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Nike’s profit margins in footwear have never been higher and the swoosh has Michael Jordan to thank.
The initial $500,000 per year investment in North Carolina’s native son was a gargantuan endorsement figure in 1984 dwarfing James Worthy’s previous record-high contract of $150,000 annually with New Balance. Nike was struggling to find its identity and needed a face. Michael was it.
It’s been a decade since Jordan last suited up for the Washington Wizards, but his signature sneakers still out-sell every other athlete on the market, both globally and domestic. Nike owes No. 23 an estimated $60 million annually in royalties through Jordan Brand, the apparel giant’s money-printing side hustle. Even Nike-sponsored standouts LeBron James and Kevin Durant’s current signature models can’t compete with Jordan’s retro line of sneakers.
In 2012 alone, at the peak of LeBron’s success with Nike after Olympic gold, Jordan’s kicks outsold the King’s 6 to 1. Originally released in a black-red colorway in 1985, Jordan’s first retro was the ‘Air Jordan I’ in 1994 and it has since spawned countless re-creations and colorways of iconic models.
David Stern fined Nike for the initial Jordan I colorway because the shoe lacked white. The swoosh paid the fines with ease for exposure — a smart move from a marketing standpoint. Jordan’s black-red Is re-released in 2012 as the ‘Banned Is’ and sold out instantly. Nike designer Tinker Hatfield is the mastermind behind the most popular models including the ‘Air Jordan XI’, a patent leather shoe that features a carbon fiber shankplate for added stability. Several colors have been re-released since 2000 including the most popular ‘Concord’ edition in black-white-purple.
The retro craze kicked into high gear in recent years with nearly every numbered Jordan (Models 1-23) selling out on release day as the swoosh can now move thousands of pairs in mere hours both online and at retailers.
Nike’s profits from previously released models being brought back are through the roof and there’s no sign of Jordan’s shoe dominance ending. Jordan is the exclusive sponsor for 19 active NBA players including Chris Paul and Carmelo Anthony. Oklahoma City’s Russell Westbrook is Team Jordan’s newest member. Since Jordan’s debut on the court and in the urban fashion realm, wearing ‘Air Jordans’ has been as much of a status symbol as it has innovative for performance footwear.
Nike owns 95 percent of the current basketball shoe market with Jordan Brand taking up more than half of that.
Jordan Brand’s ‘Jumpman’ silhouette arose from Mike’s high-flying dunk contest expertise in the mid 1980s. Said to be Mike’s favorite model, the ‘Air Jordan III’ was the first sneaker to feature the newly-designed logo. Jordan won the 1988 dunk contest in the cement colorway of the IIIs, a model that was re-released and sold out instantly during All-Star Weekend 2013.
In addition to Jordan Brand’s stranglehold over the basketball footwear and apparel industry, the division of Nike also sponsors several NFL players including receivers Andre Johnson and Hakeem Nicks as well as a few in the MLB ranks most notably Derek Jeter.