It’s not about sport. It’s about spectacle. Source: Author

Diary of a Brand: the Dallas Cowboys

How the Cowboys built the most valuable brand in sports

Sports franchises make for good business. Just ask the billionaires who tend to own them. Since 1960, sports franchises have delivered an annual return of 13.1%, handily beating the US stock market (10.54% return over the same period). In other words, every $1 invested in a sports franchise in 1960 would be worth $2,640 today.

However, one team has managed to achieve a higher valuation than any other team in the world — and it’s not even close. According to Forbes, the Dallas Cowboys are valued higher than Real Madrid, the New York Yankees, and even the New England Patriots.

How? Simple: the Cowboys make the most money.

In 2023, the Cowboys delivered $550M in profit, higher than the next ranked New England Patriots ($250M) and LA Rams ($243M) combined.

The Dallas Cowboys lead the world in sports valuations. Source: Forbes

Even more impressive: the Cowboys do this despite not being very good. (And I say this as a fan). They have not made it to the Super Bowl in decades. Their performance this year is… questionable. And they were widely regarded as the most hated NFL team until Kansas City overtook them in 2024. And yet, the Cowboys are both the most profitable team in the world, and the most popular. The Cowboys are the most searched NFL franchise globally on Google. They have the most diverse revenue streams, and are the only team that does not depend on NFL media sharing for a majority of revenue.

How does a non-winning team manage to become the most liked, most hated, and most profitable team in the world?

In this Diary of a Brand, I am introducing a new framework on Entertainment-driven brands, which models how companies from the Dallas Cowboys to Formula 1 to Hailey Bieber’s Rhode Skincare grow and monetize their fanbase. It occurs in (3) phases:

1. Build an invested audience: Entertainment-driven brands build an audience who wants to see what they will do next.
2. Distribute across platforms: Entertainment brands invent new distribution points for their content. For example, Disney’s theme parks, movie studios, merchandise, and games all increase the consumption potential of any single concept.
3. Capture value: Entertainment brands monetize their audiences by taking ownership of distribution points, and creating new business models around them.

Entertainment Brands are audience first. Source: Michelle Wiles

How the Cowboys became the most valuable sports franchise in the world:

Step 1: Build an invested audience

Since their inception, the Cowboys employed smart media strategies to attract an audience. Many of these can be attributed to former CBS executive and Cowboy’s General Manager Texas ‘Tex’ Schramm (yes, his name was literally Texas). Schramm pitched the idea of the iconic Dallas Cowboys Cheerleaders to boost attendance in Dallas’ early years. The dance squad became so popular that it was quickly copied by other teams and became a content franchise on its own. Schramm also invested in the Cowboys radio network — which became the largest of any sports team by 1979 (Source: Pro Football Researchers). And on TV, Schramm pushed for the Cowboys to always play in the second game (3PM Central Time) when there were fewer competing games, to play annually on Thanksgiving Day, and to play in the Northeast division with the New York Giants, Philadelphia Eagles, and Washington Redskins, to gain access to the largest television markets:

“On Thanksgiving, what else is anybody going to do?” [Schramm] told the Tribune. “You don’t have presents to open. You have dinner and watch football.” — AZCentral

“Dallas was going to stay in the East because they always wanted to be in the East, going back to about 1961. Why Dallas in the East and Minnesota in the West? They probably liked the exposure of the Eastern media. “— The Athletic)

Finally, Schramm solidified the nickname ‘America’s Team,’ which both reinforced the lore of the Cowboys to fans, and incited annoyance from non-fans:

Schramm did not invent the “America’s Team” tag … but he was quick to recognize the promotional value of the term that NFL Films used for the title of the Cowboys 1968 highlight film. Among other things, Tex immediately distributed 100,000 souvenir calendars stamped with the term “America’s Team.” — Pro Football Researchers

Schramm’s impact went beyond the Cowboys and to the NFL at large. For example, he ensured the game was easily watchable on television by initiating multi-color striping of the 20- and 50-yard lines, painting the goal posts vivid yellow, and including arrows pointing to the end zone (CBS News). He pushed for the use of instant replay, viewable play clocks, and referee mics, which increased interest and credibility of referee calls. Schramm was also behind the divisional structure and wild-card selection for playoffs, which enhanced rivalries within divisions (games matter twice as much when you are playing in your division) and maintain interest throughout the season (Source: NYTimes).

