Wanna be like Mike? Start by growing your assets exponentially…after you retire. How MJ changed the game, again, becoming basketball’s first (and probably last) billionaire.
By Kyle Magin
The following May 2012 Twitter exchange is important:
@drake: the first million is the hardest.
@boonepickens: The first billion is a helluva lot harder
Yep, that was Canadian rapper Drake getting RT’ed by Oklahoma State’s Phil Knight, oil billionaire T. Boone Pickens. The latter brought an all-time serving of humble pie.
Setting aside the bizarreness of that exchange three years on—T. Boone Pickens followed (follows?) Drake—it’s interesting to note its relevance to professional basketball, which just saw its first ex-player make the world’s roll call of billionaires.
Michael Jordan broke the billion-dollar barrier for the first time last year according to Forbes, and he may be the last player ever to do so*.
It’s weird to remember that MJ came up in a totally different era than the one he effectively fathered, where $100 million contracts are plentiful in the National Basketball Association. His image on everything from sneakers to soft drinks, his iconic Jumpman logo (which made $2.2 billion for Knight’s Nike last year alone), IMAX and Hollywood movies starring his likeness and decades of Hanes commercials have been synonymous with Jordan for as long as my 30-year-old’s memory stretches back.
Even during that run, though, Jordan was underpaid (in the market-value sense) for actually playing basketball. Jordan returned to basketball from baseball at the end of the 1995 season making $3.8 million—placing him squarely outside of the top 15 salaries in the league even at the peak of his powers. This owed to a contract he signed in the 1980s, before the NBA had emerged to become the global marketing powerhouse it was after the Dream Team and cable TV deals. In fact, only in Chicago Bulls owner Jerry Reinsdorf’s two make-good years for his star from 1996-1998 (MJ made $63 million during that time) was Jordan the league’s top earner. Even then, upstarts like Kevin Garnett (then 20) were on his heels—Garnett signed basketball’s first $100 million contract in Jordan’s last year with the Bulls.
Both of his Washington Wizards seasons saw His Airness take home just more than a million a pop for his playing services. In fact, throw out his 96-97 and 97-98 seasons and Jordan took home just more than $27 million over the course of his playing career, or roughly half of what Eric Snow walked away with in on-court dollars.
This history lesson is important for the future. LeBron James was worth $200 million between Nike and the Cavaliers alone before he stepped on the court in 2003 at age 18. Last year’s No. 1 overall pick, Andre Wiggins, will make $25 million on his first contract. With players making so much off basketball alone one has to question whether their inner businessmen will be hungry enough for reach for as much outside of basketball as MJ did, or to grow their fortunes as ruthlessly he did.
What MJ did to make himself a billionaire isn’t easy. Even with an army of lawyers and agents there are a lot of up-front costs to buying into something like the Charlotte Bobcats and all the attendant headaches. You can be sure that even having a small hand in managing Nike’s global distribution chain is no walk in the park**. Make no mistake—even without 96-98, Jordan would have been a very wealthy man for the remainder of his life.
But he kept pushing himself into meeting after meeting, deal after deal even after a physically punishing career. It’s an incremental accumulation as compared to a few massive paydays from your team and the folks in Beaverton. You have to want the fight, badly, to keep going after signing on for nine-figures as a 21-year old. You have to delay gratification and be willing to beat the bricks long after your knees give out and a Caribbean vacation on some random Tuesday is always an option. I’m not saying it’ll never happen, but why keep chasing once you’ve won generational wealth?
That first billion is the toughest.
*at least while a billion still means what it does today, inflation being what it is.
**Though it’s probably easier being on Jordan’s end of the equation as opposed to, say, an 11-year-old in Asia.