How Michael Jordan became world’s richest athlete
Michael Jordan was ratings gold for TV networks during his days dominating on the hardwood. He appeared in the four highest-rated NBA Finals of all time, with viewership peaking at 29 million per game in 1998. When he left the Chicago Bulls for good in his second retirement, Finals viewership plunged 45%. In the two decades that followed, the NBA hasn’t even come close, with the highest-rated Finals—the Golden State Warriors versus the Cleveland Cavaliers—pulling 20 million viewers in both 2016 and 2017.
This weekend, with the sports world shut down, MJ is making a comeback. The much anticipated ten-part documentary series The Last Dance, which follows Jordan’s final Bulls season, kicks off Sunday night on ESPN with a pair of episodes. The series will unravel, two episodes at a time, every Sunday night through May 17. The series is available on Netflix outside the U.S.
The documentary was originally scheduled for a late June release, but ESPN, which is suffering from a dearth of programming caused by the coronavirus quarantines, rescheduled it after fans flooded social media with pleas to move up the release. The outpouring revealed the depth of the public’s love affair with the 57-year-old star, who during his retirement has entered the Hall of Fame in 2009, triggered a legendary internet meme and become the richest athlete of all time.
To mark the occasion, Forbes broke down the business of being Michael Jordan.
Net Worth
While most billionaires lost money over the past 12 months, Jordan’s net worth rose $300 million thanks to a higher value for the Charlotte Hornets, the NBA franchise he owns roughly 70% of, and $145 million in earnings, largely from Nike. His Hornets stake is worth $940 million net of debt. Jordan ranked No. 1,001 last month in Forbes’ annual tally of the world’s billionaires with an estimated $2.1 billion fortune. Jordan joined the three-comma club in 2014.
Tiger Woods is the next-richest athlete at $800 million.
Playing Salary
In total, Jordan earned $94 million before taxes during 13 seasons with the Chicago Bulls and two years with the Washington Wizards, plus the $4 million the Bulls paid him when he sat out the 1993-94 NBA season to play minor league baseball.
To put that salary into perspective, Jordan’s first contract in 1984 paid $2.8 million over four years. That’s about $7 million after adjusting for inflation, or $1.75 million a year. The top draft pick in 2019, Zion Williamson, will make $44 million in his first four years. It was not until his 12th season, with four NBA titles and an equal number of MVP Awards to his name, that Jordan was awarded the league’s top salary of $30.1 million. He did again the following year with $33.1 million before retiring in 1998. It would be 16 more years before another NBA player (Kobe Bryant) made $30 million, thanks to a cap on individual salaries implemented in 1999.
Jordan returned as an active player in 2001 with the Wizards, where he was a part-owner and president of basketball operations, donating his $1 million annual playing salary to relief efforts for the victims of the September 11 attacks.
Endorsements
The NBA made Jordan famous, but it was his sponsors that made him rich. Over nearly four decades, he’s earned $1.7 billion (pre-tax) off the court from brands like Nike, Coca-Cola, McDonald’s, Wheaties, Chevrolet and others, and he still pitches Nike, Hanes, Gatorade and Upper Deck.
Nike
Nike has always been Jordan’s biggest backer. His initial five-year Nike deal signed in 1984 was worth $500,000 annually (about $1.2 million in today’s dollars), plus royalties. His take last year (included in the tally above) was $130 million by Forbes’ count, four times as much as that of LeBron James, who has the NBA’s second-biggest shoe deal.
Nike built the Jordan Brand into a massive standalone business with $3.1 billion in wholesale revenue in the fiscal year ending May 2019, up 10% from the prior year. Even with the coronavirus impact, sales in the current fiscal year will likely be greater, according to recent reports from Nike. The company said the brand had its first billion-dollar quarter in late 2019 and highlighted Jordan as a driver of growth in the latest quarterly results.
“What’s most exciting is we’re still in the early stages of diversifying the Jordan portfolio,” former CEO Mark Parker said when announcing second-quarter results. “And we’ve continued the momentum into Q3 with a significant holiday launch of the Jordan 11 ‘Bred,’ meeting demand for one of sneaker culture’s all-time favorites at an incredible scale.”
