Reported by Liku Zelleke
Basketball legend Michael Jordan was rich during his years on the court – but not nearly as rich as he would have been had he been playing today. Today’s players – thanks to an always increasing salary cap can actually earn more in one contract signing than he ever did during his 15 years of professional balling.
But Jordan isn’t one to be pitied. He is in fact a financial whiz that should be emulated. Right now, in his retirement, he has a portfolio that earns him lots of money by way of merchandises that includes (but is not limited to): underwear, Gatorade, sports cards, and fragrances.
But the highest earner are his shoes sales.
To see how high an earner his shoes have become one needs to consider the fact that last year, Jordan made more money from shoe sales than he did during the entire 15-years he played in the NBA.
In 1984, Jordan – a No. 3 pick made a [relatively] meager $630,000 during his rookie season.
Even during his second deal with the Chicago Bulls, Jordan was only being paid $2 million per year and only started really getting paid in 1997 when he signed on for $33 million.
In total, he made a little over $90 million during his entire career.
Once his basketball days were over, he moved onto branding and sales and, most importantly, shoes. But that fortune nearly didn’t happen.
In February 1984, Nike found itself in financial troubles and needed something to make them money and fast. Jordan who was looking for a deal, wanted to go with Adidas and had even told his agent to make it happen anyway possible.
The agent, on the other hand, wanted Jordan to listen to what Nike had to offer. Jordan’s agent even called Jordan’s parents to persuade him to give the sports gear manufacturer some attention too.
The persistence paid off and Jordan actually liked what Nike had to offer and the fact that they would allow him to make some creative inputs on future products.
The first deal with Nike was for $500,000 over five years; with stock options and other benefits that had a possibility of going all the way to $7 million.
Nike was doubtful about the deal and included a clause in their contract that would allow them to back out if Jordan didn’t rise high enough – like winning Rookie of the Year, becoming an All-Star or averaging 20 points per game during his first three years.
When the shoes went on sale in March 1985 they cost $65 a pair. By May, they had sold $70 million worth of products. By the end of the year Jordan’s shoes had generated over $100 million worth of revenue.
The rest, as they say, is history.