From the beginning, USFL founder David Dixon placed a premium on putting a team in the New York area. Initially, Donald Trump was tapped to own the team. However, he backed out after paying an initial installment on the franchise fee, hoping instead to buy the struggling Baltimore Colts of the NFL. Needing a credible owner with the means to front a team in the nation's biggest market, Dixon persuaded Oklahoma oil magnate J. Walter Duncan to step in. Duncan had originally been slated to own the USFL's Chicago franchise, as he'd grown up in Chicago. However, he readily agreed to shift to New York.^[1]

Duncan took on former New England Patriots coach Chuck Fairbanks as a minority partner; Duncan knew Fairbanks from his days as head coach at the University of Oklahoma. Fairbanks also served as general manager and head coach. They initially had an uphill battle to get a lease at Giants Stadium, but were able to obtain one on condition that they brand their team as "New Jersey" rather than "New York." They named the team the "Generals" after the large number of generals based in New Jersey during the Revolutionary War.^[1]

The team made a big splash by signing Heisman Trophy-winning underclassman Herschel Walker, a running back from the University of Georgia. While the USFL had followed the NFL's lead in banning underclassmen from playing, league officials were certain that this rule would never withstand a court challenge. In an even more ominous development, Walker did not sign a standard player contract. Rather, he agreed to a three-year personal-services contract with Duncan. The contract was valued at $4.2 million—more than double the USFL's salary cap of $1.8 million. Nonetheless, the other owners knew having the incumbent Heisman winner in their fold would lend the USFL instant credibility, and allowed the contract to stand.

Despite the signing of Walker, who rushed for 1,812 yards and 17 touchdowns, the Generals finished their inaugural season with a 6–12 record. This was largely due to a porous defense which gave up the third-most points in the league (437) and a feeble passing attack led by ex-New Orleans Saints career backup Bobby Scott.

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