The first two nights of the ten-part series delved into Jordan’s running mates with the late 1990s Bulls in Scottie Pippen, Dennis Rodman and coach Phil Jackson. This Sunday explores MJ as a global endorsement phenomenon, with ad slogans like “It’s Gotta Be The Shoes” and “Be Like Mike.”
The Nike Swoosh is ubiquitous today, yet that was hardly the case in the mid-1980s. Adidas was 50% larger by revenue. Reebok had just burst on the scene and would surpass Nike in revenue by 1987. Converse was the brand of choice for NBA stars Magic Johnson, Larry Bird and Julius Erving.
Jordan wore Converse sneakers at the University of North Carolina, and his first choice was to join Adidas after the Bulls drafted him. Jordan’s agent, David Falk, who coined the phrase Air Jordan, had other ideas. He had a close relationship with Nike and encouraged Jordan to hear the company’s pitch. Nike eventually offered a five-year deal with base pay of $500,000 per year, triple any other NBA sneaker deal.
MJ’s first shoe with Nike was banned by the NBA because it didn’t meet the the league’s color standards. Nike paid the fine and seized the moment with an iconic 1984 commercial. “On October 15, Nike created a revolutionary new basketball shoe,” a voice read as Jordan dribbled a basketball. “On October 18, the NBA threw them out of the game. Fortunately, the NBA can't keep you from wearing them."
Nike had a hit on his hands. The first Air Jordan sneaker hit stores the following year and racked up more than $100 million in sales its first 12 months. MJ’s paychecks climbed as the Jordan Brand got bigger. He earned an estimated $130 million from Nike last year, four times as much as LeBron James, who has the biggest shoe deal among active NBA players.
Nike aggressively signed NBA players throughout the 1990s and 2000s, and stars like Kobe Bryant and James helped build its business in the U.S. and China. Nike has recruited a new crop of burgeoning NBA talents, including Zion Williamson and Luka Doncic, to promote the Jordan Brand.
Nike now has a virtual monopoly in the once-competitive basketball sneaker business. Nike’s share of the performance basketball market, including the Jordan Brand, was 86% last year, according to market research firm NPD. The Swoosh was even more dominant in the lifestyle basketball category, with a 96% share. Seventy-seven percent of NBA players wore Nike or Jordan shoes during the 2019-20 season, according to shoe database site Baller Shoes DB. The top nine models were all made by Nike.
While Nike helped make Jordan a billionaire—his current net worth is $2.1 billion—he paved the way for Nike to leave Adidas and other competitors in the dust. Nike’s $40 billion in revenue over the last 12 months was 60% more than Adidas’ and 43 times what it was before it added Jordan. Reebok, which Adidas bought in 2005, posted lower revenue last year than it did in 1990. Nike’s market cap of $136 billion is three times the size of Adidas.
The Jordan Brand had revenue of $3.1 billion in the fiscal year ending May 2019—only 8% of company revenue—but likely represents a larger chunk of the market value because its 10% growth rate is faster than the company’s overall. 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.
MJ’s brand shows no signs of slowing down. “What’s most exciting is we’re still in the early stages of diversifying the Jordan portfolio,” former CEO Mark Parker said when announcing Nike’s fiscal second-quarter results in December, which included the first billion-dollar quarter for the Jordan Brand. “And we’ve continued the momentum into Q3 with a significant holiday launch of the Jordan 11 ‘Bred,’ meeting demand for one of sneaker culture’s all-time favorites at an incredible scale.”