At his prime, Michael Jordan was a favorite of prominent businesses like Nike. In 1984, he secured a contract with Nike, which would eventually give birth to Air Jordan. Prior to signing with Nike, the brand was overshadowed by companies such as Adidas, Reebok, and Converse.
Adidas had a 50% higher revenue at the time, and Reebok outperformed Nike in the market. Converse, on the other hand, was the brand of choice for many NBA stars, including Jordan and emerging players such as Larry Bird and Julius Erving, according to Forbes.
Jordan wore Converse while at the University of North Carolina and was set to sign with Adidas when the Bulls first selected him. However, his agent, David Falk, encouraged him to join Nike because of his tight relationship with the company.
Jordan informed them he was not interested. Falk then turned to his mother, Deloris, to persuade the then-21-year-old to join Nike. Jordan eventually accepted Nike’s offer and began working on his own shoe company. This resulted in the development of Air Jordan.
According to Forbes, Nike initially offered Jordan a five-year contract with a basic salary of $500,000 per year, which was three times higher than any other NBA shoe agreement. The initial Air Jordan sneaker was an instant success, selling $126 million in the first year.
Nike has profited handsomely from the Jordan brand ever since. Jordan Brand reported a 6 percent rise in sales and a revenue of $7 billion for fiscal year 2024, according to Boardroom. Under Sarah Mensah’s leadership, the brand outperformed all other divisions.
Meanwhile, Nike reported fiscal year 2024 revenues of $51.4 billion, up 1% from the previous year, according to Boardroom. Its fourth-quarter revenues were $12.6 billion, down 2%.
“We are facing our near-term challenges head on while making continued progress in the areas that matter most to NIKE’s future: serving the athlete through performance innovation, moving at the consumer’s pace, and growing the entire marketplace,” said Nike’s president and CEO, John Donahoe, in an earnings release. “I’m confident that our teams are lining up our competitive advantages to create greater impact for our business.”
The Jordan brand generated $4.7 billion in fiscal year 2021 and $5 billion the following year.