A Decade After Retirement and the Jordan Brand is Still Pulling in $2.5 Billion Per Year for Nike

BannedShoe

“On October 15th (1984), Nike created a revolutionary new basketball shoe. On October 18th, the NBA threw them out of the game. Fortunately, the NBA can’t keep you from wearing them.”

History of Michael Jordan’s Nike Deal

He retired in 2003, the third and final retirement of his career, after playing in the NBA for 15 seasons and is currently named the highest-paid retired athlete. In 2014, 11 years after leaving the NBA, Michael Jordan was still the NBA’s biggest star and was included in this years Forbes magazine’s 29th annual World Billionaire’s List. One might begin to wonder: how does Michael Jordan continue to be able to earn so much after all these years? The answer is actually quite simple.

Back in 1984, Michael Jordan signed an endorsement contract with Nike. Jordan wore Converse throughout his three years of playing collegiate basketball at North Carolina, but only because his coach was being paid $10,000 a year for putting the brand on his players. Although he had to wear Converse during his collegiate career, all Jordan wanted to wear in the NBA was Adidas. Jordan made it clear that he would have rather signed with Adidas, Adidas was not prepared at that time and Nike needed Michael in 1984 after recording its first quarterly loss in February of that year. After the first game of Jordan wearing the new Nike-made Air Jordans, the NBA banned them for lack of color scheme. Nike decided to pay the fees for Jordan wearing them though, and even gained a lot of publicity throughout the process with a commercial that said:

“On October 15th, Nike created a revolutionary new basketball shoe. On October 18th, the NBA threw them out of the game. Fortunately, the NBA can’t keep you from wearing them.”

Once the shoes came out in stores of March 1985, there was no looking back. In a two-month period Nike sold $70 million worth of Air Jordans, and by the end of the year they had $100 million in revenues. As of 2013, Air Jordans make up 58% of all basketball shoes bought in the U.S. and 77% of all kids’ basketball shoes according to ESPN. Incredibly, “most of those kids didn’t ever see Michael Jordan even play.”

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Endorsement Deal Gone Right

Forbes stated in March 2015 that the Jordan brand commanded 58% market share of the $4.2 billion U.S. basketball shoe market last year, which is up from 54% in 2013. Eric Tracy, an analyst of Nike, stated “Nike has done an unbelievable job evolving the Jordan brand from pure basketball to more of a lifestyle brand.” Tracy also said that by Nike doing this, it pulls in a much larger target market.

Not only has Jordan’s endorsement deal done great with creating his own brand, but Michael Jordan’s Air Jordan brand is now also sponsoring other NBA players. 21 active NBA players to be exact, which include Chris Paul, Blake Griffin, Ray Allen, Kawhi Leonard, Russell Westbrook, and Carmelo Anthony.

It is obvious that Michael Jordan made a name for himself, not only for playing the game of basketball incredibly on the court, but also in the shoe industry.

NOTE: This blog post was written by Samford University student Mary Margaret Clark

Sources

Badenhausen, Kurt. “How Michael Jordan Still Makes $100 Million A Year.” Forbes. 11 Mar. 2015. Web. 5 June 2015.

Rovell, Darren. “Jordan’s Estimated Worth: $1 Billion.” ESPN. 8 Mar. 2015. Web. 5 June 2015.

Rovell, Darren. “How Nike Landed Michael Jordan.” ESPN. 15 Feb. 2013. Web. 5 June 2015.

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