“Tex was the best modern-day promoter in the game…perhaps was singly responsible for pushing pro football ahead of baseball and every other sport in our national consciousness” — Fran Blinebury, Houston Chronicle

“I truly believe [Schramm] had as much, or more, to do with the success of professional football as anyone who has ever been connected with the league.” — Don Shula, ESPN

Step 1: Build an *invested* audience

Even if Schramm could put the Cowboys in front of growing audiences, the team still needed to figure out how to start winning games to get their audience invested in the team. That came from Cowboys Head Coach Tom Landry and his director of personnel Gil Brandt.

Brandt, considered the “Godfather of modern football scouting” looked to non-usual sources to help the Cowboys gain an edge in players. He recruited athletes from small schools, from outside of the US, and from other sports like track and basketball. Under Brandt, the Dallas Cowboys were the first team to introduce computers and analytics into player evaluations (even before Moneyball) and to layer in psychological examinations, which became the basis for the NFL Scouting Combine:

Using computers for scouting and evaluation? Brandt did that. Finding prospects at small schools and in other sports? Brandt did that. He used psychological testing in evaluation, developed a scouting system that spread to other teams and helped to create the NFL Scouting Combine which continues to be the epicenter of the pre-draft evaluation process. — NFL

[Brandt] drafted eight Pro Football Hall of Fame players, starting with his first ever selection, Bob Lilly, in 1961. The argument can easily be made that no one has been responsible for bringing more talent into the National Football League. — Dallas Cowboys

The Cowboys also innovated in how they used the players. They were the first team to employ a dedicated player for kickers and punters. Before that, teams pulled in other players for kicking duties (Source: CBS News). Coach Landry, already known for inventing the 4–3 defense while serving as defensive coordinator for the Giants, refined his defensive strategy into the “Flex Defense,” cementing the nickname ‘Doomsday’ for the Cowboys defense.

It seemed no matter where the runner went, there stood some Cowboy waiting to make a tackle. …the Cowboys’ defense became known as “Doomsday.” Landry was called a genius, and the team began winning Super Bowls. — DMagazine

The team innovations worked. After only 5 years in the league, the Cowboys were a winning team. After 10, they won their first Super Bowl.

Step 2: Distribute across platforms

While Schramm, Brandt, and Landry focused on audience, Cowboys owner Clint Murchison brought a key innovation to the table: Texas Stadium. In 1971, Murchison opened the first stadium with luxury suites, sky boxes, personal seat licenses, preferred parking, and a stadium club, offering fans new ways to experience the game.

Step 3: Monetize

Texas Stadium offered more than a new experience. It was start of a new team-owned revenue streams, separate from NFL’s revenue-share for media:

Texas Stadium also ushered in the luxury suite era on a grand scale. With 176 skyboxes, the stadium allowed the Cowboys to generate significant income that was exempt from the NFL’s team revenue-sharing policy. — Sports Business Journal

As with many of the Cowboy’s innovations, the stadium was quickly copied by other leagues. Now, luxury seats are a key source of team revenue, with the Cowboys leading the NFL in luxury suite revenue of ~$130 million annually.

The Entertainment Brand Model, early Cowboys:

Thanks to the leadership of Murchison, Schramm, Brandt, and Landry, the Cowboys were able to build out a large and invested audience, distribute it across TV and stadium experiences, and earn revenue from both shared NFL deals and unshared stadium revenues.

