The Best One Yet
The Best Idea Yet 🏀 Air Jordans: How MJ's Mom Made the Deal of the Century
Mon, 30 Dec 2024
Subscribe to The Best Idea Yet here: https://wondery.com/links/the-best-idea-yet/Episodes drop every Tuesday, free to listen to wherever you get your pods.It’s simply the most popular sneaker in history. With $7B in annual sales today, Nike and Michael Jordan’s shoe deal changed sports, fashion and marketing forever - But it never would’ve happened without skilled negotiating by MJ’s Mom. Originally banned by the NBA, Air Jordans have sold hundreds of millions of pairs, made Michael Jordan worth almost $2 billion (that’s why he always has a cigar), and saved the entire Nike company. Find out how Nike rewrote the rules on celebrity endorsements, why salaries are stable but equity is exciting… and why Air Jordans is the best idea yet.Subscribe to The Best Idea Yet for the untold origin stories of the products you’re obsessed with, and the bold risk takers who brought them to life. https://wondery.com/links/the-best-idea-yet/—-----------------------------------------------------GET ON THE POD: Submit a shoutout or fact: https://tboypod.com/shoutouts FOR MORE NICK & JACK: Newsletter: https://tboypod.com/newsletter Connect with Nick: https://www.linkedin.com/in/nicolas-martell/ Connect with Jack: https://www.linkedin.com/in/jack-crivici-kramer/ SOCIALS:Instagram: https://www.instagram.com/tboypod TikTok: https://www.tiktok.com/@tboypodYouTube: https://www.youtube.com/@tboypod Anything else: https://tboypod.com/ See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.
Chapter 1: What is the story behind Air Jordans?
Yet is Nick and Jack here with you. Today, we're serving up an episode of The Best Idea Yet. Our weekly deep dive series where we cover the incredible stories behind the most viral products of all time. Right now, we're still on vacation, but our feed is not. So here's what we got for you. Sit back and enjoy the wild story of Air Jordan.
It's Nike's biggest bet they ever took that paid off more than anyone could have imagined. Then after this episode, because we think you'll love this episode, go subscribe to The Best Idea Yet wherever you get your podcasts. You can search for it in whatever podcast app you're using right now. We also put a link in the episode description to make it easy for you.
So Jack, let's hit Nike Air Jordans, the best idea yet. As a child, I actually whipped up a will for myself. Legally binding? Well, Tuck's getting my M&Ms. Dude, this is 11-year-old me. Yeah, this is impressive. I'm not sure I got a notary. So I had like seven assets, a few baseball cards, a blankie. Classics. But my most cherished asset was my Mariano Rivera baseball glove.
Oh, well, that's an institution, Jack. I mean, you could retire on that. It was the mitt Mariano wore on the mound for all those World Series in the 90s. And I know why you bought that mitt, Jack. And it wasn't for the smell, and it wasn't for the fit, was it? It's because it was Mariano's glove. Yeah.
And I saw him on TV using the same mitt that I had, and that just made me feel like a million bucks. Jack, that is exactly why I bought Marc Messier's ice hockey helmet when I was six. It's why I drank Coca-Cola after a Wayne Gretzky ad, and I'm pretty sure that's why I enjoyed Ritz crackers when I saw some New York giant in a commercial.
Nick, my Mariano glove and your Mark Messier helmet, those were 90s products, but neither would have existed without the shoe that broke the mold from a decade earlier, the original 1985 Air Jordans. The phenomenon that is Air Jordan transformed the sports apparel industry in so many ways that we take for granted today. I mean, marketing, celebrity endorsements, team branded merchandise.
It has all been affected by the groundbreaking deal at the heart of today's story. Yo, Mike, what makes you the best player in the universe? Money's gotta be the shoes. Since their initial release, there have been 39 editions of Air Jordan sneakers, plus re-releases of retro classics from the line.
In fact, get this, an incredible 25% of sneaker owners in the United States own a pair of Air Jordans. The Jordan brand revenue for 2023 was $7 billion, and it was the strongest performer in all of Nike's brand portfolio. I mean, not too shabby for a Sprinkle on a little more context for us, please. That makes Air Jordan bigger than Ralph Lauren, Hyatt Hotels, or Mattel.
And get this, Air Jordan sales are, and I hate to say this because I wore them just the other day to our podcast studio, 28 times bigger than all birds. The Air Jordan name was created to win Nike a place in the hearts, the minds, and the shoe racks of basketball fans. Success would be an understatement. In the 2022-2023 basketball season, 65% of NBA players wore Nike.
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Chapter 2: Why was Nike's initial investment in Michael Jordan risky?
Symbols, more and more, of what real people can't do anymore. Risk and win. So Strasser, he backs Sonny all the way. He thinks now is the time. MJ's profile is on the rise, and he just helped the US team win gold at the Olympics in Los Angeles. And Strasser also knows from his network that Jordan is already in talks with Adidas and Converse.
