Michael Jordan siding with Nike in 1984 became an era-defining move in the history of basketball. Despite the organization ‘only’ making $920 million a year in revenue as per Sportico, the then-Chicago Bulls star kept his faith in them. 40 years later, the decision is paying some serious dividends as the deal has propelled the company into making over $50 billion in yearly revenue today.
Apr 24, 1998; Chicago, IL, USA; Chicago Bulls guard Michael Jordan (23) celebrates in the final minutes of a playoff game against the New Jersey Nets at the United Center. Mandatory Credit: Anne Ryan-USA TODAY
Amidst the potential downside of the partnership back in the day, Jordan signed a royalty-based deal with Nike. This cooperation eventually paved the way for the formation of Air Jordan, resulting in exponential growth for the company. Last year’s balance sheets reflected precisely that as they generated $51 billion in revenue with the Jordan brand amounting to $6.6 billion of it.
A research analyst Sam Poser dissected this remarkable turnaround during an interview with Sportico while shedding light on the marketing strategy. “Nike has had success with what they call their pull model, where basically they feed the product to you with an eyedropper, for all practical purposes. That way, there is a sense of urgency that if I don’t act now I won’t get it,” he mentioned.
Interestingly, the decade-old method has stayed relevant to this day, surviving through the test of time. Utilizing this approach, the brand’s yearly revenue has tripled in the past decade, going from $2.3 billion in 2015 to potentially $7 billion in 2024. Hence, the trajectory remains upward with the projections indicating further market capitalization.
This rapid growth has spurred MJ to become the highest-paid athlete of all time. As per Sportico, the inflation-adjusted career earnings of Jordan stand at $3.75 billion with the non-adjusted earnings amounting to $2.7 billion. A major contributor to this has been the rising revenue of the Air Jordan brand, adding volume to the sustained relevance of the Black Jesus.
The role of luck and trust behind the billions of Michael Jordan
Coming into the NBA, Jordan wanted to sign with Adidas after displaying an inclination toward the brand since his younger days. Despite the keen interest of the then-21-year-old, the German company had its fair share of concerns. According to a 2015 Wall Street article, Adidas passed on the opportunity to sign MJ due to “height concerns”.
This opened the door for Nike to capitalize on the presented chance as the then marketing head Sonny Vaccaro led the operation. Yet, the negotiations remained challenging as Jordan stayed fixated on his demand for an automobile. Eventually, after the intervention from MJ’s mother, Deloris, the talks smoothened, leading to the initiation of the partnership.
This kickstarted a unique journey for the parties involved as it redefined the basketball culture. Over time, the Jordan brand became a symbol for the aspirants as the iconic figure’s on-court success fulfilled all the promises. This led to an irreversible relationship between the brand and its consumers as none had to look back ever since.
