Dallas Cowboys fans should know this tune. Sing along to the “Ballad of Jerry Jones”!
Come and listen to my story ‘bout a man named Jer’
Played Razorback football with the Hogs up there.
Then one day, after graduating school
He poked holes in the ground right into a gas pool
Methane, that is…Contract guaranteed…Take or pay!
Well the next thing you know, Jer’s a multi-millionaire.
His kinfolk said, “Time to move away from there –
Dallas, Texas is the place you ought to be”
So he bought the Dallas Cowboys in the 1980’s.
For $140 million – worth $6 billion today!!!
Dallas Cowboys owner Jerral Wayne Jones wasn’t born rich. Jerry’s parents moved to Little Rock, Arkansas when the lad was just three years old. His parents ran a local grocery store until Jerry graduated from high school in 1960.
Once Jerry Jones went to college in Fayetteville to play football as a 185-pound offensive lineman for the Arkansas Razorbacks, his parents moved north to Springfield, Missouri where his father (Pat) built a successful life insurance business.
When Jerry returned from college in 1965 with a bachelor’s degree in business administration, he was named Executive Vice President of his father’s insurance company. He would return to Fayetteville to obtain a Master’s degree before heading into business for himself in 1970.
In 1981, Jerry Jones and his oil and gas partner Mike McCoy (a petroleum engineer) formed an oil and natural gas entity called Arkoma Production Company. In 1982, Arkoma obtained (for a reported $15 million) thousands of acres of leases from a natural gas utility named Arkla, Inc. In return for Arkoma’s agreement to drill and develop hundreds of lower risk/moderate reward developmental wells into a “you almost can’t miss” region of prolific natural gas reserves in western Arkansas and eastern Oklahoma (hence the company name “Arkoma”), the same natural gas pipeline utility (Arkla) agreed to purchase the newly discovered production.
In what would turn out to be extremely fortunate for Jones’ future professional football interests, the gas purchase contract between Arkoma and Arkla called for Arkoma’s daily natural gas production to be purchased by the pipeline company at a percentage of the wells’ daily flow volumes (called “take-or-pay”). Within a few years, the pipeline’s market for Arkoma’s pricey natural gas had declined, and the agreement’s “take-or-pay” clause kicked-in.
By 1986, Arkla decided to end the deal and wrote a check for $175 million to completely buy-out Arkoma Production Company. As a 50% owner, Jerry Jones had quickly become quite wealthy. He and his partner, Mike McCoy, would start anew in the energy business once again.
Just two years later in 1988, Jerry Jones would learn that the NFL’s Dallas Cowboys were for sale. Though he would later state that he was initially only interested in a portion of the football team, Jerry Jones would purchase the Dallas Cowboys football team ($65 million) and their home stadium (Texas Stadium) for another $75 million. The $140 million price tag involved Jones leveraging everything he owned in order to buy the team.
Risk (whether it was father’s life insurance business, his years in the energy business, and now pro football) had become all too familiar to the 47-yea...