Michael Jordan is known around the world as the Greatest Professional Basketball Player of All Time. He amassed 6 NBA World Championships during his storied career, and also played on the United States Olympic Basketball Team. He was on more than a dozen NBA All Star Teams and was named Most Valuable Player in both the regular NBA season and the NBA Finals.
All that hardware gave him a head start to building his current net worth of more than $1.65 billion, of which $350 million was added just last year. When you look at how Jordan built his fortune, you will find a specific strategy and focus that you can learn from and maybe apply in your own life.
First, Jordan focused on becoming great as a basketball player rather than focusing on the money. During his playing days for the Chicago Bulls, there was considerable controversy about whether or not management was paying him relative to his value to the organization. His final season with the Bulls paid him just under $34 million, but when you compare that to today’s NBA salaries it is mediocre. Over the course of his NBA career it is estimated he took in $90 million before taxes.
One reason he could literally afford to be patient is because early in his career he struck up a deal with Nike in what would become the world’s most in-demand brand of athletic shoes – the Air Jordans. Starting in 1984, Nike agreed to pay Jordan $500,000 in cash per year for the first seven years of the deal. He also picked up Nike stock options that would add $7 million to his total net worth. But that was only the beginning. Once the Air Jordan brand was released in 1985, sales would run up to more than $100 million a year. That $100 million figure was what Jordan netted in 2017 after total Nike Jordan brand sales of an estimated $3.1 billion.
But Jordan would not agree to endorse any offer. In general he has limited himself to a few select brands, including Wilson basketballs, Hanes underwear for men, Gatorade, and McDonald’s. As he has gotten older, he is even more select about how he markets his brand.
The third leg of his net worth triad is his ownership of the NBA Charlotte Hornets. Jordan is a native North Carolinian, and becoming an owner would provide a much needed boost to the team’s image as well as Jordan’s total net worth. That figure is $350 million – in a single year. The 2018 total value of the franchise is just over $1 billion. When he initially became an owner of the team he had to come up with $175 million of his own money to cover the team’s debts, but it is clear that was a shrewd investment given his current return on the money.
When you look at the three legs that are largely responsible for his fortune, you see they are all related to what he does best – play basketball. But it is not just about him being a great basketball player but his overall knowledge of the sport of basketball (college and professional). He made only a small part of that total net worth from playing the game. He took his experience and was an important part of the design of his shoes because he knew the demands of playing an 82 game regular schedule and the playoffs – one year after another.
And Jordan is also a very good businessman. Owning an NBA team can be a roll of the dice because you never know if the potential of a player will translate into wins on the court. The Charlotte franchise has not fared well as a winning team, yet the team’s value has skyrocketed over the last few years. The reason? Part of it is the team continues to improve, but another part of it is the NBA brand generates advertising revenue from television and other advertisers. If there is one thing Jordan knows about it is the value of a brand.
Expect Jordan to make another move that will continue to build his net worth. The triad has lost a leg as he has been retired for some time, so he may get involved with the sale of the Carolina Panthers either as an investor or part owner. Wherever he shows up on the sports radar, you can be sure the money is following him.