Caption: Schramm, Landry, Murchison and Brandt built a large and monetizable audience — both for the Cowboys and the NFL. Source: Michelle Wiles

The Jerry Jones Era: Monetizing the Brand

The Dallas Cowboys did not emerge as the most valuable team until they were purchased by Jerry Jones, who has run the team since 1989. Jones is a controversial figure, not least in the eyes of Cowboys’ fans. However, this essay is not about Mr. Jones’ team management, but his ability to make the Cowboys the most valuable franchise in the NFL and the world — which he has handily delivered.

Prior to Jones, the NFL ran all sponsorships and merchandise centrally — signing deals and distributing revenue among all 32 teams. But the 1995 Cowboys, fresh off of two Super Bowl wins, decided to run sponsorships on their own, signing American Express, Pepsi, and Nike, and turning assets like Texas Stadium and his coach’s uniforms into new revenue streams:

[Jones] knew that while revenue from sponsorship deals with the NFL was split evenly among the teams, he could keep all stadium sponsorship money. Jones became the first NFL owner to get his own sponsorship deals at Texas Stadium. — CNBC

One ahead-of-its-time element of Dallas’ Nike deal was that Nike would pay the Cowboys coaches to wear its apparel on the sidelines — CBS Sports

Jones did not shy at the opportunity to turn his new sponsorships into spectacle:

Mr. Jones flaunted his deal during a nationally televised Monday night game against the Giants at Giants Stadium. He distributed a news release that blared “Cowboys Owner Bucks N.F.L. Again,” and strode to his team’s sideline with Phil Knight, the chairman of Nike, and Monica Seles, the tennis star and Nike endorser. — NYTimes

When the NFL sued for breach of contract, Jones countersued, accusing the NFL of antitrust, and asserting his ownership of Texas Stadium:

“In my mind, there is no issue of the rules not being followed …”Nike, Pepsico and Dr. Pepper struck sponsorship deals not with the team but with the stadium and therefore did not fall under N.F.L. restrictions”… Mr. Jones said he had no problem with sharing television and gate revenues. — NYTimes

Mr. Jones has even called for the end of NFL Properties, to encourage each team to pursue individual entrepreneurial success. “You don’t have to be a rocket scientist to do better than they did,” he said. “You wake up in the middle of the night thinking of ideas.” — NYTimes

The NFL eventually backed down, and Jones ushered in a new world of income for teams willing to invest in their own sponsorable platforms like stadiums, and soon after, merchandise.

In 2001, the NFL signed a merchandise deal with Reebok, with a clause that allowed each team to spin off merchandise on their own. The Cowboys were the only team to exercise that option. Importantly, the Cowboys did not simply monetize their merchandise; instead, they followed the Entertainment Model from the beginning and continued to invest in audience and distribution for their merchandise. For example, last year the Cowboys collaborated with Post Malone on a line of Cowboys themed clothing, pulling in audience attention. Then, they opened new distribution points for the collab — partnering with cult chicken chain Raising Canes to offer a Canes x Post Malone x Cowboys themed restaurant, selling chicken fingers, Post Malone merch, and vintage Cowboys collectables.

The Cowboys x Raising Canes x Post Malone Restaurant. Source: Raising Canes

Today’s Cowboys may be best known today for AT&T Stadium, sometimes referred to as Jerry World. In 2009, Jones built on Murchison’s stadium legacy by opening the largest stadium in the NFL, featuring the world’s largest HD video display and expandable capacity of over 100,000. Like Texas Stadium before it, AT&T stadium is a significant source of revenue via ticket sales and luxury seating, plus an estimated 17–19 million annually for AT&T’s stadium naming rights. The stadium also includes new platforms, such as branded bar Miller Litehouse, which contributes to the beer brand’s $20 million annual sponsorship of the Cowboys.

Stadiums bring in non-NFL revenue, too. Everything from other sports games to Taylor Swift concerts to Netflixs’ recent boxing match between Mike Tyson and Jake Paul has taken place at AT&T stadium — diversifying Cowboys’ revenue beyond the sport of football itself.

