Hoops icon Michael Jordan qualified for Forbes’ annual billionaires list for the first time this year with a net worth of $1 billion thanks to soaring NBA franchise values. The Charlotte Hornets are Jordan’s biggest asset, with his stake worth more than $500 million net of debt. But the team has largely been a money loser in terms of cash flow in recent years. The NBA’s greatest player can afford it though, as he continues to make a mint annually outside of the Hornets.
Jordan earned $100 million from Nike and other partners last year by Forbes’ count, more than any other retired or current athlete. His 2014 haul is also more than the $94 million Jordan made in cumulative playing salary during 15 years lacing up his hightops for the Chicago Bulls and Washington Wizards.
Nike’s Jordan Brand is a financial juggernaut. Jordan U.S. shoe sales rose 17% last year to $2.6 billion, according to data compiled by SportScanInfo. Jordan has nearly 10 times the sales of the signature shoes for the top active NBA star, LeBron James. Jordan apparel and the international business add more than $1 billion as well. The Jordan Brand commanded 58% market share of the $4.2 billion U.S. basketball shoe market last year, up from 54% in 2013. The Swoosh’s share jumps to 95.5% if you include Nike Basketball. The competition: Adidas (2.6% share), Under Armour UA +2.01% (1%) and Reebok (0.8%).
“Nike has done an unbelievable job evolving the Jordan Brand from pure basketball to a more lifestyle brand,” says Eric Tracy, an analyst who tracks Nike at Janney Capital Markets. “That inherently pulls in a much larger target market.” Tracy also points to Nike’s ability to exploit the sneakerhead phenomenon, which is second to none. They are constantly refreshing the Jordan retro line, which represents about 50% of the Jordan shoe business. Nike leaves a little money on the table by never producing enough to meet demand, but this always leaves Jordan fans wanting more.
Take the launch of the retro Air Jordan XI “Legend Blue” on Dec. 20. It sold out on Nike’s website in three hours. Other retailers also quickly emptied their supply. At an average price of $180, according to SportScanInfo, Nike sold more than $80 million of the “Legend Blue” within its first week with most of the sales on the first day. This is one style over one week. For perspective, Adidas, Under Armour, Reebok and every other non-Nike/Jordan brand sold a cumulative total of $190 million for all its styles over the 52 weeks of 2014. That is the power of Jordan.
Nike kicked off its 30th anniversary celebration of the Jordan Brand at the All-Star game in New York this year. It included a Michael Jordan-themed interactive experience in Manhattan and a pop-up store in Brooklyn. The Jordan Brand has a host of roughly 30 current NBA players under contract, who showcase the product on the court, including All-Stars Carmelo Anthony, Chris Paul, Blake Griffin and Russell Westbrook. Jordan endorsers outside basketball include Derek Jeter, Nascar’s Denny Hamlin, NFL’s Dez Bryant and boxer Andre Ward. No one sells like MJ though.
Read more at Forbes.