A Dollar For Dollar Breakdown Michael Jordan’s $2.2 Billion Net Worth
This Sunday is the premiere of “The Last Dance”, the documentary about Michael Jordan and the Chicago Bulls from 1997-1998. This season led to the sixth and final title in the team’s dominant race throughout the 1990s, one of the most important championships in the history of the league. Jordan was the face of this Bulls team, which included greats like Scottie Pippen, Dennis Rodman, Toni Kukoc, Steve Kerr and coach Phil Jackson. But Michael made relatively little money playing in the NBA. His total NBA career gains could be won by a single player in three or four seasons today.
In 2009, when we started tracking Michael’s fortune, he had a net worth of $ 500 million. According to our calculations, he reached billionaire status for the first time in 2014 at the age of 51. Fast forward six years and it has already more than doubled the net worth of that billion dollars.
And if you’ve read CelebrityNetWorth recently, you may have seen that we recently crowned it richest athlete in the world. A feat that most people mistakenly assume he achieved a long time ago.
So how did Jordan get so rich? Of course, we know this comes from the approval revenues of companies like Nike and Gatorade. But what goes into that figure of $ 2.2 billion. Let us come to the small figures. Here’s a dollar-for-dollar breakdown:
NBA salary = $ 93.7 million (about $ 145 million with inflation)
Perhaps the most amazing part of Jordan’s multi-billion dollar fortune is that it won almost all of that from the basketball court.
During his NBA career, Jordan made a total of just $ 93.7 million, which is downright meager by today’s standards. His rookie year earned him $ 550,000 and he played four seasons in the league before earning at least $ 1 million in one year.
In the Bulls’ first three titles (1991-1993), Jordan made a total of $ 9.75 million. He continued to earn money even during his first retirement, doing more than he had done for the first three times. Upon his return, Jordan has only won $ 3.85 million on the field yet, although he led the Bulls to a 72-10 record.
After the fourth championship, Jordan finally received a big salary. Over two-thirds of his career gains have come from his last two seasons with the Bulls, when he earned $ 30.14 million and $ 33.14 million respectively in the 1996-1997 and 1997-1998 seasons.
How much does Michael Jordan make a year with the Nike / Jordan brand? 80 to 100 million dollars.
Michael revealed that while playing college ball for the UNC, at one point, he only had $ 20 in his bank account. He had to ask his mom to send him postage stamps so he could stay in touch. Money would not be a problem for long.
In 1984, the same year he graduated from college, Jordan received an approval agreement from Nike worth $ 500,000 over five years. He also received stock options in the business, bringing his total compensation to $ 7 million over these five years.
Here’s the craziest thing: before this deal, Jordan had never worn a pair of Nikes in his life. He was an Adidas guy, but Nike’s offer was too good to pass up.
When Jordan wore the shoes, they violated the NBA uniform rules. Nike paid all the fines and actually used the controversy to generate additional excitement around the Air Jordans. In March 1985, consumers could buy the shoe, and they never did – in two months, it had sold more than a million pairs. In that first year, Air Jordan shoes brought in $ 100 million in revenue for Nike. Today, shoes generate more than $ 2.5 billion each year.
Jordan also has a good deal with his shoes. Since 1992, he has earned at least 25 cents for each Air Jordan sold. Today, he earns $ 4 every time an Air Jordan shoe is sold. It’s good enough to earn around $ 80 million to $ 100 million each year. In some years, Air Jordan sales bring in even more, bringing Jordan up to $ 120 million.
Other endorsements and businesses = $ 500 million
However, Nike isn’t the only endorsement agreement from Jordan. He has also had partnerships with Gatorade, McDonald’s Wheaties, Coca-Cola, Hanes, Chevrolet, Rayovac, MCI, Ball Park Franks, Upper Deck, 2K Sports and Five Star Fragrances.
Jordan’s deal with Gatorade is probably his most lucrative after Nike. After the 1988-1989 season ended, Jordan signed a ten-year, $ 18 million contract with Gatorade. This partnership brought the famous “Be Like Mike” commercial to the air and gave us a slap song to begin with.
In addition to his endorsements, Jordan also has a car dealership and seven restaurants. All of these business ventures earned him $ 1.6 billion.
In 2018 Michael and Magic Johnson invested in the famous esports organization Team Liquid. About a year after their investment, new investors invested money in the team worth $ 320 million. We do not know how important the stakes of Magic and Michael are.
In 2017, when Derek Jeter led a group of investors in the purchase of the Miami Marlins baseball team for $ 1.2 billion. Derek invited Jordan to invest and MJ now owns around 1% of the team.
How much does Michael Jordan earn in 2020? $ 120-150 million.
Of course, this does not include the agreements that Jordan has refused. He would only accept a partnership if he expected to earn at least $ 10 million, and even then money is not always everything. Jordan said no to an $ 80 million headset approval agreement because he doesn’t like wearing headphones.
Total endorsement revenue = $ 1.6 billion (and cash)
Bobcats investment = $ 1 billion +
Towards the end of his playing career (after two retirements when he joined the Washington Wizards), Jordan divorced his wife Juanita in 2002. The cost of the divorce cost Jordan $ 168 million. It is one of the biggest celebrity divorce settlements in history.
In 2006, Jordan was worth about $ 450 million, after taxes, divorce settlements, living expenses and other expenses.
That same year, he bought a minority stake in the Charlotte Bobcats. In 2010, he spent $ 175 million to buy a larger stake from the team’s majority owner, BET founder Robert Johnson. This agreement allowed Jordan to own 80% of the team.
But Jordan continued to increase its stake, dropping its stake from 80 to 89.5% in 2014. Let’s do a little math here. At the time, the franchise, now renamed Hornets, was valued at $ 500 million with debt of $ 135 million. A little later, the Clippers, also valued at $ 500 million, sold for $ 2 billion. Assuming the Hornets increased their valuation to $ 600 million during this period, Jordan’s participation in the post-debt team was worth $ 416 million. Combined with his $ 600 million in external money, that made him billionaire for the first time in his life.
Last year, Jordan sold a minority stake in the Bobcats to hedge fund managers Gabe Plotkin and Daniel Sundheim. The percentage was not disclosed, but the assessment was. New investors bought a team valuation of $ 1.5 billion.
As the value of NBA franchises continues to increase, Jordan’s net worth will also increase.
Jordan Brand Future Value = $ 2-3 billion?
Using either the present value of cash flow or Multiple EBITDA, the present value of Michael’s future Nike royalties alone could be worth several billion dollars in present value. In other words – how much would an outside investor pay Michael today for the next 10 to 15 years of his Nike royalties? To take it out of business today, it would probably be worth over a billion dollars. Then you also have the terminal value of the Jordan brand after that 10 to 15 year period. It could be argued that Michael’s Air Jordan royalty stream + the future value of the Jordan brand would be worth it if someone gave him a $ 2-3 billion buyout today.
When you add up, by our very conservative calculations, Michael Jordan’s current net worth in April 2020 is $ 2.2 billion. Quite easily to make him the richest athlete in the world. Is he also the greatest athlete of all time? Maybe that will be answered in “The Last Dance”.
“The Last Dance” airs its first two episodes on ESPN at 8 p.m. ET; viewers outside the U.S. can also stream it on Netflix.