Michael Jordan's skill on the basketball court and influence in business boardrooms make him the most powerful person in sports for 1997. He is credited with keeping the nucleus of the Chicago Bulls intact. His impact in the business world has moved beyond marketing to decision-making.
Incomparable on the court and unmatchable as a salesman, Michael Jordan's drive carries him to new heights in the boardroom and to No. 1 in the TSN 100
Their season opened in Boston, against a young Celtics team that had listened to 80-year-old Red Auerbach. "David Stern's name is on the basketball," Auerbach had said. "Not Michael Jordan's."
That evening, Celtics TV analyst Tom Heinsohn made sure his audience knew who Jordan is not. "H-s not God." Heinsohn said. "Everybody treats him like a messiah or something. He isn't."
If it seems odd at this point, for so many to be confused about Michael Jordan's identity, it's only because Jordan makes it confusing. He does not own the Bulls, and he isn't general manager, but as sure as they lost their opener to the Celtics and as sure as they drifted through the first two months of the season, he is the guy who built this team, for better or worse.
Shortly after the Bulls defeated the Jazz in the NBA Finals last spring, Jordan said, "We deserve a chance (to win a sixth title)."
Much of what has followed is a consequence of Jordan's desire, ambition and power. Phil Jackson is coach, Scottie Pippen is still a part of the team, albeit disgruntled, and Dennis Rodman is back in Chicago, thanks to Jordan.
The power to shape a basketball team, not just any team, but the defending NBA champions, winners of five titles in seven years, is impressive power, indeed. This is one reason Jordan, 34, is The Sporting News' Most Powerful Person in Sports for 1997.
Here's another: Jim Jannard, chairman and president of Oakley, Inc., welcomed a new director, Bill Schmidt, onto his board this week. California-based Oakley manufactures high-tech sunglasses at a state-of-the-art Orange County factory. Schmidt is executive vice president of Quaker Oats-Gatorade, creator of the successful "Be Like Mike" ad campaign in which Gatorade and basketball superstar beckon thirsty consumers. Jannard and Schmidt were introduced by Jordan, an Oakley director who is developing an inside game--soaring high above boardrooms--to complement his outside shot as a marketing superstar.
The cross-pollination of Oakley and Gatorade, Jannard and Schmidt, is a reflection of Jordan's power outside the game, just as his shaping of the Bulls reflects it within.
He becomes the first No. 1 who started as an athlete before veering into business and media. Previous No. 1s-Laurence Tisch (1990), David Stern (1991), Phil Knight (1992), Ted Turner (1993), Rupert Murdoch (1994 and 1995) and Dick Ebersol (1996)--started in business, law and media before veering into sports. In 1997 we learned that Turner wouldn't mind veering into a boxing ring with Murdoch, Knight leads with his chin on labor issues and Stern and Ebersol are running a three-legged race deep in clover. All No. 1s (save Tisch. who is retired) levitate ubiquitously over the high-flying entertainment-media-sports industry.
Among No. 1s, Knight, Turner and Murdoch are billionaires (and Stern and Ebersol make billion-dollar deals). Jordan is not No. 1 because he has a chance to become the world's first athlete-billionaire, but because he has the requisite drive and brains. It has been a breathtaking ride up for Jordan, the grandson of a sharecropper who couldn't afford a bicycle until he was 16. Signs are promising he can book hang time in the nether world of moguls.
His place in popular culture continues to ascend. Two global celebrities--Princess Diana and Mother Teresa--died in 1997. That leaves Fidel, Mandela, Ali and Michael on a short list of those who need only one name for instant recognition.
When Jordan accompanied the Bulls to the McDonald's Championship in Paris in October, his full-length photo ran on the front page of the newspaper France-Soir with a headline: "The Idol of Young People Is in Paris." The story began: "Michael Jordan is in Paris. That's better than the Pope. It's God in person." At the same time, a Paris department store displayed a white Michael Jordan mannequin, indicative of a basic truth: Jordan hype is as phenomenal as the reality.
