At the peak of his career, Michael Jordan was the favorite of renowned brands. His signature was the most sought after owning to his popularity and influence not only in the NBA, but across multiple fields of endeavors.
In 1984, he signed a deal with Nike that would later give birth to Air Jordan. Before inking a deal with Nike, the brand played second fiddle to then leading brands like Adidas, Reebok, and Converse.
At the time, Adidas was 50 percent larger by revenue and Reebok was doing better in the market than Nike. Converse, on the other hand, was the brand choice for many NBA stars, including Jordan, and upcoming players like Larry Bird, and Julius Erving, according to Forbes.
In his days at the University of North Carolina, Jordan wore Converse and was set to join Adidas when he was first drafted by the Bulls. However, his agent David Falk wanted him to join Nike owing to his close relationship with the brand.
“Adidas was really dysfunctional by that time. And they had just told me,” he told CNBC Made It. “We’d love to have Jordan. We just can’t make a shoe work at this point in time,” he continued, adding, “I wanted Michael to go with Nike because they were the upstart.”
However, Jordan told them that he was not interested. Falk then appealed to his mother, Deloris, to convince the then-21-year-old to join Nike.
“My mother said, ‘You’re going to go listen, you may not like it, but you’re going to go listen,'” Jordan recalled in an interview with Marie Claire. His father, on the other hand, reportedly told him he would have to be a fool not to take the offer.
Jordan eventually accepted Nike’s deal and from there, started working on his own shoe brand. This led to the birth of Air Jordan. Falk explained to Marie Claire how the name Air Jordan came about.
“Nike had just come out with this new technology for their running shoes called air soles. And obviously, Michael played in the air, so I said, ‘I got it, we’re going to call it Air Jordan,’” he said.
Nike first offered Jordan a five-year deal with a base pay of $500,000 per year, triple any other NBA sneaker deal, according to Forbes. The first Air Jordan sneaker was an instant hit, racking up $126 million in sales in the first 12 months.
“Nike’s expectation when we signed the deal was, at the end of year 4, they hoped to sell $3 million worth of Air Jordans,” Falk recalled. “In year one, we sold $126 million.”
As the Jordan brand got bigger, so did his paycheck. In 2020, Jordan reportedly made $130 million from Nike, which Forbes estimates was four times bigger than what LeBron James earned.
According to Marie Claire, the first edition of Air Jordan was banned by the NBA because it violated the NBA rules that a sneaker must be mostly white and reflect the colors of the team’s jersey.
Also, the NBA star was fined $5,000 for every game he wore the banned Air Jordan 1 sneakers. Nike did not only pay the fines for Jordan, but they also capitalized on the controversy. Eventually, the shoes became a must-have status symbol of the late ’80s and ’90s and even up till today.
Now, Nike is the most dominant in the sneaker business, with at least 80 percent of the market share. Since the 1990s, it has signed stars like the (late) Kobe Bryant, Zion Williamson, and Luka Doncic, among others.
In the fiscal year ending May 2019, Forbes reported that the Jordan brand had revenue of $3.1 billion. Also, Forbes reported that the brand is easily “worth north of $10 billion, in addition to the billions of dollars in profits it has generated over 35 years and its halo impact on sales of other Nike-branded products.”
In 2021, Face2face Africa reported that the over 36-year partnership with Nike has earned Jordan $1.3 billion and counting. At the time of filing this report, Forbes estimates his net worth to be $1.7 billion.
This means that a large chunk of his worth comes from his paycheck from Nike, which has been his biggest financial and marketing backer. Indeed, Nike’s deal with Jordan has not only made him a billionaire but has also made him a cultural icon.
According to Forbes, it is the richest athlete endorsement deal ever but also arguably the biggest bargain because Jordan helped Nike move from a relatively unknown brand to one of the most valuable in the world today.