Michael Jordan’s 2023 pay cheque has reached an absurd level — all because of “the greatest sports business deal in history”.
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Michael Jordan’s 2023 pay cheque from Nike has reached an absolutely absurd level.
The NBA icon was in October recognised as the first ever athlete to crack Forbes’ annual list of the 400 richest people in America with his net worth soaring to $4.7 billion.
His contract with Nike — and the deal cut with the sport apparel goliath surrounding his personal “Jordan” brand — is well known to have been the real source of his wealth.
Details of the agreement surrounding the Jordan brand — which uses the iconic “Jumpman” logo — have emerged this week with sports business guru Joe Pompliano pointing out Jordan’s pay cheque from the deal will nearly hit $500m (US$330,000 million) this year.
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The scary thing is that the five per cent royalty Jordan receives will continue to explode in coming years with Nike setting ambitious targets about the brand’s growth.
The 60-year-old’s 2023 royalties jumped more than $100m (US$70m) this year from the amount he received in 2022.
Pompliano describes the deal Jordan negotiated back in 1984 as the “greatest sports business deal in history”.
It was a deal that famously never happened as Jordan entered his rookie NBA season in 1984 while considering offers from Converse, Adidas and Nike.
Despite Nike being his third preference, Jordan linked with the brand because of a $250,000 payment that blew other offers out of the water.
The rest is history.
Nike at the time was preparing to release its new “air soles technology” and it proved one of the greatest pitches in marketing history for the first line of shoes to be branded “Air Jordans”.
NBA Commisioner Adam Silver and Michael Jordan. Photo by Joe Murphy/NBAE via Getty Images.
Jordan’s agent David Falk said in 2020 Nike’s target with the “Air Jordan” brand was to hit $3 million in sales in its first four years.
“In year one, we sold $US126 million,” Falk said in 2020.
The brand, which is represented by the iconic, leaping, sprawling silhouette of the Chicago Bulls legend jumping for the hoop, is still just one of many fountains of wealth the basketballer has tapped.
Over the course of 15 NBA seasons, he hauled in a reported $149 million (US$94 million) and was the league’s highest paid player in ‘97 and ‘98.
But it was Jordan’s work off the court that made him a billionaire. In many ways, the retired pro became the blueprint for the kinds of lucrative brand deals that are the bread and butter of athletes today.
Luka Doncic of the Dallas Mavericks wears the Jordan brand. Photo by Amanda Loman, Getty Images via AFP.
Off-court, Jordan earned an estimated $3.8 billion (US$2.4 billion) pre-tax over his career, through brand deals with the likes of McDonald’s, Gatorade and Nike, according to Forbes.
Jordan’s latest and most lucrative windfall, though, came when he sold his majority stake in an NBA team, the Charlotte Hornets, at an eye-watering $4.7 billion (US$3 billion) valuation.
It was the second highest sale price in league history and more than 17 times the team’s value when Jordan became its principal owner in 2010.
The sale, which was announced in August, brought Jordan’s net worth past $4.7 billion and made him the first ever professional athlete to make the Forbes 400, which catalogues the 400 richest people in the US.
“Michael’s one of the few people that has had success three times,” Ted Leonsis, who has worked with Jordan on multiple investments, told Forbes.
The same expression on the face of Converse executives every time they see a Nike sales report. AP Photo/Rick Havner.
Yvette Prieto and Michael Jordan. Photo by Charley Gallay/Getty Images for Jordan Brand.
“A lot of entrepreneurs, they make it once. They have a big win, take their winnings, retire and [we] never hear from them again, or they try something a second time and it doesn’t work. He’s had three mega successes (as a player, as an owner, and as the face behind Nike’s Air Jordan).”
“He was a brand before people discussed human beings being brands,” added Marc Ganis, president of the consulting firm Sportscorp.
“It wasn’t Michael Jordan promoting Gatorade, it was Gatorade saying: ‘Drink Gatorade to be more like Michael.’”
According to Forbes, only three professional athletes have reached billionaire status — first Jordan, in 2014, followed by LeBron James and Tiger Woods.
Jordan retained a small stake in the Hornets, keeping him connected to the court, but many eyes are watching for what he’ll do next.