For Nike, Jordan delivered the goods and more
The men of Nike had gathered in the Oregon woods, taking an off-site meeting in a mansion where a change of scenery might assist as the company charted an expensive and daring path into professional basketball.
Phil Knight was there. So was his right-hand man, Rob Strasser, lawyer Howard Shluser and designer Peter Moore, among a host of staffers.
At the time none of them knew much, if anything, about a skinny, 6-foot-6 shooting guard from North Carolina named Michael Jordan. They certainly couldn’t have dreamed what he would mean to their company.
On Friday, Jordan will be enshrined in the Naismith Basketball Hall of Fame as the greatest basketball player to ever lace them up. His impact on what gets laced up in every sport these days is even greater than his on-court accomplishments.
And it all started that January day in 1984. Knight founded Nike in the early 1970s to produce running shoes. To that point, its forays into pro hoops had been unsuccessful.
Now Nike wanted to try again. In 1979, Knight had met John Paul “Sonny” Vaccaro, a basketball maven who pitched a groundbreaking idea: The company would sign endorsement deals with college coaches who, in turn, could turn their players into billboards for the brand.
At first, no one even knew if it was legal, let alone if the colleges would allow it. But by the time of the off-site meeting, Nike owned much of the college game – overnight, Vaccaro had delivered signature programs from Georgetown to UNLV.
“I was charmed by Sonny,” Knight would say. “After that, we gave him all the room he wanted.”
As successful as the college venture had been, Knight knew the big money was in the surging pro game, where Larry Bird and Magic Johnson had vaulted the league’s popularity. Both players, however, wore Converse.
The men at the meeting were following Nike’s well-worn path of thinking far outside the box. With most of the NBA’s top players already locked up to Converse, Nike officials thought they should gamble on a rookie, a fresh new face for the league.
Even more daring than that, Nike was considering creating and marketing a signature shoe around the player, and selling not just a piece of footwear, but an entire package of performance and personality.
The draft class had a number of promising choices. Akeem Olajuwon had played in three Final Fours and would be the No. 1 pick. Charles Barkley boasted an oversized personality. John Stockton was a potential white star. A number of people wondered whether it wouldn’t be best to sign them all to smaller deals, hedge the bets a bit on this signature shoe.
Then Strasser turned to Vaccaro, the man whose instincts made up for his lack of formal business education, and asked him which player he preferred.
“The kid from North Carolina,” Vaccaro said.
Jordan was on everyone’s radar, but was Sonny really sure of him? Yes he’d hit the game-winning shot in the 1982 NCAA championship for North Carolina, but he wouldn’t return to the Final Four again in his career. He wasn’t a prolific scorer – it was later joked that because of his conservative style Tar Heels coach Dean Smith was the only man who could hold Jordan to under 20 points a game. And Jordan, after all, would wind up as just the third pick in the NBA draft. Wouldn’t it be better to gamble on, you know, No. 1?
More than that, Jordan hadn’t displayed much of a personality. Carolina was a program that kept its players under wraps, this was no Barkley. Besides, no one knew him. Carolina was a Converse school; Nike had no entrée. Even Vaccaro had never spoken to Jordan, a rarity since Sonny had met nearly every great young player while operating the Dapper Dan Roundball Classic, the first national high school all-star game. Jordan, somewhat of a late bloomer in high school, hadn’t been invited to the tournament his senior year.
There were other concerns. In 1984, there were almost no breakout black stars in America. Michael Jackson was just beginning his stratospheric run. “The Cosby Show” wouldn’t premiere until later that year. The idea of having a young black man sell shoes to white America was absurd. Let alone a young black man no one had ever met.
“The risk,” Vaccaro recalled this week, “was enormous.”
So Strasser leaned in and took a hard, long look at Vaccaro.
“Sonny, if you’re so sure about Michael Jordan, are you willing to bet your job on it?”
Vaccaro didn’t hesitate.
“Yeah,” Vaccaro said, neglecting to mention he wasn’t making all that much money anyway.
It didn’t matter. The decision was essentially made.
So why was Vaccaro so convinced about Michael Jordan? Why did he feel so confident about a decision that even Jordan has since said surprised him? To Jordan, the idea of a signature shoe just didn’t seem possible at the time.
“I wish I could give you something,” Vaccaro said. “I just knew he was the guy.”
Two years prior, Vaccaro had watched Jordan calmly sink a national title-winning jump shot. The shot was remarkable not just because Jordan made it, but also because Dean Smith had called on a freshman to take it rather than his veteran All-Americans, James Worthy and Sam Perkins.
There was also the way Jordan carried himself, the fact his game was so enticing for young players (kids dream of being slashers, not centers) and that now-famous, mega-watt smile he wore while playing. The guy just looked likeable.
Whatever it was, Vaccaro was right. He later built Adidas basketball by gambling on a confident teenager named Kobe Bryant(notes) and by striking an endorsement deal with a Catholic high school in Ohio that featured a 15-year-old named LeBron James(notes).
Turns out, Vaccaro wasn’t a one-hit wonder when he picked Jordan out of the crowd.
Vaccaro didn’t meet Jordan until six months later; they had lunch following an Olympic practice at Tony Roma’s in Santa Monica, Calif. Weeks later, Strasser met the young phenom at the L’Ermitage Hotel in Beverly Hills. Jordan and his parents later traveled to Beaverton, Ore., where Knight put on a full-court press.
A small bidding war between Reebok, Adidas and Nike finally netted a deal: $500,000 and a cut of the profits for M.J.
By early 1985, a shoe was constructed. It was a little clunky and unorthodox, featuring the red and black colors of Jordan’s Chicago Bulls. But it was also nearly an instant hit, powered by Jordan’s high-flying game (he and Dominique Wilkins engaged in a memorable slam dunk duel at All-Star weekend).
That year NBA commissioner David Stern provided Nike with marketing gold when he banned the shoe for not complying with league color schemes.
“I knew we were onto something huge when David Stern wouldn’t let him wear the shoes,” Vaccaro said.
Sales went through the roof. One day Jack Joyce, then in charge of production at Nike, was so overwhelmed by orders for anything Jordan-related, he threw up his hands and declared, “Let’s just make everything black and red, and sell it.”
Nike just about did, and demand increased so quickly that at one point there was a run on the world’s supply of red-colored thread. The momentum didn’t slow, either. In 1984 Nike’s total revenue was about $900 million. By 1997, when Jordan was closing in on the fifth of his six NBA titles, it hit $9.19 billion.
Sales of Jordan shoes continue today. There have been 23 signature shoes plus the limited release Jordan 2009 that came out earlier this year.
Jordan is now his own brand at Nike. The Jumpman logo and so many of his commercials and pitch lines – “It’s gotta be the shoes” – are iconic in their own right. Meanwhile, the nation’s embrace of a black man at the heart of an advertising campaign helped open countless corporate opportunities for African-American athletes and entertainers.
“He’s the single most influential endorser that will ever live,” Vaccaro said.
And it all started with a big gamble at a small off-site deep in the Oregon woods.