Licensing: Dallas Cowboys to market, distribute own merchandise

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Rather than leave the marketing of its famous blue star logo to the National Football League's new apparel partner, Reebok International, the Dallas Cowboys will try to market and distribute their own merchandise-becoming the only NFL franchise to do so.

Earlier, Cowboys owner Jerry Jones publicly stated he is an advocate for clubs managing their own marks and logos. Team officials declined to comment.

The Cowboys are exercising a provision in the $250 million contract the NFL signed with Reebok last year, making the Canton, Mass. company the league's exclusive apparel supplier. The stipulation allows teams to handle their own merchandising business, although the Cowboys are still free to use Reebok as a supplier.

The NFL's other 31 franchises remain aligned with Reebok as per the league contract, but the Cowboys plan to design their own products, including several new initiatives.

NFL spokesman Brian McCarthy said the league had no comment but would monitor the success of the Cowboys' venture.

little risk

David Carter, president of Los Angeles-based consultant Sports Business Group, said the venture isn't a risk for a franchise that Forbes valued at $743 million, just behind the NFL's Washington Redskins ($796 million) and ahead of baseball's fabled New York Yankees ($730 million).

"It's easier for the Cowboys to make that kind of decision than, say, the Cincinnati Bengals," Mr. Carter said, comparing the Cowboys to what has been a forlorn, small-market franchise. "It's very much a good idea. In sports, and in business, when you don't take the initiative, you run the risk of leaving money on the table. Some teams can't be aggressive and proactive, but the Cowboys can af-ford to do so."

The money generated from the sales of apparel and licensed goods is staggering, which is one of the main reasons why Dallas decided to go it alone. Since making their first Super Bowl appearance in 1971, the Cowboys have appeared in seven more championship games, winning a record-tying five Super Bowls, and have consistently remained one of the NFL's most popular teams.

According to the Sporting Goods Manufacturing Association, sales of NFL merchandise has averaged $3 billion annually from 1995 through 2000. The Cowboys accounted for 16% of those sales during that time.

share alike

But, much to the chagrin of Mr. Jones-and counterparts such as Al Davis, owner of the Oakland Raiders, another NFL team with strong merchandise sales-the league had a longtime share and share alike policy. From 1963 until this year, when the provision in this latest contract with Reebok allowed teams to take over their own merchandising, the Cowboys' royalties were exactly the same as teams whose sales ranked at the bottom.

Though the Cowboys must now make an unknown royalty payment to the league, they keep any sales earned above that figure set by the NFL-a risk the franchise feels is worth taking.

Despite going 5-11 last year, the Cowboys' popularity should be on the rise. Dallas will be the featured team next month in HBO's acclaimed series, "Hard Knocks," which documents an NFL training camp. Also, Mr. Jones has been in talks for some time to put the Cowboys' logo on a racecar in the popular Nascar circuit.

"This speaks to the overall attitude and brand of the team," Mr. Carter said. "They have a persona about them as a team and organization that says, `We're going to go for it.'"

Fast Facts

Team: Dallas Cowboys

Affiliation: National Football League

Worth: $743 million, according to Forbes

Objective: To break away from NFL partner Reebok International in order to direct its own marketing plans.

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