A CNBC analysis on the difference in valuation between the LA Rams (8 Billion) and LA Chargers (6 Billion) attributes most of their valuation difference to the fact that the Rams own SoFi stadium, while the Chargers merely rent it. As a result, the Rams take home 85% of stadium revenue from luxury suites and partnerships, as well as all revenue from non-NFL events (Taylor Swfits’ Eras tour supposedly drove $4M in revenue per show). And, the Rams get the full $625M from SoFi’s 20 year naming rights deal.

Owning platforms is good business.

Creating a modern media machine

While Jones is known for his monetization of the Cowboys, he has also continued to invest in building the Cowboys audience. Jones is known to personally host celebrities at games, and his practice of walking celebrities through tunnels creates media moments that attract more attention.

John Legend and son at a 2024 game. John Travola and Jerry Jones. Source: The Dallas Morning News

The Dallas Cowboys also maintain one of the largest in-house media teams in the league, who produce social media content, documentaries and behind the scenes footage. It’s tough to assess the Cowboy’s exact spend on media as NFL teams are private enterprises. But, a search on Linkedin reveals that the Cowboys employ 242 employees in Marketing and Communications. The average number of Marketing and Comms employees for the next 6 most valuable teams? 135. Meaning, the Cowboys elect to staff 100+ additional content producers, marketers, and designers than other teams.

The Cowboys staff ~100 more people in marketing and comms than their competition. Source: Linkedin

Cowboy’s HQ, The Star, supports their marketing and comms team with a full production infrastructure including a broadcast studio, podcast studios, multiple editing suites, and corporate event spaces, as well as space for partner brands to shoot content and host live events. The investments in media and production pay off, as the Cowboys boast the largest social media following of any NFL team across Instagram, Facebook, X and TikTok.

And, in proper Entertainment Brand fashion, the Cowboys have turned even their headquarters into a monetizable distribution platform. The Star includes the Ford-sponsored Ford Center, which hosts Cowboys practices and local sports games, and the Tostitos Championship plaza, a ‘destination for connecting fans with the Dallas Cowboys.’ There’s also a hotel, a members club, a fitness center (Cowboys Fit, one of 5 locations), a second MillerLite House, and a shopping, events and entertainment center, with sponsored events and activities (The Star District).

“Jerry Jones was a trailblazer in really thinking about a sports team more like a business, like a Disney,” said Robert Covington, founder of Braemont Capital “There’s merchandise, there’s the media rights, there’s the fan experience … there’s the real estate around the stadium.”

— Dallas News

Comparing NFL Team performance

I attempted to break down revenue for the Cowboys and other top teams. It’s not perfect — NFL teams are private enterprises. But each team publicly receives $480 million in shared media revenue from the NFL. Topline figures for teams are published regularly, along with occasional facts about specific revenue streams, such as the Cowboys leading in luxury suite revenue with estimated 130M annually, per Forbes. Other individual revenue streams are estimates, so reference as your own risk. However, one thing is clear — the Cowboys have stronger, more diversified business than any other team. And it’s not even close.

Source: 2024 revenue breakdown for the highest valued NFL teams. Source: Author, Forbes, CNBC, estimates.

The Entertainment Brand Model: Dallas Cowboys

The updated Entertainment Brand Model breaks down how the Cowboys are able to build such a strong business — above and beyond other NFL teams. In short, by investing in their audience, distributing across multiple platforms, and monetizing those platforms with new business models. Looking at the two major phases of Cowboys’ ownership (Murchison, Jones) also reveals how important it is to invest in audience-building up front — which is monetizable in the long run.

How Dallas translated audience into value. Source: Michelle Wiles

Can other brands apply the Entertainment Brand Model?

Absolutely. But it requires a shift in thinking. The typical business strategy is product first: develop a new product or service, and then craft marketing around it.

Entertainment brands are story-first. They spend time building an audience, crafting spectacle that audiences can’t help but follow. Then, they monetize that audience via sponsorship and new products. This was the 1990s Cowboys, with cheerleaders and rivalries and Super Bowls. It’s today’s Cowboys, with a massive stadium and celebrity appearances (unfortunately no Super Bowls). But it’s also any influencer led-brand. Hailey Bieber and Kim Kardashian are masters of audience-building on social media and celebrity gossip magazines, which they then monetize with products from Rhode and SKIMS.

