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How a 1984 sneaker deal for Michael Jordan evolved into a $3-billion empire

Owners HQ shoe showcasing event at Mint wows fans

The Mint Museum uptown was the site of "Owners HQ," a showcasing event of the Jordan Brand and all the products, tech, and gear they're rolling out for the All-Star Game.
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The Mint Museum uptown was the site of "Owners HQ," a showcasing event of the Jordan Brand and all the products, tech, and gear they're rolling out for the All-Star Game.

If the NBA All-Star Game is a celebration of basketball, having the game in Charlotte is in large part a celebration of Michael Jordan. And Jordan’s eponymous sneaker line that helped make him a billionaire is having its time in the spotlight over the weekend.

Nike’s $3 billion Jordan Brand has come a long way from when the company signed with Jordan in 1984. It’s also helped give Nike an even greater competitive edge in recent years over its rivals, experts say.

“Jordan is one of the more important brands in the Nike portfolio,” Edward Jones analyst Brian Yarbrough told the Observer this week. “It has been an unbelievable runaway success for Nike.”

Jordan Brand, which also makes casual athletic apparel, has an even heavier presence at the NBA All-Star Game this year compared with 2017, when the game was originally supposed to be held in Charlotte. (The league pulled the game from the city in 2016 over its opposition to North Carolina’s House Bill 2, which the league and others said was discriminatory against the LGBTQ community.)

For instance, 2018 was the first time the NBA All-Star players’ jerseys were designed by Jordan Brand and adorned with its famous Jumpman logo. Also last year, Jordan Brand launched its first shoe line for women.

And this year is the first time Charlotte Hornets point guard Kemba Walker, a Jordan Brand athlete, is an All-Star starter.

The brand also has a physically imposing presence in uptown, blocks from where the All-Star Game will be held Sunday at the Spectrum Center. The Mint Museum Uptown has been transformed into a Nike and Jordan Brand shrine.

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The basketball court at Owners HQ event. The Mint Museum uptown held “Owners HQ,” a Thursday afternoon showcasing event of the Jordan Brand and all the products, tech, and gear they’re rolling out for the All-Star Game. Diedra Laird dlaird@charlotteobserver.com

The work on the massive display, called “Own the Game,” began over a week ago.

It showcases areas where customers can try on newly launched, hard-to-get Nike and Jordan sneakers, a basketball court, a jersey customization station and a Snapchat lounge where fans can create their own augmented reality filter.

The display is an effort to educate fans on Jordan and Nike’s history and engage young customers, according to Scott Dixon, vice president and general manager of the Jordan Brand in North America.

“The potential of the Jordan Brand ... and the future of the brand … has never been brighter,” Dixon said.

Evidence of the brand’s strength is the sheer demand for Jordan products, Dixon said. When the company launched the Air Jordan XI ‘Concord’ in December, the $220 shoes sold out almost instantly, he added.

“It was the largest volume program we’d ever put into the marketplace for a launch,” Dixon said. “That just reminds you of the health of the brand.”

For the All-Star Game this year, Jordan launched a handful of limited edition sneakers.

The company partnered with a local retailer, Social Status, to design a black and purple sneaker called the Air Jordan VI NRG. Michael Jordan surprised crowds of customers who’d lined up for the launch of the $250 shoe at Social Status’ Central Avenue store Thursday.

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The Air Jordan VI NRG, designed in collaboration with the Charlotte retailer Social Status Courtesy of Jordan Brand

Following its foray into women’s shoes last year, the brand plans to expand into women’s apparel in the near future, Dixon said, although he declined to say when.

Nike lost a bit of market share to Adidas in 2016-2017: Adidas brand sales in North America were up 25 percent in 2017, compared to 3 percent for Nike, according to an April 2018 CNN Business story on the competition between the two brands.

But brands like Jordan have helped make up some ground with sneaker innovation and new products like women’s shoes, Yarbrough said. Despite the fact that it makes up only about 10 percent of Nike’s total sales, “Jordan is a brand that’s grown every year,” he added.

Jordan remains involved in day-to-day decisions within the Jordan Brand, Dixon said. That includes everything from design to product to marketing.

“He still has an incredible attention to detail in everything he does. We’re fortunate that he continues to be very engaged in where the Jordan brand is today,” Dixon added.

Get ready to see all new silhouettes and All-Star colorways from shoe companies. Also find out the best place in Charlotte to go if you want in on the All-Star shoe action.

A long way

Nike almost didn’t land Jordan, who’d worn Converses for years and nearly signed with Adidas before he started his NBA career.

In 1984, after Jordan skipped his senior year at the University of North Carolina for a five-year, $4-million contract with the Chicago Bulls, he also signed a contract with Nike after the company promised to name a new shoe after him, the Air Jordan. According to ESPN, the deal was for $500,000 a year in cash for five years plus stock options. All told, ESPN reported, the deal was worth just over $7 million.

Shoe companies had sponsorship deals with athletes before, but this was the first time a company named a shoe after a rookie.

“I’m not sure anyone could have imagined quite how incredible it would have all turned out. It was the groundbreaking deal that ultimately a lot of folks have tried to imitate ever since,” Dixon said.

Buzz Peterson, a former UNC teammate of Jordan and current Hornets assistant general manager, recently told the Observer that Jordan boasted to him about the Air Jordan name and his Nike deal soon after he signed it in 1984.

“I was like, ‘Oh my god (laughs) — how arrogant are you?’ Really?” Peterson said. “And sure enough, as years went on and on, now it’s crazy how people are nuts over the shoe. Waiting in line for it, and I sit back and I just laugh about how all this has come together. He took off.”

Jordan is the highest paid athlete of all time, according to Forbes, in part because of deals like the one he has with Nike. Jordan became a billionaire with his 90-percent stake in the Hornets, a team now worth an estimated $1.05 billion, according to another recent report from Forbes.

Few people in the 1980s, however, could have anticipated the staying power and the growing popularity of the brand beyond Jordan’s retirement.

“It’s amazing that a guy who hasn’t played basketball in (so many) years can be such a presence,” said Yarbrough, the analyst.

Michael Jordan, Dwayne wade and NBA Family lend a hand at the Second Harvest Food Bank of Metrolina on Friday before the NBA All-Star game.

Staff writer Brendan Marks contributed.

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As the retail and sports business reporter for the Observer, Katie Peralta covers everything from grocery-store competition in Charlotte to tax breaks for pro sports teams. She is a Chicago native and graduate of the University of Notre Dame.
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