Nike Played Hardball When Signing Michael Jordan, But The Star’s Agent Cleverly Sealed The Deal

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Looking back, few people in 1984 could have predicted just how successful Nike’s Air Jordan sneakers would become. The man who popularized the shoes was just a rookie, albeit one picked third in the draft. So, when Nike signed him up, it was cautious and proposed all sorts of conditions. But Michael Jordan had other ideas.

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Jordan was an extremely popular player from the beginning – loved by fans for his rampant scoring. His 28+ points a game won him the title of Rookie of the Year in 1985. Furthermore, the shoes that he wore went like hotcakes, and by 2012 Air Jordans reportedly made up more than half of all basketball shoes sold. Youngsters wanted to, in the words of a 1992 Gatorade commercial, “Be Like Mike.”

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Though Jordan had wanted to wear Adidas at first, Nike didn’t waste time. It promised the star that he could have the lower-to-the-ground style of shoe that Adidas offered. It also offered him flash cars and big money. The deal on the table was for $500,000 a year – more than three times the previous record for a sneaker promotion campaign.

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But how did Michael Jordan come to be made such a lucrative offer? Well, simply put, he was extremely good at his chosen sport and was right from the very beginning. Seeing as how he excelled at basketball, his dad James – with whom he has always been close – built him a court in the family’s backyard.

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It seemed clear that the young Jordan would go on to have a career in basketball. In 1981 he started at the University of North Carolina and joined the basketball team there. And he quickly became one of their star players – winning NCAA College Player of the Year on two consecutive occasions.

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In 1984 Jordan left university and joined the NBA. He was recruited by the Chicago Bulls – the third pick in a draft which also included Hakeem Olajuwon and Charles Barkley. Soon enough, Jordan showed the world how good he was. The Chicago Bulls were suddenly rising up the ranks fast, and a lot of that was thanks to the star and his impressive sporting talent.

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Jordan quickly became notable for his strong work ethic and skill. Speaking to Marvin R. Shanken of Cigar Aficionado magazine in 2005, he said, “I was taught to [practice basketball] that way by my parents, and by the way they approached their daily activities. It wasn’t half-assed. So, I practiced like I played. So, when I played, playing was fun.”

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The star went on, “You’re working on the idiosyncrasies of what your game needs, so when the game comes, you showcase it and you utilize it. You build your game on it. Practice wasn’t just a place to take time off. You work on things in practice. On shooting, on going left or on using your left hand – those types of things that help you get better.”

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And Jordan’s meticulous training certainly paid off. In the course of his career, the star raked in an almost unfathomable amount of cash. In fact, he’s considered to be the highest-earning athlete ever. Some of his money he made after retirement in 2003. Seven years later, for example, Jordan bought the Charlotte Hornets team for $175 million, and this made him billions.

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Unsurprisingly, Jordan has made a lot of lavish purchases with his money. Not only does the star have a private jet, he has one tailored to his exact specifications, with his famous jersey number “23” and his number of titles in the plane’s ID code. It’s even painted in the Carolina shade of blue and has a logo on it so that everyone knows it belongs to Jordan.

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Jordan also has a house in Florida worth at least $12.8 million and a private golf course there called Grove XXIII – 23 in Roman numerals, of course. While out playing golf he drives his own customized cart, which, like the plane, is painted Carolina blue and has Jordan’s Jumpman logo on it.

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However, Jordan has donated plenty of money to charity as well. After the September 11 attacks in 2001 he gave his whole salary to charities working to help those affected by the terrible tragedy. That same year he also started holding the Michael Jordan Celebrity Invitational golf game, which raised over $7 million for good causes.

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Jordan’s also done a lot of work to help children. The basketball legend has donated to children’s charities including After School Matters and the Juvenile Diabetes Research Fund. He has also been the Chief Wish Ambassador for Make-A-Wish ever since 2008 – granting requests personally as well as donating millions to the organization.

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The world-famous star also acted quickly when Hurricane Florence hit America and caused widespread devastation. Jordan gave a donation of $1 million to both the Foundation for the Carolinas’ Hurricane Florence Response Fund and the American Red Cross. Plus, he met with hurricane victims personally.

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Jordan’s fortune is incredibly impressive, but he mightn’t have made so much had it not been for one particular decision. And the choice in question is his signing with Nike. This started a chain of events which led to – among other things – the creation of the famous Air Jordans and the Nike brand expanding. But it almost never happened.

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At first, the up-and-coming Jordan had negotiations with the brand Converse. He went with his father James and agent David Falk to speak to the company higher-ups. Jordan was offered $100,000 a year to represent the brand, but he wasn’t impressed with the ideas they were offering, and neither was James.

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Then Jordan reportedly tried to get sponsorship with the Adidas brand. According to The Wall Street Journal, it came close to happening – many people in the company thought it was a good idea. But eventually executives decided against it because, in their view, Jordan was too short. And it was a very costly mistake for the company.

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Jordan’s agent David Falk had plans for his client to sign with Nike instead. The latter had enjoyed a good relationship with that company, but Jordan wasn’t so sure. He still wanted Adidas, and was happy to ignore Nike entirely if it meant another shot with them. So, Falk took the step of calling Jordan’s mother.

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Ringing Jordan’s mom might have seemed like a long shot, but it worked. In the 2020 documentary The Last Dance, Jordan himself remembered the incident. His mother had told him, “You’re going to go listen. You may not like it, but you’re going to go listen.” Unwilling to risk the disapproval of his mom, Jordan went to a meeting with Nike.

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What happened next is the source of some argument among the people involved, and they all told their separate stories to USA Today Sports in 2015. Jordan himself said, “In all honesty, I never wore Nike shoes until I signed with [the company]. I was a big Adidas, Converse guy coming out of college. Then actually my parents made me go out to [Nike’s headquarters] to hear their proposal.”

