Nike’s love affair with MJ

Phil Knight, a former track athlete at the University of Oregon, co-founded with his coach Bill Bowerman a company in the early 70s a running shoe retailing company named after a Greek winged goddess of victory, Nike.

Fast forward to January of 1984 somewhere in the woods of Oregon.  Knight, together with top Nike officials were deliberating on a project.  They had misgivings on a 6-foot-6 shooting guard from North Carolina named Michael Jordan.  At the time, they didn’t know nothing about him.

Also with them was Sonny Vaccaro, whom Knight met in 1979.  He was some sort of a basketball operator who would approach college coaches and make endorsement deals with them and who in turn would make their players wear the brand chosen.

The company’s entry into professional basketball was not successful at that time as NBA players were using the more popular Adidas and Converse models.  Knight was aware that there’s a gold mine in the pro league, made more popular by Magic Johnson and Larry Bird.  But the two of them were wearing Converse.

With most of the big-name players already with Converse, Knight and his men decided to gamble on a rookie as their walking billboard.  They upped the gamble that instead of only making and selling a signature shoe around a player, they would also market performance apparels.

The 1984 Draft class was loaded.  There was Akeem Olajuwon as the top pick who played in three Final Fours with the University of Houston.  Charles Barkley was there, Sam Perkins, Kevin Willis, a potential white star in John Stockton and of course, Jordan, at pick number 3.

Agreeing to Vaccaro’s instinct, they decided on the kid from UNC.  Big question was, will he deliver the goods for Nike?  Jordan’s college road to fame was when he hit the game-winning shot in the 1982 NCAA Finals and that was his only Final Four appearance.  And he was not a prolific scorer then.  The idea of a young, unknown black athlete selling shoes to white America was risky.

It turned out that Vaccaro was not a one-hit wonder with his faith in Jordan.  He was also responsible for Adidas making a resurrection in the mid-90s when he gambled on Kobe Bryant and struck a deal with a Catholic high school in Ohio that had a 15-year old kid named LeBron James.  Both as we all know are locked for life with the company.

Long story short, the original red, white and black Air Jordan was then born in 1985, became an instant hit and Nike’s shoe sales were never the same again.  A bidding war ensued between Nike, Adidas and Reebok and closing the deal for $500,000 with a share of the sales for Jordan, Nike won the shoe battle.

1985 was the birth of the iconic footwear and NBA commissioner David Stern further provided Nike the marketing mileage when he banned the shoe for non-regulation league colors.  Jordan continued wearing it and Nike gladly paid the $2,000 penalty every playing night.  The company knew right then that they are into a financial windfall.

Demand then shot thru the roof.  Nike’s total revenue in 1984 was about $900 million.  When Jordan was nearing his fifth of six NBA titles in 1997, Nike’s income topped $1.2 billion.

Jordan, with its Jumpman logo is now a separate brand at Nike and to date, there are 31 different models (excluding variations), each with a different motto from the Air Jordan I “Notorious” to the Air Jordan VII “Pure Gold” which debuted during the 1992 Olympics to the Air Jordan XVI to XVIII during his stint with the Washington Wizards and down to the models used by Carmelo Anthony, Chris Paul and for some time Dwayne Wade.  The AJ XXXI released last year is called “Anti-Gravity Machines”.  Yeah, as if wearing them lets you float.

The Jordan Brand as of the momentis a $1 billion sales business for Nike.  Michael Jordan, thru his lucrative deal with the company is now estimated to have a net worth of $1.3 billion, majority of the earnings coming from royalties and endorsements from Nike. 

Phil Knight’s net worth?   As the 26th richest in the world, he’s estimated to be worth $26.6 billion.  Among the subsidiaries under the Nike empire are Converse and Hurley.  The company used to own Umbro and Cole Haan but was sold to Iconix Brand Group Inc. for a bargain price.  Oh yes, it’s gotta be the shoes.