African sportsmen can a learn from Michael Jordan on how rewarding it is to make critical business decisions that will return superior earnings well beyond their playing days and mega-bucks salaries.
A few months ago, Michael Jordan officially joined the world’s exclusive and elite club of billionaires after landing the $1 billion valuation this week. The impressive achievement has predictably raised the conversation of how retired athletes can remain relevant enough to attract earnings commensurate with what it was during their active days or even slightly increased.
Jordan, initially drafted in 1984 by Chicago Bulls, has gone down as a legend of basketball after a hugely successful career which saw him win an impressive array of tournaments and create a number of records. Predictably, Jordan’s sporting talent spawned a great number of commercial activity as brands sought to associate themselves with basketball’s biggest name. However, since retirement in 2003, the “Jordan brand” has gotten increasingly stronger as the athlete ventured almost immediately into entrepreneurship.
Jordan is now a clear example of how sports biggest names can remain attractively relevant and maintain significant earning potential. In comparison, we take a look at how, through three of the biggest lessons from Jordan’s story, Africa’s sports men can increase business portfolios, enhance brand strength and remain key business players in the sporting sector, well beyond their playing days.
Maintain relevance
In the age of technological advancements in media and connectivity and the fast moving nature of news and events, it is essential for retired sports men to maintain impressive relevance levels in various ways.
Henry Schafer, Executive Vice-President at the Q Score Company, a firm that measures awareness and popularity among fans, has described Jordan’s enduring popularity among fans as unique. Jordan’s Q score has topped all other sportsmen every year since 1987 except in 1990 when he was surpassed. “Jordan is unique in that he has been able to maintain that emotional connection with his consumer base for more than 25 years,” Henry Schafer told Forbes.
This enduring connection and relevance within sports fans give Jordan a unique advantage. These potential retail customers form a major part of revenue for some of Jordan’s main businesses – the Jordan Brand, a division of American sports wear giants, Nike.
Also given Jordan’s continuing appeal, he remains a big attraction for endorsements. He reportedly earned $80 million in 2012 from endorsement deals with partners such as Nike, Gatorade, Upper Deck, 2K Sports, Presbyterian Healthcare, Five Star Fragrances and Hanes. His ability to pull revenue from endorsements two decades after retirement is an incredible achievement.
Leveraging brand strength
At the peak of his powers Jordan’s brand was incredibly strong. So strong that Nike thought it smart business to fashion out a division anchored solely on Jordan’s brand name. The famous Air Jordan brand has gone down as one of Nike’s most profitable business decisions. An initial five-year deal which cost Nike $500,000 laid the foundation for The Jordan Brand. It currently generates more than $1.5 billion globally.
Such is the strength of the Jordan shoe brand that in 2012 it had 58 percent of the U.S basketball shoe market, surpassing even its parent company, Nike, which controlled only 34 percent. For sportsmen, given the relatively transient period of being profoundly elite, it can be beneficial to explore long-term avenues of creating value based on brand power. While Nike’s runaway success with the Jordan Brand is largely respected, others have registered success that is, while not comparable with Jordan’s success, also impressive.
Investment is non-negotiable
Fewer things guarantee long-term revenue generation and as such it is crucial for sportsmen to make proper business investments when at the peak of their careers. Despite’s Jordan’s impressive earnings in sports, the former Chicago Bulls star has investments across the United States. He owns seven restaurants, a motorsports team, a car dealership and, most crucially, a 90 percent stake in the basketball team Charlotte Hornets – an investment which was largely responsible for his inclusion in the list of billionaires. Jordan’s investment in Charlotte Hornets has proven to a masterstroke as the team’s recent increase in value following the sale of LA Clippers for $2 billion had positive effects on team values in the NBA. Similarly, basketball luminary LeBron James made $30 million after Beats by Dre was acquired by Apple. Smart and forward-thinking and guided investments such as these could prove to be crucial sources of income for sportsmen in future. Jordan’s financial success off the basketball court with his current valuation as a billionaire is all the more impressive. His career earnings (salaries) totalled only $90 million, a fraction of his current billionaire valuation.
Jordan’s model can serve as a guide of sorts for Africa’s elite sports men who earn millions during their active careers to ensure that their post-retirement lives are just as financially rewarding as their sporting days.
