat Jones, nurtured the fruit stand into a grocery store, then into five stores. Later, the Jones family discovered insurance, forming Modern Security Life Insurance Co.

Under the tutelage of his father, teenage Jerry zipped around Missouri delivering speeches about the company to as many as 1,000 people at a time. At 21, he was executive vice president.

Jones' football performance earned him a spot as an offensive guard on the national champion Arkansas Razorback team of 1964. All the while, Jones was studying hard and helping out his father on the side, making more than a little pocket change.

Arkansas Athletic Director Frank Broyles, then coach of the Razorbacks, tells a revealing story about what happened after a road victory at Texas A&M University in College Station.

The Hogs were leaving the stadium when the Aggie student manager breathlessly ran to Broyles with a glittery object in his hand. "Coach, Coach, you left your diamond ring in the dressing room," he said.

"This isn't my diamond ring," Broyles said, "Look at the size of this thing. This must belong to Jerry Jones."

It did.

In 1965, Jones earned bachelor's and master's degrees in finance. It did not take him long to do something with the knowledge.

At the tender age of 23 he made a brazen bid to purchase the San Diego Chargers, then an American Football League franchise.

Jones actually managed to raise $5.8 million from a group of Detroit lenders -- some say questionable Detroit lenders -- but his father quashed the venture in the fear that his son was assuming too much debt.

Only two months later, the Chargers franchise was sold for $11 million and eventually merged along with the other AFL teams into the National Football League. There would be other chances.

The family insurance business was sold in 1970, and Jones made a cool $500,000 at the age of 27.

During his extensive travels, Jones heard much about the excitement of the oil and gas business. Knowing very little, he jumped in headlong at a time when seemingly everyone else in the exploration business was bailing out.

"I really believe that my family can learn, and once they know the ropes, can excel in anything," Jones says.

Oil and Gas Baron

Soon he had latched onto a unique geological theory and, beginning in 1971, drilled 14 consecutive successful wells in the Arkoma basin.

In the next nine years he drilled about 2,000 wells, mostly in Oklahoma. Only 700 were successful, but it doesn't take many.

A few years ago, Jones revealed that his Arkoma Exploration Co. spent about $24 million on drilling each year. He kept it afloat through prudence, keeping debts low and borrowing only against wells that produced.

In 1984, Jones made another sojourn into the world of professional sports as a boxing promoter.

The confident Jones boasted that unranked cruiserweight Otis Bates would take the ring by storm and capture the world championship at a fight in Little Rock's Statehouse Convention Center.

The largest crowd in the inauspicious history of Little Rock boxing gathered to see the bout, only to watch Bates mercifully knocked out in the 13th round.

Luckily, Jones' energy interests were easily paying the bills. He had sold 75 percent of his reserves by the mid-1980s.

"He was able to go from a turboprop plane to a Lear jet when everyone else was selling their planes," Broyles notes.

One of Jones' local purchases brought him into the glaring eye of the public.

In 1982, Sheffield Nelson's Arkla Inc. sold half of its interest in Arkoma basin gas fields for $15 million to Arkoma Production Co., owned by Jones and partner Mike McCoy.

Contracts obligated the utility to buy almost all of the gas Jones produced at $3 per thousand cubic feet -- far above the market rates, which were as low as 16 cents.

When gas prices were cut in half during the glut of the mid-'80s, Arkla was still locked into the higher prices.

In late 1986, after lengthy negotiations, Jones reached an agreement with Arkla to sell back some of the gas leases, along with other leases and ownership of the production company for $39 million.

But a codicil in the agreement allowed the price to rise if major oil and gas reserves were later found on the land.

In September 1989, Arkla hit pay dirt on the former Jones land and paid the price. The final tab was $175 million. Forbes estimates that Jones and McCoy made a $140 million profit on the deal.

It was so scandalous that Arkla ended up refunding $13.7 million to ratepayers in a combined legal settlement.

Steve Clark, the former Arkansas attorney general later convicted of theft, quipped at the time that "Jerry Jones made enough money from the deal to buy the Dallas Cowboys."

"That's not right," Jones says today. "The money I made off the Arkoma deal wouldn't have paid for our last year's No. 1 draft choice."

Jones says he only sold back 30 percent of the leases he bought from Arkla, and that he invested $50 million in the venture before he made the sale. When the deal was done, Jones still had two-thirds of his original oil and gas holdings now concentrated in Canada and California.

He says many people misunderstand his relationship with Nelson, figuring he used their friendship to work a lucrative deal. Just the opposite is true, Jones claims: He works so intimately in business matters that the people across the table become his close friends.

Family Man

Friends are constantly marveling at Jones' commitment to his children.

In 1982, his son Stephen began his senior year at Catholic High touted as one of the state's top quarterbacks.

Jones, the consummate fan, moved into office space on an upper floor of the Plaza West building overlooking Catholic's football field. Insiders noticed he always kept a pair of binoculars in the office.

Jones reportedly showed the same enthusiasm for the activities of his other two children, daughter Charlotte, who went to Stanford University in Palo Alto, Calif., and son Jerry Jr., who also went to Catholic and is now a law student at Southern Methodist University in Dallas.

"To my knowledge, Jerry never missed a single event," Don Jack says.

Soon, all three children will be working for the Cowboys.

Jones' amazing success is causing a lot of reflection in Dallas these days.

"I thought he was an absolute nut," reminisces Randy Galloway, a sports columnist for the The Dallas Morning News and one of Jones' early critics.

Galloway has since repented and seems genuinely impressed with the fact that Jones seems to hold no grudge, although he was deeply hurt by the hillbilly jokes.

Indeed, former Jones critics everywhere are again pinching themselves in dreamlike disbelief, and Galloway says even the most ancient of animosities against him have dissolved:

"You get to the Super Bowl and people even forgive you for being from Little Rock."
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Title Annotation:includes related article on Jones' friends; Dallas Cowboys' victory in the Super Bowl Game; National Football League
Author:Haman, John
Publication:Arkansas Business
Date:Feb 15, 1993
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