Michael Jordan
© Christopher Hawinkel – USA Today Sports
Michael Jordan is certainly one of the reasons why Nike has become one of the most recognizable brands in history. These shoes, along with their excellent on-court performance, bring in millions and even billions of dollars to the footwear company every year. It’s safe to assume that Jordan owns at least a double-digit percentage of Nike’s revenue. The reality is that Greatest of All Time gets 5% per shoe.
Street robbery or fair?
Jordan signed with Nike in 1984. It was a five-year contract worth $500,000 a year. That was twice as much as Adidas, which was Jordan’s first choice. Nike expects to sell $3 million in Air Jordans in three years. They completely missed the mark as they made $126 million in their first year alone.
According to Forbes, the Jordan brand is valued at $10 billion. Interestingly, estimates show that Jordan has made about $1.3 billion from the shoe that bears his name over the past four decades. This is a relatively small amount given that the goat only gets five percent, or $10 to $12 per shoe.
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,He gets 5% per shoe. Jordan gets around $10-12 a shoe and sells for millions. That’s $150 million a year. It’s a lot of money and a lot of people looked at it and said, ‘Why is he only getting five percent?‘” Sean Cotton said, per Muggle State of Mind.
He doesn’t make shoes
One might think that Jordan’s royalties should exceed $150 million per year. But an experienced Mughal Cotton explains it in simple terms.
,Well, he doesn’t make shoes. His name is on it. You know what I mean,said Cotton.
Nike employs millions of shoemakers to make Jordans. In addition to labor costs, there are millions of other costs in the supply chain. Jordan doesn’t care about those expenses at all. All of these decisions rest with the company.
Whether you agree with Cotton’s explanation or not, $150 million a year is good money. It’s been more than two decades since Jordan was last seen on the basketball court, but he still makes millions from basketball shoes. In 2019, Jordan received $130 million from the Jordan brand, which is almost four times the amount of LeBron James signature shoes.
Five percent sounds like a paltry amount, but when you’re selling millions of shoes a year, those things fly away. It’s amazing that Jordan only played 15 years in the league, but his influence was such that he never had to work a day in his life again. The lesson here is clear: it should be the largest near you.
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