Kim Kardashian’s SKIMS and Hailey Bieber’s Rhode Skin

Hailey Bieber launched Rhode after she already had a significant audience on social media. The media’s obsession with contrasting Hailey Bieber with Selena Gomez, as well as Hailey’s investments in editorial-level content continue to fuel interest, which she then monetizes via sales of her Rhode skincare products.

How Rhode built their business audience-first. Source: Michelle Wiles

Other sports brands are also following suit. Take F1, the fastest growing sport in terms of revenue. Much of their recent popularity can be attributed to their Netflix series, which brought F1 to life through personalities and rivalries.

F1’s show Drive to Survive and distribution via Netflix brought in a large audience that could be monetized via sponsorships. Source: Michelle Wiles

How to apply the Entertainment Brand Model

1. Build an invested audience via stories

People do not want to pay attention to brands. In the case of F1, most people didn’t even want to pay attention to a thrilling car chase. What do people care about? Often, it’s other people. Which explains why hiring celebrities and influencers is such a popular marketing strategy.

For your brand: What stories can you tell about your brand that involve people?

Emphasis on story. Simply hiring a celebrity to endorse your product is not a story.

Alex Cooper of the explicit podcast Call Her Daddy getting married? That’s a story.

And SKIMS got a fair share of audience when they partnered with Cooper on a wedding line right before Cooper’s highly publicized wedding.

SKIMs x Alex Cooper wedding line. Source: SKIMS, Alex Cooper

Brands can also invent characters to tell stories about.

Chipotle branded themselves as a real-food, farm-to-burrito chain with their ‘Farmer’ series. Dunkin had a strong Halloween season on social media thanks to the ‘sexual spider donut’ character they invented. If you want to build a bigger audience, consider briefing a marketing freelancer on Fiverr to develop content series and potential new branded characters for your brand.

Source: Chipotle, Dunkin

2. Distribute across platforms

Savvy entertainment brands don’t limit their content to a single channel. Instead, they invent new channels to engage with audiences. The core example is Disney. Every piece of Disney IP is translated across multiple distribution points. It’s a movie, a broadway show, a video game, a theme park, a toy. By doing this, Disney can monetize the same story across multiple distribution platforms.

For your brand: This requires thinking laterally: Where else can you tell your story? A theme park is not a natural extension of a movie. But it allows Disney to translate a film into a more immersive experience. Victoria’s Secret sold underwear, and invented the Angels fashion show as an experiential distribution point for their lingerie.

• If you sell a product, how could it turn into an experience? i.e. a hair product becomes a pop up salon
• If you have an experience, how can you turn it into products? Or a more immersive experience?

3. Monetize

Finally, translate your distribution points into revenue. Some methods are obvious — charge for your new events and products. Sponsorships are a great way to monetize an audience if you do not want to manufacture a product.

For your brand: If you sell experiences, consider how you can monetize your audience via sponsors or owned product (i.e. Chipotle launching their own line of hot sauce, a book store hosting sponsored book club events). If you sell products, consider monetizing by expanding into adjacent products and new experiences (i.e. SKIMs expanding into athleisure clothing or a subscription magazine).

The key to Entertainment Strategy — don’t be boring.

If you want to follow an entertainment strategy, then entertain. How can your brand/product be interesting? Where do you need to invest to produce high quality content? What do your desired audiences naturally tune into, and how can you offer that?

The Cowboys, like them or not, know how to put on a show. Just as important, they know how to meet their audience where they are with new touchpoints, and they innovate business models around those points. As a result, they are the highest valued sports franchise in the world. And, given that they earn twice the profits of the next ranked teams, but are only valued 37% higher, they might be undervalued.

What do you think of the Cowboys strategy? Can it last? Can other sports (i.e. WNBA) follow it to grow their audience? Will Jerry Jones invite me to a game at AT&T stadium?

Email me michellewiles12@gmail.com | Subscribe for access to all articles.

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