The best decision Michael Jordan may have ever made was commencing a relationship with Nike back in 1984. It’s turned him into a billionaire, and the cash register continues to ring every single day and likely will for the rest of MJ’s life.
When Michael was a rookie with the Chicago Bulls 38 years ago, Nike saw his incredible potential and locked him down with his first shoe deal. It was set to pay him around $2.5 million, which is a nice chunk of change for a kid that was months removed from scraping money together to do laundry at the University of North Carolina.
When the first Air Jordan shoe came out, the NBA did not allow Michael to wear it because it didn’t comply with certain rules.That sounds like a problem, right? Wrong! Nike stepped in and paid the $5,000 fine Jordan was hit with for every game he wore them. Not only did it provide incredible loyalty for Michael, but it was a great promotional tool too. Consumers could believe there was something so magical about the shoe that they would have to have a pair themselves.
The shoe became iconic, by far the most profitable line for Nike, and they haven’t lost one bit of popularity in four decades. Forbes estimated that Jordan earned roughly $145 million in endorsements in the one year from May 2018 to May 2019. $130 million of that came from his Air Jordan deal. It’s an incredible revenue stream.
But wait, there’s more. Michael reportedly has a licensing deal with Nike that pays him for every Air Jordan shoe sold. That deal is 5% per shoe, and I’ll spare you the trouble of doing the math, but it comes to $10-$12 per sale, which amounts to roughly $150 million per year.
Michael Jordan makes at least four times the amount that LeBron James makes for his shoe deal, which is even more incredible considering Michael retired the year James entered the league.
Great article.