How Michael Jordan Turned $94 Million Into $2.5 Billion
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Michael Jordan is widely considered the greatest basketball player of all time.
He was a McDonald’s All-American in High School. He became just the fourth player to start at the University of North Carolina as a freshman. He won a National Championship as a sophomore. He was named National Player of the Year as a Junior, and the Chicago Bulls selected him as the third pick in the 1984 NBA Draft.
Top 5 (1984 NBA Draft)
Hakeem Olajuwon (Houston)
Sam Bowie (Portland)
Michael Jordan (Chicago)
Sam Perkins (Dallas)
Charles Barkley (Philadelphia)
It was a dominant amateur career that would have been memorable even if he never played another minute of basketball. Yet, Michael Jordan went on to have an even more impressive NBA career — the accomplishments are almost too plentiful to list.
Michael Jordan played 15 seasons in the NBA—13 with the Chicago Bulls & 2 with the Washington Wizards—and took off nearly two years during the heart of his career to play baseball in the Chicago White Sox minor league system.
Still, he was a 14-time NBA All-Star. He won the NBA scoring title every year that he wasn’t playing baseball. He was named the NBA’s Most Valuable Player on 5 separate occasions, and most importantly, he was 6-for-6 in the NBA finals, finishing his illustrious career with 6 NBA Championships and 6 NBA Finals MVP trophies.
I mean, just think about this. Michael Jordan’s number 23 jersey was the first number that the Miami Heat ever retired, even though he never played for the franchise — Pat Riley simply respected him too much to allow another player to wear it.
But here’s the most interesting part about Michael Jordan’s career.
There are currently over 150 NBA players who have earned more than the $93.7 million Michael Jordan made during this NBA career.
The truth is that Jordan spent the majority of his NBA career underpaid. Sure, the Chicago Bulls took advantage of a salary cap loophole that allowed them to re-sign Jordan for more than $30 million in 1996 and 1997, but still, he earned between $550,000 to $4 million for 13 years out of his 15-year career.
That’s good money, of course, but it looks out of place considering he’s the greatest player of all time, and his teammate, Scottie Pippen, made $17 million more than him, despite playing two fewer years.
Still, Michael Jordan ended up becoming the wealthiest athlete in sports history. But here’s the part you probably didn’t know — he is worth nearly $2.5 billion today, yet less than 4% of his total net worth came from his NBA salary.
Instead, most of that money was accumulated through two business deals: a unique partnership with Nike and a well-timed purchase of the Charlotte Hornets.
Let’s start with Nike.
Michael Jordan wore Converse shoes at the University of North Carolina. That’s because his coach, Dean Smith, was getting paid about $10,000 a year to put the brand on his players.
But Jordan wanted to wear Adidas when he got to the NBA—he loved what the three stripes represented. But unfortunately, they were going through a leadership change and never made him an offer. So the choice came down to Converse and Nike.
Converse had all the big names at the time, including Magic Johnson, Larry Bird, Dr. J, and others. So they flew Michael Jordan down to their company headquarters and offered him a similar financial package of about $100,000 a year.
But Jordan wasn’t interested. He claims that Converse wasn’t innovative and got frustrated when they said: “We’ll treat you like all our other superstars.”
So that deal was dead, but there was just one problem. Nike was interested and wanted a meeting, but Jordan still wanted Adidas. So he told his agent David Falk, “I have no interest in going [to meet Nike]. Just do what you need to do to get me with Adidas.”
Now, what happened next isn’t exactly clear. But rumor has it that Falk put his foot down, told Jordan that it wasn’t happening, and MJ’s mom eventually convinced him to get on the plane to Nike headquarters and at least hear what they had to say.
And as it turns out, his Mom was right. Michael Jordan liked what Nike was saying.
They were in a tough spot financially. The brand’s rapid growth was starting to stall, and they had just reported their first-ever quarterly loss. So they saw Michael Jordan as a lifeline and offered him a ridiculous deal of $500,000 a year in cash for five years.
It also included the opportunity to build his own brand, starting with signature shoes and eventually expanding into clothing and more.
So the deal was worth about $2.5 million in total, which was roughly equivalent to his NBA earnings and represented a financial commitment that was 4-5x larger than other players were getting. Remember, MJ still hadn’t played an NBA game yet.
But he accepted the deal, and the rest is history.
Nike estimated that his first shoe, the Air Jordan 1, would bring in $3 million in sales over the first three years. But instead, it did over $125 million….in year one.
The partnership between Michael Jordan and Nike has become one of the most successful athlete-brand deals in sports history. The two have been working together for nearly 40 years, and the Jordan Brand now includes much more than just performance basketball shoes.
But here’s the craziest part — Michael Jordan gets a ~5% royalty on all Jordan Brand sales, and with the brand bringing in $4.7 billion in revenue last year, MJ took home more than $150 million in income from Nike in 2021 alone.
That’s nearly 2x what he made throughout his entire NBA career, and more than 5x the amount NBA superstars like LeBron James and Kevin Durant earn from their endorsement deal with Nike.
Nike has paid Michael Jordan roughly $1.5 billion over nearly four decades, and his annual income has ballooned over the last decade — going from an average of about $40 million in annual income between 2000 to 2010 to more than $150 million in yearly income today.
That’s obviously absurd — yet MJ’s second-best investment is just as impressive.
He already owned a small minority stake in the franchise, but in 2010, Michael Jordan paid Bob Johnson $180 million to assume 97% ownership in the Charlotte Hornets.
The franchise has consistently been one of the worst teams in the NBA since, but with media rights exploding and international interest at an all-time high, it hasn’t mattered financially.
Michael Jordan still has majority control of the franchise today, but he sold a 20% minority stake in the team to a group of investors last year. That deal valued the team at $1.5 billion, or almost 6x what he paid ten years earlier.
And today, the Charlotte Hornets are valued at $1.6 billion. That means Michael Jordan’s initial $180 million investment is up nearly 10x.
Now, these aren’t Michael Jordan’s only investments. He has equity exposure to companies within tech, eSports, alcohol, auto, and more. In addition, he owns a small minority stake in the Miami Marlins, and he was even recently named a special advisor to the DraftKings board of directors.
Still, the Jordan Brand and the Charlotte Hornets are the primary drivers that enabled Michael Jordan to turn $94 million in NBA salary into a $2.4 billion net worth. That makes him the wealthiest in sports history and proves he’s the GOAT, on-and-off the court.
I hope everyone has a great weekend. I’ll talk to you on Monday.
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