"I don't feel powerful," Jordan says. "I never view myself as powerful enough to make decisions or influence business. It's just that, for whatever reason, the public and corporate America have accepted my personality."
What's the point of being TSN's Most Powerful Person if not to feel powerful, Jordan is asked. He chuckles. "Every time I step on the court I consider myself powerful," he says. "People are watching every little move I make. I am in control ... from a skills standpoint."
No argument on that. Jordan's power starts with his decisive and spectacular hoop supremacy. In his last five full NBA seasons he has brought five championships to Chicago. No active athlete in any team sport remotely approaches Jordan's dominance.
"Michael's mind-set, skill, intelligence, athletic courage, grace ... the way he sees the big picture, his genius in the athletic terrain ... all of this sets him apart," NBC broadcaster Bob Costas says.
Other reasons underlie his No. 1 ranking, having to do with sex appeal, expanding business network and force of personality.
In the case of the Bulls, Jordan threatened to retire if Jackson were c not rehired and Pippen not retained. Owner Jerry Reinsdorf and general manager Jerry Krause did not risk calling his hand.
"I expressed my opinion--I wouldn't call it an ultimatum," Jordan says. "If this happens, this is what I Ho If it doesn't. this is what I do. They chose. Some people may view that as power. But I hold true to what I believe and what lies in my heart. I was wiring to go that route (retirement). I didn't say it as an idle threat, because I believed it. It's up to them to believe me. If they do, that's maybe powerful."
Jackson got a $5.8 million deal. Pippen is on the last year of a contract that will pay him $2.2 million, woefully low by NBA talent standards. The Bulls could not offer him more in part because they had no room under the salary cap. Nonetheless, Jordan persuaded Pippen to stay on, while compelling Reinsdorf and Krause not to trade him, though they expected his unhappiness. Once they kept Pippen, they had to take the next step and sign Rodman, despite sensing his decline, because Jordan and Jackson valued his toughness. A key big man from the '97 playoffs, Brian Williams, was lost because of the cap.
As the Bulls limp toward January, Pippen still is sidelined because of foot surgery, and he demands to be traded. Rodman plays lethargically. Jackson's zen is on the blink. Only Jordan, averaging a league-leading 26.8 points, stands between the club and humiliation.
In business, as with the Bulls, he has the power to be who he is, to call his shots, to control his image. A bold display of Jordan's power occurred this year when two companies he represents, Nike and Oakley, collided over use of his image. Jordan has been with Nike since 1984; he earns $15 million to $20 million a year from the $9 billion behemoth. He has been with Oakley since 1995; he earns about $500,000 a year plus stock equity from the $220 million upstart.
An Oakley print ad featured Jordan wearing Oakley sunglasses as well as an DRIVE F Oakley beret. Nike sued Oakley, claiming named its contract with Jordan requires he wear Nike apparel in all of his ads. Jordan says he wore the Oakley beret because he believed at the time his deal with Nike encompassed only athletic equipment.
Nike, of course, is run by a former No. 1, Knight, while Jannard, a billionaire, thinks and acts like one. A few years ago Knight and Jannard were friends; Jannard considered selling his company to Knight. Jannard tried to persuade Knight to go 50-50 on Jannard's footwear design, requiring domestic labor and technology, but Knight declined. A rift developed.
Subsequently, in 1996, Knight led Nike into the eyewear market, provoking a suit from Jannard last July. Nike returned fire early in August by suing over the Jordan beret ad. Later in August, Jannard announced plans to manufacture domestically athletic footwear--the design Knight rejected a few years ago.
In order to spare Jordan a conflict of interest, Jannard is creating a separate footwear board of directors from which Jordan is excluded. But Jordan is caught in the cross-fire between these two companies--and two mentors--even as Nike helps him launch his own line of apparel and footwear, the "Jordan brand," and even as Jordan teams Gatorade's Bill Schmidt with Jannard to advise on Oakley's marketing. The fact that Jordan maintains a relationship with troth warring companies, opposites in manufacturing and marketing philosophy, is evidence of his power.
