Nike had one condition before giving rookie Michael Jordan a contract: either be NBA rookie of the year, or average 20 PPG, or be an all-star, or sell $4M worth shoes in a year.
“I’m a huge Michael Jordan fan, and I always loved the story about how he had to meet certain sales targets before he became a Nike endorser, but I never found any actual evidence that it was true:
Michael Jordan and his Jordan Brand are two of the most recognizable names in the world today. The Chicago Bulls legend and his signature shoes have been all the rage since they first appeared in the NBA, garnering much love and recognition from people all over the world.
It was no easy task, but they did it, even though it could have ended very differently for MJ and his career. After deciding to go to the NBA, the player wanted to wear Adidas shoes, but this option was not easy for Michael. He had worn Converse shoes in school, and when he wanted to join the German company, their organization wasn’t too keen on Jordan.
The story of Jordan’s arrival at Nike captures all the little details that got this man where he was, did what he did, and made so much money from a line of shoes that went down in history as much or more than he did.
ESPN’s Darren Rovell wrote in 2013 about all the things that needed to happen and the little nudges it took for Michael to sign with Nike and change his life and the company forever.
In the NBA, Michael Jordan only wanted to wear Adidas.
Although he wore Converse in North Carolina because his coach Dean Smith was paid about $10,000 a year to push the brand on his players, the German brand was his dream.
But Adidas has not made an offer. It’s not that they thought Jordan was worthless, it’s that they got caught at the wrong time. After the death of founder Adi Dassler in 1978, his wife Kate took over the company. But his son Horst and his four daughters ran separate units.
The girls’ husbands were also closely involved, which didn’t make things easier. At the time of Jordan’s negotiations, tensions were running high and thinking about a succession plan was a top priority as Kate was not in good health. She died the same year.
He had the chance to meet Converse, and although he wasn’t happy about the meeting, he went anyway, thanks to his relationship with Coach Smith.
We’re in the conference room and they say something like: We’re basketball players, said David Falk, Jordan’s agent. They say they have Magic, Bird, Dr. J and Mark Aguirre.
According to Joe Dean, who was in charge of marketing for Converse at the time, Michael was very interested in the company.
I’m going to get him back, Dean said. He asked: Where do I fit into the conversation with all these stars?
John O’Neil, president of Converse, answers this question.
We treat you like any other superstar, recalled Dean O’Neill, who offered him a financial package of about $100,000 a year, the same as the top players at the time.
Michael’s father, James, wanted in.
Don’t you have any new, innovative ideas?
There was another product candidate in North Carolina, Sport-Bilt, where O.J. Simpson was on the board of directors, but it was more of a family business that couldn’t compete with the big companies like Nike. They saw their chance and seized it, even though they didn’t have their best moment.
Converse and Adidas weren’t ready for Jordan, but Nike suddenly needed him. If only the company would put him on a plane.
He had just returned from the Olympics and after a full season of college basketball, Falk told me he was tired.
I have no interest in going, Falk said, to which Jordan replied. Just do what you want me to do with Adidas.
Falk didn’t let them push him around. Even though he was the least experienced partner in his firm and had only met Jordan in person a few times, he needed him at Nike.
Nike was the most important company to Falk, and he had a good relationship with Rob Strasser, who handled all the business. I told Rob how much I wanted a player to sign with Nike, and he made sure of it, Falck recalled. Most of Falk’s clients wore Nike, including Bernard King, Phil Ford and Moses Malone.
Falk didn’t want to tempt fate and when he couldn’t reach Jordan, he called Jordan’s parents, James and Deloris. He told them he needed their son for the presentation. And before Falk knows it, Jordan is packing up with his parents.
When he arrived at the meeting, Jordan was welcomed as a star, because they knew that if they could convince this boy to go with them, they would get their star.
Jordan was shown a recording of his performance of the song Jump by the Pointer Sisters, who recently made their debut. Moore showed him the red and black shoe model. Jordan said that one of the reasons he liked the Adidas sneakers was that they were lower to the ground than Nike’s taller sneakers. Moore said he could make them to Jordan’s specifications.
At the time, no one did. You got what society gave you.
They really made me want to work on the shoe, Jordan told me five years ago, adding that until then he had never worn a Nike shoe in his life.
They had very valuable information about the player and did not hesitate to use it to their advantage. Even the president and co-founder of Nike attended the meeting.
Then they went to another room where Jordan was shown other possible plans. During the interview, Nike president and co-founder Phil Knight entered the room. Strasser knew Jordan was obsessed with cars, so he told him: If you come with Nike…
At that moment Falck’s head turns to the back of the room and sees Ritter clutching his chest as if Strasser had his car keys in his pocket. Strasser bent down and pulled out two Mercedes cars.
I think Phil almost had a heart attack, Falk said.
Later that evening, after the group had gone to dinner, Falk asked Jordan, who had not been emotional the entire trip, what he thought.
I don’t want to go to another meeting, Jordan told Falk.
The company still had questions for Jordan. They treated him like a big star and expected him to be one. So they put some conditions on him to guarantee the last two years of his first contract with Nike.
On Vaccaro’s advice, Nike offered Jordan $500,000 a year in cash for five years, a paltry sum at the time. James Worthy’s previous highest contract was with New Balance, an eight-year contract worth $150,000 per year. With stock options and other elements of the contract added, Jordan would make $7 million over those five years, according to Falk, assuming Nike doesn’t break the contract.
To protect the company, Nike included a clause in Jordan’s contract that says it can be terminated two years early if he fails to meet one of three conditions: not be voted Rookie of the Year, not become a star, or score 20 points per game, within the first three years. Mr. Falk then asked what would happen if he did none of these three things, but still sold shoes. According to Falk, Nike told him he would get the last two years of the contract if Jordan sold at least $4 million worth of shoes in the third year.
This situation forced Jordan to look for alternatives and he even approached Adidas again to ask them to honor his contract with Nike and sign with them, but nothing came of it.
In the end, Michael stayed with Nike, met all the conditions they set and exceeded all expectations associated with him. He created one of the world’s most famous shoes, made a lot of money with his Jordan brand, won six NBA championships, set numerous league records and retired as the greatest basketball player in the history of the game.
We don’t know how his business would have gone if he had signed with Adidas, but it’s safe to say that everyone is glad the German company didn’t pay much attention to the Chicago Bulls legend.