Monday, November 07, 2011

Michael Jordan – now an NBA owner (and not a hypocrite)


According to Forbes, Nike is the world’s leading sports brand. Forbes 2011 Top Sports Brands list cites Nike’s value at $15 billion; an incredible 38% share of the branded footwear industry. The key to Nike’s success – Michael Jordan. Now the president, owner and general manager of the Charlotte Bobcats he is also, reportedly, the defacto leader of hardline NBA owners and, if some media reports are correct, a scourge to NBA players today.

Fox Sports columnist Jason Whitlock offered a damning full frontal assault on Jordan calling M.J. a “cheap, stingy, mean-spirited, cut-throat, greedy, uncaring, disloyal slave to his own bottom line.” Michael Jordan may be many things, not all of them great, other than his once-in-a lifetime ability to play basketball.

Today he is the owner of a small market NBA franchise, a business facing the concerns that in large part put the NBA in the midst of a lockout that could, in the coming weeks, see the 2011-12 NBA season canceled. The billions and billions of dollars the NBA earns, when the league is playing basketball, is in large part because of Michael Jordan – the basketball player. As the owner of a small market NBA franchise Michael Jordan has the fiduciary duty to his Bobcats partners to protect their investment and the trust they’ve placed in Jordan, and that responsibility includes ensuring a new NBA collective bargaining agreement protects the interest of small market NBA teams.

At the peak of his NBA career, following the 1998 season after Jordan led the Chicago Bulls to their fifth of six NBA championships, Fortune Magazine offered an interesting look at Jordan’s economic impact, dubbing their piece “The Jordan Effect.” Fortune put together a somewhat subjective overview of Jordan’s impact, from the increased value of the Chicago Bulls, to the affect Jordan had on the marketing and selling of NBA videos. Fortune believed Michael Jordan’s economic impact (and again this is back in 1998) was in excess of $10 billion.

Whitlock asserts in his report that “Allen Iverson, LeBron James, Dwyane Wade, Paul Pierce, the Fab Five, etc., made Michael Jordan a billionaire.’ Nothing could be further from the truth, it was Michael Jordan’s abilities that made Iverson, James, Wade and today’s NBA players the millions of dollars they make. Many sports observers believed Michael Jordan was the best athlete of the 20th century. If not the best, he was at or near the top of the list. Bottom line, Michael Jordan was the NBA and without Michael Jordan the NBA would still be a major sports league but would have earned billions less than it has since his arrival.

After a brief stint as an owner and executive with the Washington Wizards in 2000-01, Jordan returned to the court as a player for the team for the 2001-02 and 2002- 03 seasons before retiring for a third and final time.

In March 2010, Jordan became the majority owner of the Charlotte Bobcats. He paid $275 million to gain control of the Bobcats, after four years as part of the team’s ownership group and its Managing Member of Basketball Operations. Jordan is the first former player to become the majority owner of an NBA franchise. Jordan bought the Bobcats from Robert L. Johnson, the founder of Black Entertainment Television, who paid $300 million for the expansion franchise in 2003. Johnson lost more than $100 million during the years he owned the Bobcats.

Michael Jordan has proven himself to be a successful businessman. Since its creation, his Jordan Brand, a division of Nike, has been an innovator of athletic shoes and apparel. The Jordan Brand has grown to become a market leader under Jordan’s creative design input. As one of the world’s most popular and recognizable figures, Jordan’s endorsement portfolio includes Gatorade, Upper Deck and Hanes, among others. In 2004, Jordan formed Michael Jordan Motorsports as a result of his passion for motorcycle racing. Among Jordan’s other business ventures are several thriving restaurants.

Jordan serves as the Make-A-Wish Foundation’s Chief Wish Ambassador and supports many other charitable causes including the James R. Jordan Boys and Girls Club in Chicago and the Jordan Institute for Families at the University of North Carolina, among others. His annual Michael Jordan Celebrity Invitational golf tournament has raised over $5 million for several worthy charities since its inception.

The Jordan Brand is legendary as one of the most important brand names in sports. It dates back to when Jordan joined the Chicago Bulls.

According to Sneaker News: Before Air Jordan’s, all basketball shoes were white. This simple statement only begins to describe the sheer magnitude of the changes that were about to occur to the sport of basketball and to the athletic footwear industry once Michael Jordan entered the league. Since Michael’s arrival and the launch of the Air Jordan franchise, both the game and the industry have been utterly transformed.