Jordan says he tries not to choose sides: "My obligation is to Nike because it was my first corporation. I have an interest in Oakley because of endorsement opportunities and opportunity to create a stylish product. When it starts getting into a gray area I step back. I try not to be put in a predicament to choose."
Jannard, 48, speaks frankly to Jordan's presence on the Oakley board: "We thought he had a global Rolodex." This is an understatement Jordan can dial up just about everyone, including President Clinton, a golfing buddy. His tentacles extend from Chapel Hill to Madison Avenue to Hollywood, from Dean Smith to Wieden & Kennedy to Spike Lee. His endorsement deals alone constitute a powerful network: General Mills (Wheaties), Ray-O-Vac, Bijan WorldCom, Sara Lee (Ballpark Franks, Hanes, Coach Leather), CBS Sportsline, CBS Fox Videos, Upper Deck, Wilson, AMF and Chicago Chevrolet, as weD as Nike, Quaker Oats-Gatorade and Oakley. WorldCom CEO Bernard Ebbers, whose company recently entered into an agreement to merge with MCI for $37 billion in cash and WorldCom stock, made a special trip to recruit Jordan, and landed him with a stock-equity deal.
But Jordan brings other qualities to the boardroom. Jannard cites Jordan's innate sense of style. "He has a great connection with the artfulness of a product," Jannard says. Indeed, Jordan's instinctive elegance--so evident on a basketball court and in the drape and line of his clothing--is valued in the design of Oakley sunglasses. Additionally, Jordan brings "a voice of reason," Jannard says, often guiding discussion with a common-sense observation.
A measure of Jordan's power is the value of his time and image. Oakley's $500,000-plus-equity deal is relatively cheap because Jordan likes Jannard. Not everybody gets a discount. The Bulls pay him $33.14 million, while the NBA's second highest-paid player, Kevin Garnett of the Timberwolves, receives about $21 million. Bijan, the makers of Jordan's cologne line, pays him $250,000 to promote his fragrance. Jordan justified the payment to ABC's Chris Wallace, saying that when he mentioned the cologne on an appearance on The Tonight Show, "In terms of advertising, that's almost like three commercials. That could value ... $2.5 million ... easy."
Sports Marketing Letter's ranking of the 10 most-wanted athlete endorsers puts Jordan on top by a wide margin. The publication estimates his annual non-basketball take at $40 million, with Tiger Woods second at $25 million, Shaquille O'Neal third at $23 million, down to Deion Sanders at $6 million. "Michael is the standard against which all athlete endorsers are measured," editor Brian Murphy says.
Forbes magazine estimates Jordan's non-basketball income at $47 million and his overall income at $78.3 million in 1997. Forbes estimates that the second-richest athlete, Evander Holyfield, earned $54.3 million.
Jordan's value was underscored upon his return to the NBA in March 1995, after an 18-month hiatus in baseball. The stock-market value of five endorsees--McDonald's, Sara Lee, Nike, General Mills and Quaker Oats--soared $3.8 billion within two weeks.
NBC made sure to feel out Jordan before undertaking renegotiation of its NBA package. NBC Sports president Dick Ebersol met with Jordan last summer at the Ryder Cup in Spain. Jordan told Ebersol he probably would play just one more season and for the Bulls only if Phil Jackson coached. Ebersol won't say if the subsequent $1.75 billion package was influenced by his discussion with Jordan, but his admission that the discussion even occurred suggests the network may have lowered the bid by millions. As Ebersol points out, the five NBA Finals involving Jordan rank among the 10 most-watched Finals.
NBA commissioner David Stern confirms that Jordan's retirement came up during negotiations but minimizes its effect on the outcome. "NBC and Turner gave the NBA a vote of confidence," Stern says. "That doesn't mean our ratings won't decline somewhat ... obviously you can't easily replace a personality like Michael ... but they have confidence in our long-term viability."
