How Michael Jordan Amassed a $2 Billion Fortune

In becoming the world’s richest athlete with an estimated fortune topping $2 billion, basketball legend Michael Jordan has set an incredibly high bar for future athletes. Not because of his earnings while playing but because of the tremendous wealth, he's accrued decades after retirement.

Interest in Jordan was heightened by the compelling The Last Dance, a 10-part documentary series on Netflix that most of us binge-watched during the lockdown. It was fitting that Jordan, who has made a career of defying expectations, made a cool $300 million during lockdown, while most billionaires were watching their fortunes dwindle. This is due to two reasons — the increased value of the Charlotte Hornets, the NBA franchise of which he is a 70% owner (worth $940 million), and the $145 million in earnings he made from Nike as part of his Air Jordan brand.

Jordan did well financially during 13 seasons with the Chicago Bulls, earning a sizable $94 million. However, it was after he hung his hi-tops up for the last time that his earnings sky-rocketed. After retiring in 2001 with the Washington Wizards Jordan got busy lining up a slew of lucrative sponsorship deals. His Nike Air Jordan brand, which began during his playing days, is the king and most enduring of his sponsorship deals. However, he has also been a pitchman for Coca-Cola, McDonald’s Wheaties, Chevrolet, Hanes, Gatorade, Upper Deck, and many others.

Charlotte Hornets

In becoming the majority owner of the Charlotte Hornets, Jordan broke the mold for what professional athletes could achieve post-retirement. The legendary basketball player first became an investor in the team in 2006 before buying out the owner in 2010. In the process, Jordan became the world’s first billionaire athlete.

His status within the game earned him instant credibility as an owner and allowed him to weather some rough seasons when he first took over. The team slowly improved, reaching the play-offs in 2014 and 2016 but were beaten by the Miami Heat on both occasions. However, as the team improved, so did its value. Jordan’s example has changed the landscape of sports ownership.  Although many sports stars now have an ownership stake in sports franchises such as Magic Johnson, Serena Williams, Shaquille O’Neal, and LeBron James, none have matched the success of Jordan with the Hornets

Air Jordan

It's now common for athletes and even non-athletes such as Kanye West and Beyoncé to have “brand within a brand” deals at major sportswear companies. But when Air Jordan debuted that was not the case. Jordan’s initial five-year deal with Nike was signed in 1984 for $500,000 annually (around $1.2 million in today’s money) along with royalties. Nike, on the other hand, made $126 million in year one after predicting $3 million in sales in four years. It was the royalty clause that allowed Jordan to become supremely rich. According to Essentially Sports, the legendary baller gets 5% from each shoe sale which amounts to $150 million per year.

Other interests

Jordan is just as prolific as a businessman as he was as a player. He invested (in a $44M funding round) in sports data provider, Sportradar with Mark Cuban in 2015 which was valued at 2.5 billion in 2020. He also owns a car dealership and five Jordan-branded restaurants. When he sold his 20% stake in the Charlotte Hornets in 2020 to a New York hedge fund he made around $1.5 billion. He’s a partner in tequila brand, Cincoro, headphone manufacturer Muzic, and has a stake in aXiomatic Gaming, the parent company for esports organization Team Liquid (valued at $415 million). He is also an investor in Gigster, a San Francisco-based marketplace for freelance tech talent. It doesn't stop there. Jordan owns The Grove XXIII, a private golf club whose members consist of numerous heavy hitters in sports, finance, and business.

And the Hornets aren’t the only sports franchise Jordan is involved in. He is part of an investor group that bought MLB’s Miami Marlins for $1.2 billion in 2017. His stake is believed to be less than 1%. Jordan is also part of a $305 million investment in Dapper Labs, the parent company of virtual trading-card platform NBA Top Shot. Other investors include Will Smith, Kevin Durant, and 2 Chainz.

Philanthropy

MJ is heavily involved in philanthropy. According to Forbes, his multimillion-dollar share of the proceeds from The Last Dance was donated to charities in Charlotte and Chicago amongst others. He joined forces with other NBA owners to pay arena workers for missed ages during lockdown, and donated millions of dollars to hurricane relief efforts in the Bahamas and Carolinas.

Jordan contributed $7 million to the two Novant Health Michael Jordan Family Medical Clinics dedicated to serving underprivileged members of the Charlotte Community. 

Summary

Michael Jordan was not only one of the most successful athletes on the court but has become the standard-bearer for what is possible off it. The billionaire has been quoted many times. One that aptly sums up his philosophy is: “Never say never. Because limits, like fears, are often just an illusion.”