Annual dividend of more than 100 million, life partner, Jordan and Nike cooperation story is legendary

Jordan started Nike in 1984, won a lifetime contract and shares in 1988, and became a life partner of AJ in 2003. Until now, the profits of "AJ" alone reach more than one billion dollars every year. (In fact, the 2021 dividend will be $160 million.)

Looking back, Nike re-signed Jordan for an astronomical price that year, almost like an eye in the sky operation.

In 2020, the world's famous sports brand "air jordan" announced its annual financial statement, among which its sales reached 3.13 billion dollars; As a permanent partner of the brand, the famous NBA star Michael. Jordan, earned a $130 million dividend.

What is the relationship between air jordan and Jordan? Why does Jordan get such a big bonus every year? How did Nike find Jordan? We'll find out today.

Nike signed Jordan at an "unreasonably high" price, creating a legend of endorsement cooperation

In 1984, the University of North Carolina player Jordan entered the NBA draft, was selected by the Chicago Bulls with the third overall pick.

Objectively speaking, Jordan was strong enough at that time, but at that time, the concept of "whoever wins the center wins the world" was deeply rooted in the hearts of the people, and the No.1 draft was mostly tall post players.

When sports brands choose young spokesmen, big players must be the first choice, especially those with high drafts, for the first sight or more lucrative endorsement contracts.

However, at that time, Nike was still at a low level in the American sports brand market, and almost all NBA stars were recruited by Converse and Adidas, so Nike searched for a circle and found that the top draft insider like Hakeem Olajuwon had already been won, and finally chose Jordan as the second choice.

In fact, Jordan didn't want to talk to Nike at first, but wanted to join the Adidas family, but Adidas didn't like Jordan, or the endorsement deal was too low, so Jordan finally chose to talk to Nike.

We're not sure exactly how the conversation went down, but in the end there was this news in NBA circles that left everyone dumbfounded: "Nike signed rookie Michael to a five-year, $2.5 million endorsement deal. Jordan ".

Why do you say dumbfounded? It was because the contract amount was so high that it could be described as sky-high, especially since he was a rookie and had never played a single NBA game.

In the NBA at that time, endorsement deals with Adidas and Converse were as high as $100,000 a year for the top stars, and that was with the honor and strength of the big players.

A little-known small company, how dare to use such a price to sign a rookie player, this became a matter that everyone did not understand.

As time went on and details of the endorsement deal between Nike and Jordan came to light, it became clear that the $2.5 million was not easy to get, or even impossible to complete.

In the sneaker endorsement contract signed by both sides, Nike Jordan has the following requirements:

1. Must win the rookie of the Year award and be an All-Star in three years

2. The average score per game must exceed 20+ within three years

3. Sales of sneakers must not be less than $4 million within three years

Note: If the above conditions are not completed, the fourth and fifth years of the contract will not be executed

To put it bluntly, Nike was pushing Jordan to become a star with money, and betting that Jordan would become a star in three years. On the other hand, if Jordan failed, the $1.5 million over three years would have been an unacceptable loss for Nike at the time, so it's hard to imagine what kind of confidence Jordan gave Nike executives in their talks to make such a crazy "do or die" decision.

As for the rest of the story, I think you know all too well.

Nike made the right bet, and it's hard to even describe the correctness of signing Jordan with a "bet." In his first season, Jordan won the Rookie of the Year with 28.2 points, 6.5 rebounds, 5.9 assists and 2.4 steals per game, and became the Eastern Conference All-Star starter.

As for the "$4 million in sales over three years" requirement, Nike surpassed $70 million in sales...... in Jordan's third month in the NBA

Later on, Jordan became the greatest NBA star in history, even the greatest athlete in the history of sports; And the once in the United States, Nike, also follow Jordan's great influence, gradually become the world's largest sports goods company, or even one of the. (Nike's latest market value is around $160 billion, far more than any other company of its kind.)

Even now, when we look at the combination of Nike and Jordan, it's incredible. It's unbelievable.

Nike then this as open the eye of the sky ahead, bold, even unspeakable operation, really amazing!

The "AJ" brand was established, and Jordan exchanged the Nike stock for AJ's profit sharing

Jordan's ability to carry goods was so strong that Nike began negotiating with Jordan for further endorsement deals even before his first shoe contract expired.

The first deal was a big deal, and Nike offered Jordan a second deal that was just as generous, including a lifetime deal and 4.5% of the company.

Fans who are familiar with Jordan know that Jordan is not only good at playing basketball, but also very interested in business management due to his great personal charm and aura. He wants to be a big player both on and off the court.

Therefore, after his retirement, Jordan thought of buying the team and becoming his own boss, while actively participating in the operation of Nike. 4.5% of the equity also gave him enough voice. (Remember that 4.5% of a personal stake in a company as big as Nike is so much that it can influence some decisions.)

In 2003, Nike and Jordan's team negotiated a contract to transfer shares of the company, considering the long-term development of the company and avoiding instability.

Nike will separate air jordan as a separate brand, and Jordan's 4.5% shares will be converted into a partnership interest that will enjoy 66.6% of the annual lifetime profits of the "AJ brand" in the future.

I don't know exactly what level air jordan was in the sports circle 20 years ago, but today 20 years later, even in China on the other side of the ocean, the popularity of this brand has exploded, even to the level of "rotten street".

Since 2018, the annual market sales of air jordan have been no less than 2 billion dollars, and in 2020, it will exceed 3 billion dollars.

With more and more stars signed by air jordan, it is believed that the annual sales of the brand will only be higher and higher, and it is possible to break 10 billion dollars. (Remember the new generation of NBA face players like Doncic, Tatum, Zion. Players like Williams are spokesmen for AJ)

So while air jordan's annual sales continued to rise, Jordan, with a 66.6% profit sharing agreement, earned more and more. In 2018, the dividend exceeded 100 million dollars, and in 2021, it reached 160 million dollars. It is estimated that in another three or four years, Joe's annual dividend from air jordan will start at 200 million dollars.

conclusion

The relationship between Nike and Michael Jordan is one of the most legendary business partnerships in sports history.

One gave a very sincere sky-high contract, one with the strength to prove their worth of sky-high prices, and finally hand in hand at the top of the list of small mountains.

So for Nike, for air jordan, to give Jordan a dividend of more than a billion dollars a year, it is really worth!