The NBA's challenge, Stern goes on, is to build with new stars on the popularity created by Jordan.
"We can do it, perhaps not with the singular impact of Michael but with more sharing of the burden," Stern says.
What Jordan touches turns to gold. Jordan products accounted for $200 million (5 percent) of Nike's revenues in the early 1990s. And now? His Jordan brand, launched as a separate Nike division in September, is on its way to becoming the No. 2 athletic brand to Nike, according to Michael Jacobsen, Sports Style magazine editor-in-chief. Jordan's coffee-table book, Rare Air, sold almost one million copies, at $50 hardcover and $25 soft. Jordan's movie, Space Jam, topped $250 million at the box office and is at $1 billion in retail merchandise sales, his agent, David Falk, says.
The value of Jordan's image is such that it routinely is poached. Currently, Jordan is suing Fountain Powerboats for trademark infringement. Fountain, a North Carolina-based company owned by Reggie Fountain, ran magazine ads reading, "Move over Michael Jordan, Reggie Fountain is flying high." In the same ad the words "Air Reggie" appeared beneath a photo of a boat. The $10 million suit allege that Fountain used Jordan's name in ads after being rejected as an endorsee.
As gatekeeper, legal enforcer and visionary, Falk is Jordan's alter ego. Jordan's power is enhanced by Falk's power as CEO of Falk Associates Management Enterprises, which represents stars such as Patrick Ewing, Juwan Howard, Alonzo Mourning, Dikembe Mutombo and Allen Iverson.
Through Falk, Jordan has influence over collective bargaining. Within the past year, Falk gained control of the players union through the electron of his clients to leadership positions, including Ewing as president. Jordan and Falk led a 1996 movement to decertify the union so that the salary cap could be relaxed or jettisoned. Their bid narrowly failed, leaving a soft cap in place, but now Falk is regrouping for another attempt, likely to occur after the 1998 playoffs.
Although Jordan says this could be his last season, he also said he was done with basketball in 1993-94, when his Bulls jersey was retired. His value on an open NBA market--perhaps to a club seeking to coax a farewell season out of him--could soar above $50 million. While Jordan is taking a low profile this time, he lends stature to Falk's cause, and he rarely misses a chance to declare his "pro-player" sentiments. Their control of the union may be strong enough to swing a majority vote.
Falk's 13-year relationship with Jordan illustrates how a smart, ambitious agent can help an athlete, and vice versa. Early in Jordan's career, Falk encouraged his Nike connection and even coined the "Air Jordan" label. In 1989, Falk made Jordan the first player to "opt out" of the NBA's licensed sales business, essentially reclaiming Jordan's image for his own use.
Then, Jordan made Falk. When Falk broke away from his employer and mentor, Donald Dell of ProServ, in 1992, Jordan assured Falk's success by leaving Dell and following Falk. Moreover, Jordan accepted short money from the Bulls, rather than ask for a trade, while his contract was subject to Falk's litigated compensation agreement with Dell--a percentage of Falk's annual revenues. When he hit up owner Jerry Reinsdorf for his first $30 million contract Falk was off the hook to Dell.
Jordan and Falk, 47, continue to empower one another. Jordan is Falk's de facto "rainmaker," i.e., a magnet to new clients and a door-opener to new deals. Though Falk says Jordan won't speak to potential clients, Falk has four of the first eight draft choices in 1997--Keith Van Horn, Antonio Daniels, Ron Mercer and Adonal Foyle--in no small part because of Jordan's luster.
"Working for Michael Jordan enables us to call the chairman of Nike, AT&T, WorldCom, Quaker Oats, Coke and Pepsi," Falk says. "Michael creates tremendous opportunities and creates access for our clients. Michael's success has given us a patina. People are more apt to listen to our opinions about new players like Keith Van Horn. As long we don't abuse our credibility, Michael has given us the credibility to make an impact on the next generation."