Each year, a new Air Jordan is unveiled. An annual event since its debut in 1985, each unveiling has been met with ever-increasing anticipation from the media, the industry, and the buying public. Air Jordan’s perennially dominate the market in sales and demand, establishing with each year’s model higher benchmark standards in design, innovation and performance for the entire athletic footwear industry. At the heart of the franchise is the perfect synergy between athlete and technology, Michael Jordan, the greatest player in the history of basketball, and the shoes he’s worn throughout his illustrious career that epitomize his relentless dedication to performance, innovation and achievement.

Today’s Air Jordan’s continue to build on the franchise’s rich history of innovative design and uncompromising performance. Inspired by the greatest to ever play the game, the franchise continues to lead and shape the athletic footwear industry into the future. As Michael’s legend continues to grow, his legacy in the Air Jordan franchise lives on.

One can make a pretty good argument that Michael Jordan hasn’t done well when it comes to evaluating basketball talent. While with the Washington Wizards, Jordan selected Kwame Brown with the first overall selection in the 2001 NBA draft. Brown was one of the worst first overall picks EVER. In 2006, Jordan now with the Bobcats, picked Adam Morrison with the 3rd overall pick.

The Michael Jordan of 2011 is facing the same issues all small market NBA owners are dealing with: escalating costs, decreased revenues, all while being forced to compete against big market NBA franchises. Jordan earns upwards of $70 million a year in endorsements, $5 million more than the Bobcats 2010-11 payroll.

The optics of Michael Jordan, the foundation of today’s NBA, is being forced to deal with the persona he enjoyed while he was an NBA player. In simpler terms, the Michael Jordan of today is being haunted by the words he expressed when he was the Michael Jordan of yesterday.

One of the classic Jordan quotes from yesteryear dates back to the 1998 NBA lockout. During an early October meeting in Manhattan, Jordan sparred with Wizards owner Abe Pollin in front of Stern, other owners and more than 100 players. After an impassioned Pollin, the league's senior owner, talked of his struggle to keep his team, Jordan interrupted. "If you can't make it work economically, you should sell the team."

As a hardline NBA owner the Michael Jordan of today is the Abe Pollin who Jordan told in no uncertain terms should sell his NBA team.

Sports Illustrated reported in 1995 that Jordan, and his agent David Falk, were leading a movement to decertify the NBA Players Association. According to SI’s Phil Taylor, “[then Hawks forward Grant] Long received a video via overnight express from the decertification camp, which is led by various agents and stars Michael Jordan, Patrick Ewing and Reggie Miller. He put it in his VCR, and there were Jordan, Ewing, Miller and other players trying to convince him that decertifying the union was the only logical alternative. The dissidents argued that union executive director Simon Gourdine and union president Buck Williams had negotiated two bad deals. The first one, which was abandoned in the face of intense opposition, included a team luxury tax that, it was argued, would have put a drag on salaries. In the dissidents' view the current proposal was only slightly better.

“Long watched and listened as Jordan, Ewing and Miller told him that the best way to get a fair deal was to eliminate the union. Under antitrust rules, that would allow the players to seek an injunction against the owners' two-month-old lockout. The teams would then be forced to open their doors to the players, and without the leverage of a lockout the league presumably would negotiate a deal more favorable to the players.”

If the NBAPA decertifies the 2011-12 NBA season is dead. That isn’t what the Michael Jordan of today wants to see take place.

And from a 1995 Chicago Tribune report a couple of Jordan classic quotes: "All [Stern] has to do is evaluate the deal he has proposed to us from a player's standpoint," Jordan said. "He wouldn't recommend that; he wouldn't accept that deal from a business standpoint so why would he ask the players to do that?"

"I can see Clyde Drexler, I can see Charles Barkley, I can see David Robinson and I can see all these stars saying, `Great, it's a good deal,' " he said. "Yeah, it's a good deal for us--for the superstars. But for these young players who are going to move forward and make this league and make the game of basketball as popular as it is today, it's not a good deal for them. That's why we're making this stand."

None of what Michael Jordan said when he was Michael Jordan the basketball player make Michael Jordan the NBA owner a hypocrite. If, as The New York Times first reported, the Michael Jordan of today has become a hardline NBA owner that might not be the best decision Jordan has made in recent years. Among the 29 owners, Michael Jordan is the only owner to be selected to the Basketball Hall of Fame as a player. The Bobcats lost more than $100 million in the six years Robert Johnson owned the team before Jordan took over. It’s likely the team continues to lose tens of millions of dollars annually.

The Michael Jordan of today has no choice as long as he continues to own an NBA franchise other than to be a hardline owner. Jordan the owner can’t compete against the major market NBA teams. Michael Jordan doesn’t want to lose tens of millions of dollars as an NBA owner. That doesn’t make the Michael Jordan of today a hypocrite for what he said ten or more years ago, that makes Michael Jordan a businessman.

For Sports Business News this is Howard Bloom

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