Nike released the Air Jordan XXXIV basketball shoe in September, and current NBA players Zion Williamson, Jayson Tatum and Rui Hachimura wear it on the court. Nike’s share of the U.S. basketball performance shoe market—which includes the Jordan Brand—was 86% in 2019, according to market research firm NPD. It has a 96% share of the broader lifestyle basketball category.
Hornets
Jordan expected to return to his role as an executive and owner of the Washington Wizards basketball team when he retired for good in 2003 but was forced out by then-Wizards owner Abe Pollin. Three years later he was back, buying a minority stake in the Charlotte Bobcats, whom have since been renamed the Hornets. He took majority control of the team in 2010 in a deal valued at $175 million that was largely funded with debt. He eventually raised his stake to 90%.
His investment was just in time for an explosion in team values triggered by three major events: a new collective bargaining agreement that cut players’ share of revenue to 50% in 2011, from 57%; the Ballmer bump, which came after former Microsoft CEO Steve Ballmer paid $2 billion in 2014 for the Los Angeles Clippers, more than three times the previous record NBA price; and a new NBA TV deal with ESPN and TNT that tripled the value of the previous pact.
Jordan cashed in some of his Hornets equity in September when he agreed to sell roughly 20% in the team at a $1.5 billion valuation to New York-based hedge fund managers Gabe Plotkin and Daniel Sundheim.
Investments
While the Hornets are by far Jordan’s biggest investment, he’s individually participated in funding rounds for Sportradar, a Switzerland-based sports data provider; headphone brand Muzik; Gigster, a San Francisco-based marketplace for freelance tech talent; and aXiomatic. Jordan joined fellow NBA Hall of Famer Magic Johnson in 2018 as an investor in aXiomatic, which is the parent company of esports squad Team Liquid, recently valued at $320 million.
Jordan and three fellow NBA owners—the Los Angeles Lakers’ Jeanie Buss, the Milwaukee Bucks’ Wes Edens and the Boston Celtics’ Wyc Grousbeck—launched a super-premium tequila brand, Cincoro, last year. The most expensive bottle in the line, Extra Añjeo, retails for $1,600.
MJ joined the investor group that bought MLB’s Miami Marlins for $1.2 billion in 2017. Derek Jeter, a longtime Jordan pal, is the club’s CEO and owns 4% of the team while Jordan owns less than 1%. It marks a return to baseball for Jordan, who spent a year playing minor league baseball with the Chicago White Sox organization in 1994. (He rejoined the Bulls the following year with a memorable two-word press release: “I’m back.”)
Jordan also owns a car dealership and is a partner in Cornerstone Restaurant Group, which runs five Jordan-branded restaurants.
Chicago Bulls
Not only does MJ have the Midas Touch when it comes to his own bank account, but his magic has also helped others build their own billion-dollar fortunes.
In 1985, the year after Jordan was drafted, Jerry Reinsdorf led an investment group that paid $16 million for the Bulls. Four NBA teams were sold that year—including in Milwaukee, Denver and Utah—with the Bulls being the cheapest of the bunch. By the time Jordan retired for the second time after the 1997-98 season, the Bulls were the NBA’s most valuable team, and while the team has reached the Eastern Conference Finals only one time since, its value has continued to rise, even though in Jordan’s absence the Bulls have been surpassed in value by the New York Knicks, the Los Angeles Lakers and the Golden State Warriors. The Bulls ranked fourth in the NBA at $3.2 billion in Forbes’ annual franchise valuations in February, producing an annualized return for Reinsdorf of 17% versus 6.7% for the S&P 500 before dividends.
Philanthropy
Jordan’s multimillion-dollar share of the proceeds from The Last Dance will all go to charity, including the Friends of the Children nonprofit in support of the group’s national expansion and work in Charlotte and Chicago, as well as other as-yet identified beneficiaries.
Jordan joined most other NBA owners with a pledge to pay arena workers for missed games during the coronavirus stoppage, and the club has donated to relief efforts in the Carolinas. In recent years, he wrote seven-figure checks toward hurricane relief efforts in both the Bahamas and the Carolinas, and he has been involved with the Make-A-Wish foundation for three decades as a donor and grantor of hundreds of wishes.
The first of two Novant Health Michael Jordan Family Medical Clinics opened in October to serve underprivileged members of the Charlotte community. Jordan contributed $7 million to the project. The clinic has ceased its normal operations during the coronavirus pandemic and is serving as an assessment center for patients with respiratory symptoms or a doctor’s referral.