Saturday, October 19, 2019

How did Michael Jordan become a millionaire

Throughout his 15 year career as basketball player, Michael Jordan made about $90 million in salary from the NBA. Today, Jordan’s worth $1.9 billion, more than 20 times his total NBA career earnings. (The $1.9 billion is Forbes’ estimate, I actually think Jordan’s worth a bit more, likely in the mid $2 Billion, possibly close to $3 billion) How Michael Jordan Will Make $145 Million In 2019. Also, considering a good chunk of his NBA salary was likely lost in taxes, it’s safe to say Jordan’s basketball earnings are pretty much a non factor to the wealth he’s amassed today.
The bulk of Jordan’s wealth comes from primarily from two sources:
  1. His ownership stake/royalties in Nike/Jordan Brand
  2. His Stake in the Charlotte Hornets basketball team.
If you think Michael Jordan was actively trying to become a billionaire, he wasn’t… Really, all it boils down to is that he made two very great financial decisions that happened to pay off for him. When Jordan first signed with Nike back in 1984, he was only netting about $500k per year annually from the deal. But what was different from Jordan’s Nike deal from other sneaker deals athletes had signed was that Jordan’s shoe deal established a partnership with Nike where he would collect a percentage of the profits on his shoes that were sold, it wasn’t a one time sponsorship like it had been with previous athletes and other companies. Nike wasn’t the marquee name it was today in the 1980’s. When they signed Jordan, he alone carried the popularity of the brand to become a household favorite. Last year, Jordan raked in $130 million from Nike. Michael Jordan remains the GOAT of the sneaker game. When calculating the worth of Jordan’s stake just on profit, his stake is easily worth $520 million. This year, Jordan Brand also signed Zion Williamson for an endorsement deal, if Zion lives up to the potential hype of the NBA’s next greatest player, that’ll mean even more money in Jordan’s pocket.
When it comes to the Hornets, I’m fairly certain Jordan was more excited about becoming an owner of an NBA team, in his home state of North Carolina than the potential growth the franchise actually had. When Jordan bought the Hornets he spent about $175 million acquiring the franchise, today the team is worth an estimated $1.3 Billion. Michael Jordan Sells Minority Interest In Hornets, And His Return Is Even Better Than Reports Suggest.
But after those two moves, Jordan didn’t actively do anything to increase his wealth. When basketball increased in popularity as a sport, so too did the Hornets become more popular and profitable, likewise with Nike/Jordan Brand. As the premier sports apparel and basketball brand, Nike’s profits increased along with the popularity of the sport, and as a result so too did Jordan’s profits grow.

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