Cat & Mouse With Tom & Jerry

In a rare joint interview, pro sports moguls Tom Hicks and Jerry Jones talk frankly about cash flow, egos, and salaries—their players’ and their own.

Jerry Jones and Tom Hicks are rare birds: professional sports team owners who—at least in Texas—are as famous as their players. The often-grandiose exploits of the 56-year-old Jones, a former Arkansas businessman, have been chronicled by the media ever since his infamous press conference in 1989, when he boldly announced that as the new owner of the Dallas Cowboys he would be in charge of everything from the salaries of his superstars to their “jocks and socks.” The 53-year-old Hicks, the co-founder and CEO of the voracious Dallas-based investment firm Hicks, Muse, Tate, and Furst, tries to keep a lower public profile, but since his purchase of the Texas Rangers in 1995 and the Dallas Stars in 1998, he too has felt the glare of the spotlight.

Both men have proved that they can build winning teams: Jones’s Cowboys have won three Super Bowls, while Hicks’ Stars just won their first Stanley Cup and his Rangers inch ever closer to an American League championship each year. Yet despite their similarities—they’re both extraordinarily competitive, they both own mansions in Dallas within a couple of miles of each other, they both love custom-made cowboy boots—Jones and Hicks don’t know each other very well. “We haven’t had a lot of opportunities to compare notes,” Jones admits.

Until now. In mid-July Texas Monthly Biz got the two men together at Hicks’s office to discuss the business of sports—a business that is often difficult to understand, even if you write the checks.

Texas Monthly Biz: Mr. Jones, when you bought the Cowboys, they were reportedly losing $1 million a year .

Jerry Jones: That’s $1 million a month.

TMB: A month?

JJ: $1 million a month in cash flow. Tom wouldn’t be very proud of me if he reminds himself of what kinds of business decisions I made when I bought the Cowboys. As a matter of fact, Tom, I think you told me one time that you briefly took a look at purchasing the Cowboys before I did, kind of surveyed the land on them, and decided they didn’t look too good.

Tom Hicks (smiling sheepishly): I didn’t know enough about sports then to appreciate their hidden value.

TMB: I have heard rumors, Mr. Jones, that you are now making as much as $20 million a year off the Cowboys in operating profits.

JJ: Let me just say that it’s a real source of pride to be perceived as being financially sound and successful.

TMB: Well, considering in large part the things you’ve done, such as fighting the NFL so that you could make your own deal with Pepsi to advertise at Texas Stadium, isn’t it true that a professional sports team owner can now make money hand over fist?

JJ: No. Don’t confuse cash flow with profits. The money we are making is going where it ought to be going, and that’s back to the players on the field. I’ve spent more on up-front cash bonuses—not salary, but cash bonuses to the players—than it cost me to buy the whole football team, which was about $170 million.

TMB: What about you, Mr. Hicks? Is it true that the Stars and the Rangers, despite their successful seasons, are not making any money?

TH: On an operating basis we’re losing money.

TMB: Even with the Stars winning the Stanley Cup this year, you’re not going to make a profit?

TH: If the Stanley Cup had gone to eleven games, I think we’d have made money. But at least we’re going to lose a lot less than I thought we were going to lose at the beginning of the season.

TMB: So why do you do it? Surely you can find better investment opportunities.

TH: I’m building value over the long term. The Cowboys are the perfect example. When they got started as a franchise, they had very poor attendance in the Cotton Bowl, and it wasn’t clear that they were even going to survive. But over the years they got great players and bonded with the fans, and they created a franchise that today is probably one of the top in football. We’re trying to do that with the two sports I’m involved in.

TMB: But aren’t you also planning to create a unique sports-media empire that could make you a great amount of money?

TH: Yes, we’re starting to integrate the management of the two teams so that many functions can be done by the same person. Then we’ll have all of our teams on the same cable network, and we’ll own the vast majority of the network. So we’ll try to provide a strong sports venue for the people who want to watch sports other than football.

TMB: What aspects of running a sports franchise were you not prepared for?

TH: The first thing was the public notoriety that comes with owning a franchise. There is an invasion of your privacy and an invasion of your family’s privacy, but that’s the pact you make with the fans.

JJ: I was not prepared for the negative criticism. I thought that when somebody came into the community and made a $170 million equity investment in a football team, people would say, “Boy, we’re glad to have you aboard.” I wasn’t prepared to have my butt kicked the way I got it kicked personally at that time. It surprised me. But it was probably the best thing that ever happened. It toughened me up and made me realize that I shouldn’t make any decisions around here based on how they look in the newspaper, because fans and the media are going to kick your fanny anyway. The criticism just made me even more driven to want to show ’em, to try to do better.

TH: I think the other thing I wasn’t prepared for was the rapid escalation of players’ salaries caused by my fellow owners. You’d think they would have more sense than to pay what they do, and of course they probably say the

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