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Jordan went on, “Prior to all of that, Sonny [Vaccaro, former basketball adviser to Nike] likes to take the credit. But it really wasn’t Sonny, it was actually [Nike executive] George Raveling. [He] was with me on the 1984 Olympics team. He used to always try to talk to me, ‘You gotta go Nike, you gotta go Nike. You’ve got to try.’”

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George Raveling, meanwhile, said, “What had happened was I was the assistant coach on the ‘84 Olympics team and that’s how [Jordan] and I became lifelong friends.” He went on, “And so I had a lot of time to spend with [him] and I was trying to recruit him to come to Nike. In the interest of accuracy, [Vaccaro] had asked me to try to get a meeting set up between him and [Jordan].”

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Raveling continued, “[Jordan] had always been reluctant to pursue Nike. I mentioned to [him], ‘Why don’t we go over and meet with [Vaccaro]?’ And he was reluctant to do it, but I kept bugging him and I said, ‘Hey, [it’s] just common sense. If someone says they’ve got a better deal for you, you should listen.’ If nothing else, if it was just to get me out of badgering him, he said, ‘Okay, I’ll go.’”

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Many of the people interviewed said that Rob Strasser – the late marketing man of the Nike company – played a big role in the deal. Jordan himself said to USA Today Sports, “I absolutely fell in love with [Strasser] when he actually made the first presentation of the Jordan thing, the Air Jordan concept.”

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Of course, the Air Jordans would go on to become legendary, but there was much more to hash out before that could happen. First, Nike agreed to make any shoes for Jordan lower to the ground than usual – like the ones Adidas was making. Then they began looking at the sneaker design, which was a stylish red and black.

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According to ESPN, however, Nike did have some stipulations. It added in a demand that Jordan must reach one of three targets in the first three of the contract’s five years. The first was to win Rookie of the Year, the second was to become an All-Star and the third was to score 20 points a game on average. And if he failed to achieve any, Nike could quit the deal.

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But David Falk had a different idea. The TV station reported that he asked Nike, “What happens if he doesn’t do any of those three, but still sells shoes?” So, the company responded that if, in the third year of the deal, NBA’s rising star could sell $4 million-worth of sneakers, Nike would honor the rest of the contract.

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But Jordan still really wanted to work with Adidas. According to ESPN, he made one last attempt at reaching out to them. He headed back to the company, showed them the Nike contract and the money he stood to make, and asked them if they could come up with anything close to it. They still refused him; thus, the deal with Nike was done.

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Nike began working on the Air Jordans, and, ironically, something which could have been a disaster actually helped the shoes become a success. The red and black shoes were stylish, but they didn’t meet NBA standards. Back then, players had to wear white shoes or be fined.

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Yet Nike and Jordan’s team immediately turned this to their advantage. Falk told the story himself when he was interviewed on the Business of Sports podcast in 2020. He began, “So they make the first shoe, the black and red one. Michael wears it to practice and the league immediately bans the shoes.”

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Falk went on, “They ban it, they say it doesn’t conform with the team’s uniform colors. And [Rob] Strasser calls me up in a panic and he says, ‘Goddammit. We just paid him all this money, he can’t even freakin’ wear the shoe.’” Falk’s reaction to this phone call, however, was “God, that’s great.”

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“We’re gonna do a banned in Boston commercial,” Falk added. “So, what the hell does that mean? [Well], we do a commercial that basically says these shoes are so special that the NBA banned them because it gives Michael a competitive advantage.”

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The commercial pulled no punches, announcing, “On September 15, Nike created a revolutionary new basketball shoe. On October 18, the NBA threw them out of the game. Fortunately, the NBA can’t stop you from wearing them. Air Jordans. From Nike.” And as we’ll see, this approached proved to be a very smart move.

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The first lot of Air Jordans – which today are called Air Jordan Ones – flew off the shelves. Nike pulled in a cool $150 million, according to Brandastic. The shoes were, in fact, so successful that certain limited-edition versions of the Air Jordan sneakers have sold for up to $25,000.

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The Air Jordan brand continued to grow and far exceeded everyone’s initial expectations. Just as Jordan himself gained staggering wealth from the deal, so did Nike. Before the basketball star had come along, Nike was struggling in the face of bigger companies like Reebok and Adidas. Now it had eclipsed them all.

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In 1992 Jordan did an interview with Playboy magazine and was asked, “Did your success with Nike surprise you?” The sporting legend answered, “Yeah, that was something. First, I thought it was a fad. But it’s far greater now than it used to be. The numbers are just outrageous.”

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Elsewhere, Jordan talked to Cigar Aficionado about what he himself did on the business side of things. The star explained, “Once the brand had evolved into something of significance, we decided to see if we could create its own foundation, separate from Nike. We wanted to give it an appearance of two entities, with Nike as the parent company and Brand Jordan as a subsidiary.”

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Jordan continued, “I was given the opportunity to get involved at a hands-on level: touching, creating, approving everything that has the Jumpman [logo] on it. We took Nike off the brand, and put the Jumpman on the brand to see if the public would receive us properly. And they have.”

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The Air Jordan brand was all tied up in his own image, Jordan explained. He said, “Competitiveness. Design. Creativity. Style. Those are all the things that make up my personality. And they have been turned into a product that sells. The public has received that message consistently each and every time.”

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These days, Brandastic reports that the star earns at least $130 million a year from the Air Jordan brand. And Nike is, of course, an absolute powerhouse of a company. It’s one of the most lucrative deals in sports history – but it might not have happened at all without the pushing of David Falk and Jordan’s own parents.

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