Renowned NBA icon Michael Jordan has achieved yet another remarkable historic milestone by becoming the inaugural athlete to enter into the esteemed assembly of ultra-wealthy Americans, as revealed in the October publication of ‘The Forbes 400: The Definitive Ranking of The Wealthiest Americans In 2023‘, a highly regarded business magazine in the United States.
Ever since Michael Jordan debuted on an NBA court in 1984, he has gradually built a formidable business empire on and off the court. Throughout his 15 seasons in the NBA, he amassed $94 million and was the highest-paid player in 1997 and 1998. However, his off-court endeavors are what truly sets him apart from all other athletes, as he reportedly earned an estimated $2.4 billion (pre-tax) through partnerships and endorsements with renowned brands such as McDonald’s, Gatorade, Hanes, and, most notably, Nike. Interestingly, his most recent annual royalty payment from Nike alone amounted to a staggering $260 million.
The Hallmark of his business exploits came in August when he divested his controlling interest in the Charlotte Hornets at an astonishing valuation of $3 billion. Consequently, the NBA’s 27th most valuable franchise was sold for the second-highest price, representing a nearly 17-fold increase in value since Jordan assumed ownership in 2010. This transaction occurred merely a few months before Forbes’ recent evaluation of the Charlotte Hornets at $1.7 billion in October.
This recent billion-dollar transaction elevates him to an exclusive position of multi-billionaires above his contemporaries, with a net worth of $3 billion, marking his debut on The Forbes 400 and the inaugural inclusion of a professional athlete among America’s most affluent individuals.
Billionaire status remains an exceptional accomplishment and an infrequent occurrence for a professional sportsperson, with only three succeeding so far – firstly Michael Jordan in 2014, then LeBron James and Tiger Woods. Nevertheless, as sports salaries continue to soar and off-the-field prospects expand, more athletes will probably join the exclusive realm of billionaires.
In reference to the exceptional ‘three-shots’ of Micheal Jordan as a player, an owner, as well as the expansion of the Air Jordan brand at Nike, Ted Leonsis, the proprietor of the Washington Wizards, Mystics, and Capitals, who has previously collaborated with Jordan on various investments and sports ownership, expressed the following sentiment:
“Michael’s one of the few people that have had success three times,” he said. “A lot of entrepreneurs, they make it once. They have a big win, take their winnings, retire and [we] never hear from them again, or they try something a second time and it doesn’t work. He’s had three mega successes,” he added.
Other Off-Court Business Deals
Throughout the years, Jordan has engaged in various business ventures, encompassing car dealerships, restaurants, a distinguished tequila brand, and, more recently, equity investments. Notably, he has invested in CLEAR, Mythical Games, and Dapper Labs, among others. Additionally, he acquired stakes in DraftKings and Sportradar, both facilitated by Leonsis. He co-founded the esteemed Cup Series team, 23XI Racing, alongside the accomplished driver of Joe Gibbs Racing, Denny Hamlin, in 2020.
How His Business Fortune Began
Upon the release of the inaugural Air Jordan sneaker towards the conclusion of his rookie season in 1985, Nike purportedly anticipated generating $3 million in merchandise sales. However, a study conducted by Temple University in 2023 revealed that the brand had amassed $70 million in sales a mere two months later and $100 million by year-end. Jordan had initially inked a five-year contract, entailing an annual salary of $500,000 in addition to royalties. More so, in its most recent annual report, Nike disclosed a wholesale revenue of $6.6 billion for the Jordan Brand, representing a 28.6% increase from the preceding year.
Following his second retirement from the NBA in 1998, Michael Jordan promptly departed from his previous role as a prominent figure endorsing various products to owning sports franchsie. As reported by ESPN, he made unsuccessful endeavors to acquire ownership of the Hornets and the Milwaukee Bucks. Eventually, Jordan aligned himself with an ownership consortium led by Ted Leonsis, which successfully procured the NHL’s Washington Capitals and obtained a 44% stake in the Washington Wizards. Subsequently, he assumed the esteemed position of president of basketball operations under the then-majority ownership of Abe Pollin.
However, his return to the court for two seasons necessitated the relinquishment of his ownership share. Upon his ultimate retirement in 2003, he promptly acquired another team. In 2006, Jordan procured a minority stake in the Charlotte Bobcats, and subsequently, after four years, he became the NBA’s inaugural player-turned-majority-owner. This transition was facilitated by a predominantly debt-financed transaction, which appraised the franchise at $175 million, a significant decrease from the initial $300 million BET founder Robert L. Johnson had disbursed for the expansion team in 2003.
However, despite his highly competitive nature and notable achievements on the court, Michael Jordan’s success did not translate to the Hornets, as the team suffered three first-round losses in the NBA playoffs over the past 13 years. Nevertheless, this did not deter Jordan from capitalizing on the rapidly appreciating value of sports franchises. In 2019, he sold a 20% stake in the Charlotte Hornets to Gabe Plotkin, founder of Melvin Capital, and Daniel Sundheim, founder of D1 Capital Partners, at a valuation of $1.5 billion. Subsequently, Jordan relinquished majority control to Plotkin and hedge fund founder Rick Schnall in August, resulting in the sale of the team double the original price. This sale ranks as the second highest in NBA history, trailing only the Phoenix Suns, which were purchased by United Wholesale Mortgage CEO Mat Ishbia for a valuation of $4 billion earlier this year.
However, Michael Jordan maintains a minor ownership interest in the Hornets, ensuring his continued involvement in the sports as he explores potential opportunities for his forthcoming entrepreneurial endeavor.