How Michael Jordan Made Hundreds of Millions from a Single Round of Golf
Michael Jordan‘s relationship with Nike is one of the main reasons the NBA Hall of Famer remains one of the wealthiest former athletes on the planet. Today, Jordan still earns over $100 million annually from the shoe company. What most don’t realize is it hasn’t always been a blissful relationship and it almost came to an unexpected end in 1988. Fortunately for Jordan, it was salvaged by a single round of golf.
Michael Jordan’s initial shoe deal
According to The Last Dance, in 1985, Michael Jordan’s rookie season, he wanted to sign a shoe deal with the company that made his favorite shoe, Adidas. Unfortunately, the shoe company wasn’t able to develop a shoe tailored to Jordan’s needs.
Jordan and his agent David Falk next visited with Converse, which worked with Magic Johnson, Larry Bird, and Dr. J. Despite Jordan liking the shoes, Converse didn’t have any innovative ideas looking to the future. On to the next company. Falk wanted to meet with Nike. Jordan protested. After some convincing from his parents, Jordan, his agent, and parents met with the shoe company, which up until that point was known for its track shoes.
Following protracted negotiations, Nike signed Jordan to a record deal that would pay him $500,000 a year for five years. It was the largest deal between any player and a shoe company. The next highest belonged to James Worthy, who signed an eight-year deal with New Balance worth $150,000 a year.
Air Jordans are a huge success, but trouble brewing behind the scenes
After the NBA banned the shoes at the start of the 1984 season because the shoes violated the league’s uniform color scheme, Nike paid the fines and proceeded to make a commercial focusing on the ban. In March 1985, Air Jordans appeared in stores nationwide selling for a whopping $65 a pair.
The shoes flew off the shelves and by May, the shoes had generated $70 million in sales. By the end of 1985, it was up to $100 million in revenue. Everything between Jordan and Nike appeared to be going spectacularly. Behind the scenes, it wasn’t.
Just three games into Jordan’s second season, he broke his foot while wearing the shoes that were selling like hotcakes. The reigning Rookie of the Year was not happy with the injury, and even more troubled when told he would likely miss the remainder of the season. Despite the original contract, which he had signed less than two years earlier, Jordan was thinking about the future and the possibility of working with other shoe companies when his contract expired.
One round of golf made Michael Jordan hundreds of millions of dollar
In 1987, Jordan was unhappy with Nike and was seriously considering bolting for another brand. And they knew it. In one last-ditch effort to salvage the relationship, Nike officials planned a meeting at a California hotel to unveil the latest design of the Air Jordan III to Jordan and his representatives. Nike’s Phil Knight, the head of Nike marketing, and shoe designer Tinker Hatfield sat at the table along with Michael’s agents, and his parents, James and Deloris. Michael hadn’t arrived.
The group waited for Jordan to show up. And they waited. Two hours turned into three. Jordan’s mom and dad were embarrassed and visibly upset. Finally, after four hours, the time it takes to play a round of golf, which he was doing with other business partners, Jordan showed up, and he was in a foul mood. Maybe his round of golf had gone poorly. Maybe it was the thought of his relationship with Nike. His attitude, however, took a sudden turn when he saw the Air Jordan III. He liked them but left the meeting without giving Nike any commitment.
That all changed minutes later when Jordan’s father, James, had a stern conversation with his son in the parking lot outside of the hotel. After the elder Jordan told his son how embarrassed he and his mother were for his tardiness, Michael apologized and asked his father for direction.
James explained Nike had shown an unwavering commitment to him in a couple of ways. The first, and most apparent, Phil Knight and his team had patiently waited for four hours. No one would have blamed Knight if he had walked out after an hour, much less three. And more substantively, Nike had produced an innovative shoe design tailored specifically to his desires. His father, who had wielded influence on Jordan’s previous shoe deal, said Nike felt like the right move. The son listened.
And as they say, the rest is history.