So with Strasser back in the plan, it looks like it's a go. But Sonny has one more bomb to drop. He wants to make Michael a special shoe just for him. Now, yeah, as we should point out, signature shoes, they weren't entirely a new idea in 1984. Like, they'd been around since the 1950s.
But there was a big expense around designing a new shoe and then building and then promoting that entire new shoe product. And to do all of that for a 21-year-old who hadn't scored any NBA points yet? That sucks. was unprecedented. So to make this kind of move work, you really have to do the unexpected, the unprecedented, the unbelievable.
And that's what Sonny Vaccaro was pushing for by building a shoe around Michael Jordan. And Phil Knight, he sold on the idea. Two and a half million? Sign that check. But there was just one more person left to convince, and that person was Michael Jordan.
Every big moment starts with a big dream. But what happens when that big dream turns out to be a big flop? From Wondery and At Will Media, I'm Misha Brown, and this is The Big Flop. Every week, comedians join me to chronicle the biggest flubs, fails, and blunders of all time, like Quibi. It's kind of like when you give yourself your own nickname and you try to, like, get other people to do it.
and the 2019 movie adaptation of Cats. Like, if I'm watching the dancing and I'm noticing the feet aren't touching the ground, there's something wrong with the movie. Find out what happens when massive hype turns into major fiasco. Enjoy The Big Flop on the Wondery app or wherever you get your podcasts. You can listen to The Big Flop early and ad-free on Wondery+.
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40,000 feet above the Rockies, Michael Jordan shifts his six-foot, six-inch frame side to side, just trying to get comfortable. He's squashed into like one of those plush beige seats of a private jet. And across from him is his mom, Dolores, and his dad, James. Up front next to the pilot, that's his agent, David Falk. And all of them together are en route to lovely Portland, Oregon.
Now, MJ, he glances across at his mom and she looks back at him. She holds up her hand and she uses her outstretched finger to paint an oversized smile across her face. And the message is clear. Mikey, cheer up. Jordan rolls his eyes and he turns like, look out the window again. But he can't help smiling at his mom's goofy little mind. He only got on the plane because of her in the first place.
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Chapter 3: How did Dolores Jordan influence Michael's deal with Nike?
We took a risk together and the company we took equity from eventually IPO'd. And the rest is history. Salaries are stable, but equity is exciting. And Eric, what's your takeaway? So my takeaway for the Air Jordans, Jack, is that the best advice for companies with multiple brands is to be cousins, not siblings. Yes. Look, we saw the dangers early on in the Air Jordan story.
When you have brands that operate in the same space under one roof, it is all too easy for one of those brands to eat the other one's lunch. Nike learned from this mistake by making the Air Jordan brand more standalone with its own logo and more recently, its own stores. Abercrombie is another example of this. It also owns the Hollister brand.
And Abercrombie has found that right balance of being similar enough to be related but differentiated enough to not be duplicative. When it comes to multiple brands, it's best for them to be cousins, not siblings. Oh, Jack, one more takeaway I just thought of. You should always have your mom in your salary negotiations. There's no better representative. Okay. What's the next part of the show?
Oh, well, Jack, it's actually our favorite part of the show. The best facts yet. All the best tidbits and factoids we couldn't fit into the story, but we couldn't leave you without. Lace them up. What do we got, man? In July 2003, Nike paid around $305 million to acquire Converse. Oh! Larry Bird and Magic Johnson's old shoe company. They put an end to the rivalry once and for all.
If you can't beat them, well, actually they did beat them, but then they bought them. In 1997, Nike started selling Air Jordans in China. And soon after, a poll ranked MJ as the second most famous American in China behind Thomas Edison. Which actually, I don't know what I'm more impressed by. Thomas Edison being number one or Michael Jordan being number two.
By 2021, the greater China region represents almost 20% of Nike's global sales. All right, Jack, we got a fact on Nike's deals and a fact on Nike abroad. What about Nike in the secondary market? The most expensive sneaker auction sale ever was $8 million. $32,800 in February 2024 for six unpaired individual Air Jordan sneakers. It's known as the Dynasty Collection.
Ha ha ha ha ha ha!
And that is why Nike's Air Jordans is the best idea yet. Coming up on the next episode of The Best Idea Yet, we introduce you to a shadowy figure called the Pez Outlaw. That's right. We're bringing you the sweet story of the Pez Dispenser. Yetis, Nick and Jack here back with you in the studio. That was our episode on Air Jordans. Nike's Air Jordans.
And if you want to listen to more episodes of The Best Idea Yet, just subscribe or follow the show wherever you get your pods. We put a link in the episode description to make it easy for you. New episodes of this series, they drop every Tuesday, 45 minutes each, and they're on the products you're obsessed with. We did one on Birkenstocks. We did it on the Happy Meal, Sriracha, Polaroid cameras.
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