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Will Jerry Jones’ Merchandising Risk Hurt Bottom Line?

Monday, 8 Nov 2010 | 3:50 PM ET

Dallas Cowboys owner Jerry Jones earned his reputation as a maverick when he butted heads with the league after signing his own sponsorship deals fifteen years ago. So when Jones decided to be the only owner to have his own merchandising deal, not many were surprised.

Dallas Cowboys owner Jerry Jones
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Dallas Cowboys owner Jerry Jones

It’s a high risk, high reward gamble.

While the rest of the NFL allows the league to cut deals for its licensed products, Jones’ team cut deals themselves.

In times of prosperity, running the supply chain helps them control costs and earn higher profits.

But that relies on selling well. The Cowboys are surely cutting deals based on projected volume and if the gear doesn’t move, they’re stuck with it. Think about projected sales of Tony Romo jerseys and where they are now with him out for the season. Think about sales of overall generic Cowboys items. Is anyone buying those with the team standing at 1-7, their head coach Wade Phillips just fired, in this economy?

How big is the Cowboys merchandising operation? They are located in spanking new facilities at the Dallas Fort Worth International Commerce Park. Square footage of the offices and area that houses all gear Dallas Cowboys? 400,123 square feet. In September, the team opened its 40th retail shop. Just imagine how the foot traffic has decreased in recent weeks.

Jerry Jones is hurting thanks to his on-the-field product. But he’s likely hurting just as much from what’s going on off of it.

Questions? Comments? SportsBiz@cnbc.com

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