39 years ago, an NBA rookie by the name of Michael Jordan inadvertently changed the sneaker game by signing an insanely lucrative Nike contract after Converse failed to meet his demands.
The cultural ubiquity of Nike’s Air Jordans almost goes without saying.
To this day, from the feet of hip hop artists in music videos to the feet of kids running around in the streets, you can find a pair in pretty much every corner of the world. Because everyone – and we mean everyone – still wants to be like Mike.
But in numbers, the partnership is far more impressive.
How Nike created an athlete billionaire
During the 2022 financial year, the Nike Air Jordan brand generated $5.1 billion worth of revenue with MJ himself reportedly pocketing 5% or approximately $256.1 million – that’s double his entire NBA career earnings in just a single year.
For context, in the fiscal year prior, it was estimated Jordan (the man) pocketed around $240 million from Jordan (the brand) based on revenue amounting to $4.8 billion.
According to Centuro Global, Michael Jordan has earned an estimated total of $1.3 billion from Nike.
As Forbes correctly noted, while the Michael Jordan Nike contract irrefutably established the richest athlete endorsement deal in history – and is widely considered as such – it should also be considered the biggest endorsement bargain in sports…
How MJ created a sportswear giant
Nike is synonymous with some of the world’s greatest athletes and record-breaking commercial success in the present era. But that wasn’t always the case.
As some of you may recall thanks to Ben Affleck’s Air – in which he also co-starred as Nike co-founder & CEO Phil Knight alongside Matt Damon (Sonny Vaccaro), Jason Bateman (Rob Strasser), Chris Tucker (Howard White), Viola Davis (Deloris Jordan), and more – back in the 80s, it was nothing more than a fledgling company.
A fledgling company, it’s worth adding, that simply couldn’t compete with the more established likes of Converse, the NBA’s staple footwear at the time, or Adidas, who were stronger in every regard from revenue to branding.
After some negotiations, and a whole lot of corporate seduction, Nike welcomed the legendary Chicago Bulls shooting guard to the family with an upfront commitment of $250,000 and his very own signature shoe line with a piece of the action.
RELATED: A Breakdown Of Michael Jordan’s GOAT-Worthy Net Worth
The sneakers that sold themselves (going above & beyond in the rookie year)
The revolutionary new basketball shoe was a sports marketing dream. Association with His Airness aside, the NBA was ready to fine the young gun $5,000 per game due to the amount of colour Air Jordans showcased – which Nike happily paid for the free publicity.
Nike fully leaned into the “banned narrative” and manufactured controversy for their own advertising campaign, highlighting the power and allure of individuality.
The Air Jordan 1 ad also cheekily alluded to the real reason being some kind of performance advantage Nike’s patented Air technology provided MJ:
“On Oct. 15, Nike created a revolutionary new basketball shoe. On Oct. 18, the NBA threw them out of the game. Fortunately, the NBA can’t keep you from wearing them. Air Jordans. From Nike.”
Nike initially projected a reasonable $3 million worth of Air Jordan sneaker sales at the end of the four-year term. In the first year alone, Nike would sell $126 million worth of units almost solely because of Jordan’s name, reputation, and sheer star power.
This was, however, just the tip of the highly-profitable iceberg.
And the rest is history
Once again referring to analysis courtesy of Forbes, Michael Jordan “paved the way” for Nike to leave its competitors for dead:
- Nike now has a “virtual monopoly” in the once-competitive basketball sneaker business
- Nike and the Air Jordan brand’s share of the performance basketball market was 86% as of 2019 (according to market research firm NPD)
- Dominance was even more prevalent in the lifestyle basketball category with a total 96% share
- 77% of NBA players wore Nike / Jordan shoes during the 2019-20 season, with the top nine models produced by Nike (according to database site Baller Shoes DB)
- Nike’s $40 billion in revenue during that same period was 60% more than Adidas – and 43 times what it was pre-Jordan
- Nike’s market cap: $166.44 billion (almost six times that of Adidas)
The cherry on top? In 2003, Nike acquired Converse for just $309 million and Reebok for $3.8 billion two years later. That’s the MJ effect, baby.
As of 2023, Michael Jordan’s net worth is an estimated $2 billion.
NOTE: All $$$ = USD
Now watch four straight minutes of Michael Jordan taking it personal here.
