HOOP MAGAZINE: DEC. 1991 - JORDAN HAS ENDORSEMENTS DOWN
Michael Jordan: Phenomenon
By Mark Vancil, Hoop Magazine, Dec. 1991
FOR SEVEN YEARS, MICHAEL JORDAN'S LIFE HAS ROLLED ALONG on cruise control. Already exceeding the speed limit when he entered the NBA in 1984, Jordan quickly blew past the norms and practices of product endorsement while redefining his position on the floor.
If he has slowed along the way, he has done so only to readjust his speed. And in the wake of Chicago's first NBA title, he's now moving faster, covering more ground and making more money along the way than any player in the history of team sports.
His legend, which has been formed and fashioned by an incredible combination of circumstance, talent and desire, only grew when he powered the Bulls past Los Angeles last June. Off the court, where Jordan's economic feats are fast dwarfing his game performances, he has taken another historical leap.
In early August, Quaker Oats, which spends only about $30 million annually to advertise Gatorade, signed Jordan to a numbing $18 million, 10-year contract. If it was a stunning coup for Quaker Oats, it was also a costly one, as the company had to outbid Coca-Cola, which had featured Jordan in commercials for several years.
A championship ring has made Jordan hotter than ever.
"He transcends the sport of basketball," said Nike's Melinda Gable. "It's hard to conceive of him being more popular than he already was, but that's what's happened."
"He transcends almost every kind of category you could put him in," said Alan Friedman, editor of Team Marketing Report in a St. Louis Post-Dispatch story. "He is one of the few players who has built respect and admiration worldwide."
But if Jordan blinked, no one noticed. With the Gatorade deal done and others on the horizon, Jordan's total compensation is expected to fall between $16 million and $20 million during the 1991-92 season. In other words, Jordan will come close to doubling the income of the Laker's Magic Johnson, who has played five more years and has won four more titles.
It also clearly makes Jordan the highest paid athlete in the history of team sports. Arnold Palmer, the acknowledged endorsement pioneer, figures to have dropped well behind Jordan. In fact, according to Brian Murphy, publisher of The Sports Marketing Letter, Jordan and Johnson are the only non-golfers among the top five athletes in annual income. Palmer's second, Jack Nicklaus is ranked third, Johnson fourth and Greg Norman fifth.
"I saw that figure where he had just passed Palmer with $11 million (in annual income)," said ProServe's David Falk, who represents Jordan. "That's not even close. He has single deals worth more than that!"
But it's what Jordan refuses to do that makes the numbers so amazing. For at least three years, Jordan has routinely refused appearances outside his corporate obligations. And there have been some mind-boggling offers, including one that surprised even the Bulls' front office.
In 1990 a Canadian company wanted Jordan for a three-day appearance in Toronto. The first offer amounted to more that $100,000, plus all the amenities. Jordan refused. And he continued to refuse, even when the company upped the ante to $250,000.
Here's another one: The national airline of Jordan (the country) is reported to have offered Jordan (the player) $1 million for a one-time appearance with that country's national team to promote tourism. It never happened.
And there have been other offers, monster appearance deals and huge endorsement projects that Jordan has ignored.
Moreover, Jordan's $3.25 million salary is nothing close to what he's worth to the Chicago Bulls franchise. One prominent West Coast general manager said Jordan is worth the entire salary cap, or $12.5 million. Another put his worth at $6 million to $7 million with the cap. Falk said simply that Jordan will never get paid his true market value because the salary cap makes it impossible.
Indeed, Bulls chairman Jerry Reinsdorf bought the team for less than $20 million midway through Jordan's rookie season. Through some shrewd marketing (most of which revolved around Jordan), Jordan's presence both on and off the court and a significant upgrading of the overall talent, the team in now valued at $100 million.
In his rookie season alone, Jordan revived the Chicago franchise. The Bulls' attendance was just 6,365 a game the year before Jordan arrived. In 1984-85, despite another poor record, Chicago went to 11,887. For the last four years, Chicago Stadium has been full virtually every night. Television and radio contracts have skyrocketed and advertising revenues have risen to a level that not even Reinsdorf could have hoped.
Michael Jordan went from basketball player to worldwide marketing phenomenon with the Bulls' first championship.
"If I wanted to be greedy, I could make a lot more money," said Jordan. "I'm not a greedy person. But I like to get paid for what I'm worth. I like to make what I deserve. But I never try to overdo it. If I really wanted to make a lot of money and spread myself thin, I could do it. I could make $15,000 or $20,000 an appearance or sign basketballs for $50 a ball.
"If I was greedy, I could do that. Or I could sit here and cry about my contract, make it a big issue. And it would be a valid argument. I don't do that. I have never griped about other people making money. Hot Rod Williams made his money? Good. He was in position to do that.
"(Jon) Koncak made his $2.5 million a year? Good. I mean, you only fall into certain situations once in a lifetime, and he took advantage of it. I can't fault him for that. Anybody in the same situation, even if they couldn't pick up a basketball, would have done the same thing and I wouldn't fault them. No way."
One thing is certain: No one, not even Falk, who has choreographed much of Jordan's corporate rise, saw the latest crescendo coming. Two years ago, in a Newsweek article on Jordan's popularity, Falk talked as if the summit had been reached.
