Michael Jordan has a reputation unlike any other. Whether you are talking about how incredible he was on the basketball court or talking about his competitiveness or even mentioning his excellent entrepreneur skills, he stands out above the rest. Jordan has made a number of great business decisions over his years including picking a shoe company that really fit him and his desires as he was just entering the NBA. That happened to bea then small company called Nike.
Does Michael Jordan Own Nike? Jordan has royalties with Nike but he doesn’t own Nike as a company. Nike didn’t fully hand over the keys to Jordan when he signed his Rookie shoe contract. Instead offered a strong partnership that has grown over the years, spawning Jordan Brand. Maybe one day he could move into an ownership position on Nike but he doesn’t currently have one.
If Jordan isn’t an official owner of Nike, then what does he own with the company and how does he make so much money with them?
Who does own Nike then?
Nike, Inc is a publicly traded company that has two classes of shares.
Class A are not available on the open market. These hold a 1 for 1 value with class B shares.
Class B shares are available to all investors through the usual stock management processes.
This is important because holders of Class A shares can elect 9 of the 12 board seats. Class B shareholders elect the other 3.
The co-founder of Nike, Phil Knight, and his son Travis Knight, along with the holding companies and trusts they control, own more than 97% of outstanding Class A shares and therefore are the effective top level decision makers at Nike.
The top shareholders of Nike are Phil Knight, Mark Parker, Andrew Campion, Swoosh LLC, Vanguard Group Inc., and BlackRock Inc.
How Jordan Got Started With Nike
What’s funny is that this decision from Nike to grab Michael Jordan seems like an easy one to make right about now. However, back then, they weren’t 100 percent sold on him at all. In fact, some members of Nike didn’t even care too much about him and were instead looking for guys like Hakeem Olajuwon. There were a few backers in the company though that insisted they sign Jordan however they can. Those non-believers caved and Nike offered a five-year, $500,000 deal to entice Jordan to come aboard their operation. It should also be noted that at this moment in time, Nike was really struggling to sell their running shoes. They were hoping that notching a top star in the professional sports world could help them boost their ratings. The only problem was that Jordan didn’t even want to work with them initially. His main goal at the time was partnering up with another brand, Adidas. Adidas was undergoing a leadership change at the time Jordan was really looking around but he seemed set on going there. He was so solidified in his decision that he was planning on blowing off the meeting with Nike and simply rolling with Adidas anyways. That was until his mother stepped in and forced him to at least hear what Nike had to say. Sure enough, Jordan walked out of that building shocked at what he was offered. Jordan waited a little bit longer to see what else he could get from other companies and compare them together. Converse offered him a deal but was apparently nowhere near the offer that Nike coughed up at the time. Jordan then showed the offer to Adidas and told them to come “anywhere close” to that number on the table. The two sides tried to work out a deal but again, it just didn’t come together. Jordan was that close to siding with another shoe company, but in the end, he went with Nike.
Jordan’s Shoes Took Off
Before it was actually labeled as the Jordan Brand, the superstar and Nike created their first pair of shoes together for him to wear on the court. They were called Air Jordan I. Within the first month of their initial release in stores, they sold about $70 million worth of shoes. By the end of the year, they made $100 million off of just that one pair. As you could probably expect, Nike knew that they couldn’t just stop creating Jordan shoes. This was when the two sides started to create something called the Jordan Brand. The Jordan Brand sold everything from shoes to clothing and even accessories like backpacks. Due to everybody knowing that Michael Jordan endorsed it and helped in the creation of these products, everybody wanted to get their hands on them straight away. When you have a player that everybody loves, who is playing like the greatest athlete in history up to that point, it is relatively easy to promote and sell products under that brand. In fact, there were people out there that didn’t even know about Nike. They simply saw something under the Jordan Brand and wanted to support him. That is how you know he was a huge deal back then and still is to this day.
Present Day Partnership
The Jordan Brand took a slight dip through the years 2010 to 2018. Obviously, there were a lot of new players really taking the stage and promoting shoes of their own which took revenue away from the Jordan Brand. Though by no means was this brand falling off a cliff. They were still making substantial revenue, just slightly less than before. Players like LeBron James and Steph Curry in particular are two of the stars to blame for this small decline. However, right after that stretch ended, Jordan Brand started to fly back up the rankings. Some people have started to compare the comeback to Michael Jordan himself when he came back into the NBA after a brief MLB stint with the Chicago White Sox. These shoes continue to be some of the highest selling that we have ever seen all of these years after despite dipping a little bit. He is also still locked into a deal with Nike and has been paid an estimated $1.3 billion from the company since signing the deal back in 1984 according to Forbes. The relationship between Jordan and Nike seems to be good as usual at this point in time. It’s incredibly hard to imagine a souring partnership after all of this time. Especially considering the incredible success that they have had up to this point and even the continuing revenue that is being brought in by them. I would expect to see new Jordan gear coming out for quite a long time now. Maybe we can even hear about a brand-new deal between Jordan and Nike in the coming years to lock in even further.