In 1989, Jerry Jones paid $140 million for the Dallas Cowboys. Within six years, he had signed deals worth an estimated $40 million with Nike and Pepsi through Texas Stadium Corporation, bypassed the NFL’s marketing office entirely, and stood on the sideline at a Monday Night Football game with Nike chairman Phil Knight. The league’s response triggered one of the most consequential legal battles in American sports business history.
Dec 14, 2025; Arlington, Texas, USA; Dallas Cowboys owner Jerry Jones before a game against the Minnesota Vikings at AT&T Stadium. Mandatory Credit: Kevin Jairaj-Imagn Images
The NFL controlled all team marketing through NFL Properties, which pooled and equally distributed licensing revenue among all teams. Every team transferred those rights to the trust, which split licensing revenue equally. When Jones signed Pepsi and Nike, the league already had official deals with Coca-Cola and Reebok. His Texas Stadium contracts, structured separately from the club itself, did not technically involve Cowboys trademarks, but the league saw them as direct violations. Art Modell, then owner of the Cleveland Browns, put it plainly at the time.
The account of the lawsuit resurfaced on social media this week. “He’s trying to tear down this league, god d–n it!” Modell said. Wellington Mara of the New York Giants added his own criticism. “I don’t think he has the concept of what it means to be a member of a team,” Mara told The New York Times. Jones responded to the building opposition in 1995 with a single line. “I am well advised and sensitive to playing by the rules,” he said. “There is no way that I’m in violation of any NFL rules.”
During an NFL owners meeting in Atlanta in October 1995, Jones was served with a $300 million lawsuit by NFL Properties. The suit claimed violations of the Lanham Act, breach of contract, and damage to existing sponsorship agreements. As Ruling Sports’ legal breakdown confirmed, the NFL wanted the court to block the Cowboys from signing any additional deals with companies competing with official league sponsors. When ABC Sports asked Jones about the lawsuit as he traveled to Atlanta, he gave one answer. “We will prevail,” he said.
Jones fired back immediately. In November 1995, he filed a massive $750 million antitrust countersuit against the NFL and NFL Properties. The Washington Post reported the filing on November 7, 1995, describing it as the most direct legal challenge to the NFL’s revenue-sharing model in the league’s history. The antitrust argument was built around one central claim: the NFL’s trust structure violated federal competition law by preventing franchises from developing their own commercial identity.
How Jerry Jones Changed NFL Business Forever
In 1996, both sides dropped their lawsuits as part of a settlement – with no money exchanged between them. But the settlement terms defined who won. Jones retained his Nike, Pepsi, and American Express contracts through Texas Stadium Corporation.
More significantly, the settlement gave every other NFL team the right to sign their own stadium sponsorship deals with companies outside the league-wide sponsor list. Jones had also shown during discovery that other teams were already running similar local arrangements. That evidence made the NFL’s position impossible to defend at trial, which is why the league settled rather than proceeding.
The Cowboys’ apparel had accounted for roughly 24 percent of all NFL Properties licensing revenue before Jones started his fight. By the time Forbes valued the Cowboys in 2013, the franchise was worth $2.3 billion – the highest in the league. As ESPN’s historical account of the dispute noted: “Jones changed the NFL’s business structure.” Every team that has since signed a naming rights deal, a stadium partnership, or a local brand arrangement has done so within a framework Jones forced the league to accept in 1996.
Instead of punishing Jones, the NFL’s $300 million lawsuit ultimately backfired spectacularly. Jones kept his sponsors, kept his stadium rights, and handed every other franchise a legal foundation to do the same. The antitrust argument was too dangerous to litigate and Jones knew it from the start.
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