"This is not a fad," he said. "This is a crescendo. It's more a process than a thunderbolt."
Actually, it's been a little bit of both.
For Jordan, the planets starting lining up 10 years ago. He hit The Shot that helped North Carolina to an NCAA title. He went on to become a star on one of the most high-profile teams in college history, playing for one of the game's acknowledged legends in Dean Smith, and doing it all at a school known for its high standards and squeaky-clean image.
But it all came together the minute Jordan left North Carolina. If the foundation had been laid in Chapel Hill, the first bricks were positioned in Los Angeles.
The United States had boycotted the 1980 Olympic Games. When the 1984 Games rolled around, they rolled right into the glitter capital of the world. Jordan's game fit the venue. He led the United States in a blistering romp to the gold medal in Los Angeles and then headed for Chicago.
The entire show might have stalled there had it not been for the presence of Hakeem Olajuwon and one of the worst draft decisions in NBA history. Jordan could have ended up in Houston, but the Rockets, who had the first pick in the draft, decided on Olajuwon. Or he could have landed in Portland, where the Trail Blazers instead took Sam Bowie with the second pick. While Jordan's ascension might have been possible in either place, it could not have been as smooth or as swift as it has been in Chicago. Jordan not only landed in Middle America, but he went to a major city starved for success. He also went to a bad team, which demanded and allowed for every weapon in Jordan's arsenal.
Would he have been able to take over in Houston or Portland? Maybe, but certainly not as quickly and completely as he took over the Bulls. And what about the endorsements? While Nike's Air Jordan line would have catapulted Jordan into the national consciousness regardless of where he played, the impact could not have been as dynamic as it was in Chicago.
"We expected he'd be able to do some things, perhaps take it to a little different level when he came out of college," said Falk. "Nobody had any idea it would become this big. We didn't think it would. Michael's parents didn't think it would. Dean Smith didn't think it would. Even Michael probably didn't think it would."
"It was the perfect fit for me," said Jordan. "I'm glad I ended up in Chicago. I was in the right place at the right time."
And Jordan made sure it all paid off. With Falk directing and Jordan starring, walls crumbled and lines disappeared. If O.J. Simpson and Arthur Ashe crossed the color line in product endorsement, Jordan obliterated it.
In his first full season under the Nike logo, the Air Jordan line produced more than $153 million in revenue. McDonald's quickly got on board and Coca-Cola followed, along with Chicagoland Chevrolet dealers, General Mills (Wheaties), Wilson, Ohio Arts (toy company), Sara Lee (Hanes underwear), the Illinois State Lottery and others. In addition, Jordan now has personalized bubble gum, watches, formal wear, sleeping bags, greeting cards and calendars.
In 1988, Jordan's signature line of basketballs was estimated to have made $7 million for Wilson. In September of that year, Jordan signed a new eight-year, $25 million contract. That deal, given the market and Jordan's rising stardom, was outdated less than 18 months after he signed.
As for Nike, Jordan figures to have made close to $10 million last season in total compensation from that deal alone. Sales of Nike's basketball shoe line topped $500 million, and company stock, which Jordan started acquiring at $7 a share soared over $100 before splitting recently.
Meanwhile, Steve Levitt of Marketing Evaluation Inc., which assigns a Q rating, or recognition value, to all athletes, had already assigned Jordan the highest marks two years ago. According to Levitt, in the public's mind Jordan was more "lovable" than Walter Cronkite.
"Nobody else in team sports even comes close," said agent Leigh Steinberg, who represents some of the biggest names in professional football. "They've maximized his income without overexposing him."
It now appears there is no chance of overexposing Jordan. Even his video deal with CBS/Fox has become the industry standard, the NBA Entertainment-produced videos setting sales records from the start. Jordan, Wayne Gretzky and Bo Jackson are now featured in an NBC cartoon called "Prostars." Jordan hosted Saturday Night Live's season opener this fall, and requests for his time continue to pour in.
If all that's not enough, Jordan firmly believes he can make a serious run at the PGA Tour when his basketball playing days are over. But not before he adds another $10 million or $20 million to the coffer with a two-year stop to play basketball in Europe.
According to Falk and others, if Jordan becomes good enough at golf to just make a few tournament cuts, the endorsement money could keep flowing forever. Many don't give him much of a chance at big time golf--former NFL star and current Senior Tour member John Brodie chided Jordan for even thinking about the Tour. Yet Jordan believes it's possible.
"If I put my mind to it, I've always believed I could do anything I want," said Jordan. "You have to expect things of yourself before you can do them.
"After basketball, I want to be a professional golfer. I want to play in the NBA five more years, that will be 12. At that point I think I'll still be able to do things I'm doing now. But then I'll start going down, and I can't play when I start to go down. I'll be done when I'm 33. Then I want to play a couple of years in Europe. And then I want to start my golf challenge.
"I should be 35 then. That's about when Calvin Peete started."
And for Michael Jordan, that's no time to stop.
This article originally appeared in the December 1991 issue of Hoop. Mark Vancil has covered the Bulls for the Chicago Sun-Times and the NBA for The National.
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