“This is the best sports business deal in history.” There’s a very good reason that popular sports analyst Joe Pompliano says this. The ‘best’ sports business deal is so robust that disappointing fourth-quarter earnings hardly dent the empire’s growth. This deal became the singular revenue source of creating the world’s first athlete-billionaire. And despite longtime rivals bringing in outstanding signature athletes, there’s no threat to the trajectory. This is the upward path of Nike and the Michael Jordan Brand. Individually.

The parent company and its bestseller dominate the biggest share of the global sneaker market. Nike is on track to become a $7 billion Goliath and make Michael Jordan richer. It’s a gap that their rivals will have a hard time catching up with unless there’s another ‘best’ sports deal worth mentioning.

Nike’s big gamble pays off six times over

In the early ’80s, Nike was in the red and in need of a revival. Their biggest chance was the outstanding future NBA superstar at UNC, fresh off an Olympic Gold. They were close to gambling their entire $250,000 annual ad budget on him. Yet Michael Jordan was reluctant. But a nudge from his mom, Deloris, pushed him to sign with Nike.

A young Michael Jordan was getting paid $2.5 million for five years. Nike’s first expectation from him was to sell 100,000 pairs of the Air Jordan 1 that was released in 1985. Jordan sold 1.5 million pairs and made Nike $100 million. They knew they had a goldmine then and even tried hard when MJ was close to leaving during the infamous ‘broken leg season.’

Jordan created the blueprint for brands and signature athletes in the future. He not only demanded a stock option, he urged Charles Barkley to do the same. Chuck credits his ex-best friend for the advice that makes him money to do this day.

Through unique commercials, mostly devised by Spike Lee, and the ‘Be Like Mike’ campaign, Air Jordans made sneakers a mainstream cultural phenomenon. With sneakers now a norm, Nike and the Jordan Brand cashed in on the relevance.

Michael Jordan profits from relevance

His Airness retired in 2003, but the Jordan Brand remained relevant in different colorways, retro-releases, and new signature brand ambassadors in sports and entertainment. With recent forays into football, track, baseball, and college sports, Nike is far from that bankrupt straggler in the ’80s.

In 2018, the Jordan Brand did something new by going into the soccer world, signing with Paris Saint-Germain. That year, Nike’s sales exploded to $2.8 billion. It’s never posted a decline annually so far, closing 2023 at $6.6 billion.

Nike is projected to make $7 billion in 2024 despite reporting a fourth-quarter loss in June. Michael Jordan is smiling anyway because his silhouette on every shoe is worth a 5% chunk of those billions. Through 15 seasons and three retirements, Jordan made $94 million from a storeyed NBA career alone. His lifetime earnings from Nike are $1.2 billion at least. Without any new ad campaigns starring its namesake, Air Jordan sales make MJ at least $350 million annually.

After he became the first billionaire athlete, the Charlotte Hornets’ sale last year boosted his net worth to $3.5 billion. That landed Jordan in the Forbes 400 for the first time in 2023. He dropped a few spots in 2024 but he’s still in that list above Magic Johnson.

He’s only going to get richer as he takes $350 million out of that $7 billion. The 5% remains the same but the takeaway increases with Nike’s sales. Right now the entire sneaker market is occupied by two brands – Nike, followed by the Jordan Brand. The other brands come after.

While Adidas – who passed on Jordan – is reeling since cutting one of its bestsellers and Shaq’s trying to revive Reebok, Nike is secure. Because its 40-year-old gamble paid off.