In return, Falk supplies courtroom ferocity and negotiating guile. Last summer, the Chicago Tribune reported that Falk almost signed a deal making Jordan a Knick, before ITT sold its interest in the club. While Reinsdorf dragged his feet, Falk sought the Knicks' $12 million in salary-cap space, as well as a separate $15 million deal as ITT spokesman. Falk denied the gambit, but the Tribune concluded that move leveraged Reinsdorf into increasing his offer.
With Jordan as a calling card, Falk is building ties to the entertainment industry, seeking to market athletes as thespians. Space Jam, co-produced with Warner Brothers, was Falk and Jordan's first foray and hugely successful. Contrast that with Shaquille O'Neal's sad attempts on the big screen. Recently, Falk announced the launch of a production company geared toward "urban-based entertainment for ethnic audiences." The company, called New Urban Entertainment Productions (NUE) has a $50 million start-up budget to produce TV shows, films and new media. Falk's partner, Robert Townsend, a former Bell Atlantic Video Services executive, says NUE will market to Fox, WB Network, HBO and BET. Falk says NUE is likely to develop a project for Jordan, as well as his other clients.
As deal follows upon deal, critical mass is attained, creating more deals by force of momentum. An example is Jordan's website launched on CBS Sportsline in October. Sportsline is banking on Jordan to help it overtake ESPN SportsZone in the website wars. Jordan's Sportsline deal, with stock-equity potentially worth $10 million over 10 years, is possible because he brings along seven charter sponsors, six of which are companies he endorses. The seventh, Microsoft, adds Bill Gates' number to Jordan's Rolodex. "Michael's deals are brilliantly crafted," NBC's Ebersol says, "in that none are tied to when he stops playing."
Indeed, Quaker Oats' outgoing CEO, William Smithburg, suggests that his company should extend Jordan's 10-year Gatorade contract beyond 2001. "He can be very valuable long after his playing days are over," Smithburg says.
Inevitably, the lure of yet another deal is underwhelming. Recently, Falk dined with Jordan and Jordan's wife, Juanita, a former bank executive. After dessert, in a 10-minute conversation, Falk laid out $75 million of proposed deals. Jordan weighed the offers against the time each would require. Time is the luxury Jordan most craves. A measure of power is being able to just say no; Jordan shook his head and Falk sighed.
Power is more than control over the levers of business; it resides in imagination and spirit Jordan has something unique among No. 1s--inspirational power. It's the difference between church and state. While other No. 1s are merchant kings, Jordan is High Priest of Sweat.
As an athlete, Jordan sets a global standard of excellence. He reinvented athleticism for his generation, stamping it with elegance, dependability, toughness and an infectious joi de vivre.
"Michael stands for an approach to competition," Costas says. "His level of commitment, his bringing respect and integrity to the game and his team concept are the direct descendent of Bill Russell.
"The fifth game against Utah, performing up to his own expectations, in his own realm, was as good as it gets."
Game 5 of the '97 Finals already is seeping into legend. Flu-ridden and dehydrated, Jordan arose from his sickbed to play 44 minutes and record 38 points (15 in the fourth quarter), seven rebounds and five assists in the Bulls' 90-88 victory. Body numb with pain and fatigue, eyes glazed, Jordan triumphed by force of will. The Bulls closed out the Jazz in Game 6 for a fifth title in seven years, 11/2 of which Jordan missed while playing baseball.
Fans continue to place Jordan atop popularity polls. A July survey by SRi USA found him to be the most admired male athlete, followed by Tiger Woods, Michael Johnson and Troy Aikman. Forty-eight percent of children, ages 9 to 13, responding to a Sports Illustrated for Kids survey, ranked Jordan as their favorite pro basketball player. Charles Barkley and Dennis Rodman were second at 7 percent.
"Talk to anybody, and they want to be like Mike," Gatorade's Schmidt says.
Handsome, popular, athletic, rich and Most Powerful. Sure, why not?
Steve Marantz is a senior writer for The Sporting News.