Nike Had Conditions 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
Michael Jordan and his Jordan Brand are two of the most famous names in the world right now. The Chicago Bulls legend and his signature shoes became a big thing as soon as they arrived in the NBA, earning a lot of love and recognition from people around the world.
It wasn’t an easy job but they did it, although things could have been a lot different for MJ and his career. After he decided to enter the NBA, the player wanted to wear Adidas shoes but that option wasn’t easy for Michael. He had used Converse shoes in college and now that he wanted to join the German company, their organization wasn’t so interested in getting Jordan on board.
The story of how Jordan landed in Nike is fascinating with all the little details that were in play to put this guy where he was, making the things he did and earning the money he earned with a series of shoes that made as much or more history than him.
Darren Rovell of ESPN wrote in 2013 all the things that needed to happen and the little pushes that Michael needed to sign with Nike to change his life and the company forever.
All Michael Jordan wanted to wear was Adidas in the NBA.
Although he wore Converse at North Carolina, because his coach Dean Smith was getting paid about $10,000 a year to put the brand on his players, the German make was his dream.
But Adidas wasn’t making an offer. It wasn’t that they thought Jordan wasn’t worth anything; they were just caught at a bad time. After company founder Adi Dassler died in 1978, his wife, Kathe, took over the business. But she had her son, Horst, and her four daughters each running separate divisions.
The husbands of the daughters also were closely involved, which didn’t make things easy. By the time of the Jordan negotiations, tensions were high and thoughts of a succession plan were a top priority as Kathe was not in good health. She died later that year.
He had the chance to meet with Converse and although he wasn’t so excited to be there, he still went thanks to his relationship with coach Smith.
“We’re sitting in the conference room and they’re saying things like, ‘We are basketball,’” Jordan’s agent David Falk recalled. “They’re telling us that they have Magic, Bird, Dr. J and Mark Aguirre.”
According to Joe Dean, who was in charge of Converse’s marketing at the time, Michael was supremely interested in the company’s pitch.
“I give him a lot of credit,” Dean said. “He was asking, ‘With all these stars, where do I fit into the conversation?’”
John O’Neil, the president of Converse, took that question.
“We’ll treat you like all our other superstars,” Dean remembered O’Neil saying, offering him a financial package of about $100,000 a year, commensurate with what the top players were earning at the time.
Michael’s father, James, wanted in.
“Don’t you guys have any new, innovative ideas?” he asked.
Dead silence.
There was another candidate to land the North Carolina product, Sport-Bilt, which had O.J. Simpson on their board, but they were more of a family company that couldn’t compete against bigger companies like Nike. They saw their opportunity and took it, even though they weren’t going through the best moment.
Converse and Adidas weren’t ready for Jordan, but all of a sudden, Nike needed him. If the company could only get him on the plane.
He had just come back from the Olympics, and after a full college basketball season, he told Falk he was exhausted.
“I have no interest in going there,” Falk said Jordan told him. “Just do what you need to do to get me with Adidas.”
Falk wouldn’t have it. Although he was the least senior partner at his firm and had met with Jordan in person only a couple of times, he had to have Jordan at Nike with him.
Nike was Falk’s go-to company, and he had a tremendous relationship with Rob Strasser, the guy who did all the deals. “I’d tell Rob how much I needed to have a player sign with Nike, and he made it work,” Falk recalled. Most of Falk’s clients wore Nike, including Bernard King, Phil Ford and Moses Malone.
Falk didn’t want to push his luck, and he wasn’t getting through to Jordan, so he called Jordan’s parents, James and Deloris. He told them he needed their son at the presentation. And the next thing Falk knew, Jordan was packing his bags with his parents in tow.
When he arrived at the meeting, Jordan was welcome as a star, because they knew they would get their star if they convinced this kid to go with them.
Jordan was shown a highlight tape of himself to the Pointer Sisters “Jump,” a song that had recently debuted. Moore showed him a red-and-black shoe design. Jordan said that one of the reasons he liked Adidas was because they were lower to the ground than the higher shoes that Nike was making. Moore said he could tailor them to Jordan’s liking.
No one was doing that at the time. You were given what the company gave you.
“They really made a great effort of trying to have my input on the shoe,” Jordan told me five years ago, adding that he had never put on a Nike shoe to this point in his life.
They had very valuable information of the player and didn’t hesitate to use that in their favor. Even the president and co-founder of Nike was involved in the meeting.
Then they moved into another room, where Jordan was shown more potential plans. During the talk, Nike president and co-founder Phil Knight walked into the room. Strasser knew that Jordan was a car nut, so he said to Jordan, “If you come with Nike…”
It was at that point that Falk’s head swiveled to the back of the room and saw Knight clutching his chest, as if Strasser had the keys to a car in his pocket. Strasser reached in and took out two die-cast Mercedes cars.
“I think Phil almost had a heart attack,” Falk said.
Later that night, after the group went out to dinner, Falk asked Jordan — who was emotionless the whole trip — what he thought.
“I don’t want to go to another meeting,” Jordan told Falk.
The company still had some things to ask Jordan. They treated him like a big star and they expected him to be exactly that, which is why they put certain conditions to secure him the final two years of his first contract with Nike.
On the advice of Vaccaro, Nike offered Jordan $500,000 a year in cash for five years, which was a ridiculous number at the time. The previous highest contract was James Worthy’s deal with New Balance, an eight-year deal worth $150,000 a year. Adding stock options and other parts of the deal, Falk said Jordan would earn $7 million over those five years, as long as Nike didn’t sever the contract.
In order to protect the company, Nike included a clause in Jordan’s deal that said if he didn’t accomplish one of three things — win Rookie of the Year, become an All-Star or average 20 points per game — in his first three years, it could end the deal two years early. Falk then asked, “What happens if he doesn’t do any of those three, but still sells shoes?” Nike’s response, according to Falk, was if Jordan sold at least $4 million worth of shoes in his third year, he’d get the final two years of the deal.
That situation led Jordan to seek alternatives and he even reached out to Adidas again, asking them to meet Nike’s contract and he would sign with them but none of that happened.
In the end, Michael stayed with Adidas, accomplished every condition they put on the list, and surpassed the expectations about him. He created one of the most famous shoes in the world, made a lot of money with his Jordan Brand, won six NBA championships, set a lot of records in the league and left the game as the greatest basketball player to ever do it.
We don’t know how things would have fared for him if he signed with Adidas but it’s fair to say everybody’s glad the German company didn’t pay much attention to the Chicago Bulls legend.
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