Apart from dominating the NBA, Michael Jordan also has a phenomenal track record when it comes to venture investing in the sports and entertainment industry. He was the highest paying athlete during his time, but most of his $2.2 billion net worth actually comes from decisions made off-the-court.

In this post, we take a look at the background behind Michael Jordan’s best investment decisions and how it turned out for Jordan:

1. The Jordan Brand

Before the debut of the Air Jordan shoes in 1985, Converse All-Stars were the hype of the town in NBA. When Nike came with a collaboration deal to then North Carolina Rookie Jordan, Michael almost turned it down in favor of Adidas. After all, Jordan’s role model Marques Johnson was being represented by Adidas. In comparison, Nike was still a small company that was in its early stages of penetrating the athlete market.

Jordan, ultimately, went with Nike due to the unusual deal structure that provided a lot of potential upside. David Falk, Jordan’s agent at the time, negotiated in the possibility of Jordan having his own shoe line with an annual drop schedule of one shoe per year.

Nike had just introduced its “Air Sole” technology for its sneakers. The name “Air Jordan” was the perfect fit for Jordan’s brand, and the first ever red and black colored Air Jordan 1s were born.

The collaboration between Jordan and Nike was met with backlash from the NBA. At the time, the National Basketball Association wanted all players to wear the same white colored Converse shoes as it helped highlight and emphasize the team colors on jerseys. What they didn’t want was one single player to represent the association or have their own identity tied in with the game.

When Jordan stepped on the court for the Bulls with colored sneakers, it caught the attention of NBA commissioner David Stern. NBA acted on it and claimed that Jordan had violated the 51% rule which requires at least 51% of the colors on a player’s shoe to be white. Jordan and Nike collectively fought back through aggressive advertisement campaigns and capitalized on the controversy.

The sneakers had racked up nearly $100 million in sales in just the first 12 months. The follow-up Air Jordan II, released in 1986, were the first to contain the jump-man logo that has become enamored with Jordan’s brand today.

By 1997, the Jordan shoes had become so popular that Nike began to market it as its own separate brand. In 2018-19, the Jordan brand reportedly generated around $3.1 billion in revenue, of which Michael Jordan earns a 5% royalty for himself.

2. The Charlotte Hornets

After Jordan retired for the second time in 1999, he offered to take a minority stake in the Charlotte Hornets, who were then known as the Bobcats. The deal ended up collapsing after Jordan was turned down by the owners.

In 2005, Jordan tried his luck once again and was able to receive a minority stake, as well as the responsibility of building out the team’s roster. In 2010, Jordan seized control of the Hornets by paying ~$180 million in cash and assuming all the debt that the franchise had accrued.

Although the team itself isn’t performing fantastically, this investment turned out to be one of the most lucrative ones for MJ. As of 2021, the franchise was worth roughly $1.5 billion, or almost 5x what Jordan paid for it. In 2018-19, the Hornets generated $240 million of revenue and $39 million in operating income.

In September of 2019, Jordan sold 20% of his stake in the Hornets to Gabe Plotkin, of Melvin Capital, and Daniel Sundheim, of D1 Capital for ~$300 million. Jordan owned 97% of the franchise prior to the sale, and continues to maintain control over the Hornets.

3. Sportradar Group

In 2015, Michael Jordan invested in the $44 million venture round of Sportradar, a global leader in sports data and sports-related digital content. Customers of Sportradar include DraftKings, Twitter, and ESPN.

On September 14 of 2021, the company went public on the NASDAQ stock exchange at a price of $27/share, valuing it at ~$8 billion. The Switzerland based company raised almost $513 million from the IPO, and Michael Jordan subsequently increased his stake in the company. He also serves as a Special Advisor to the Board of Directors of Sportradar.

As of this writing, the company is valued at $4.13 billion. Sportradar generated ~$500 million in TTM revenue with EBITDA of ~$136 billion. The company is growing quarterly revenue at 29.9% on a YoY basis.

4. aXiomatic Gaming

In October of 2018, Michael Jordan and Declaration Capital led the $26 million Series C into aXiomatic Gaming, a provider of financing and expertise for other gaming companies. This investment represented Jordan’s first steps into the world of eSports.

The leadership group of aXiomatic is impressive and filled with prominent figures from the traditional sports industry. This includes Washington Capital and Wizards owner Ted Leonsis, Los Angeles Dodgers and GSW part-owner Peter Guber, and Tampa Bay Lightning owner Jeff Vinik.

aXiomatic has a controlling stake in Team Liquid, the third most valuable eSports team with a reported value of over $300 million. Other investments of aXiomatic include Fortnite developer Epic Games, and Pokémon Go developer Niantic.

Both Epic Games and Niantic are expected to be beneficiaries of tailwinds in gaming and metaverse. The companies are currently valued at $42 billion and $9 billion, respectively.

5. DraftKings

Michael Jordan is not new to the world of gambling. The Netflix docuseries “The Last Dance” perfectly captures Jordan’s knack for blackjack and casinos. In 2020, MJ took an ownership stake in the online sports gambling giant DraftKings in exchange for becoming a Special Advisor to the company.

DraftKings offers experiences across various sports leagues including MLB, NFL, NHL, NBA, NASCAR, and UFC. The company went public in April of 2020 through a reverse merger with Diamond Eagle Acquisition.

DraftKings has majority market share in its industry, and is expected to grow rapidly over the coming years due to regulatory tailwinds across U.S states. The company also has multi-year deals with many sports leagues, including the NBA and NFL.

As of this writing, DraftKings is valued at $9 billion on the public markets. They generated TTM revenue of $1.3 billion and is growing their quarterly revenue at ~47% on a YoY basis. The company is in its early growth stage and has still not turned a profit yet.

Honorable Mentions

Some other notable investments of Jordan include NBA Top Shot parent company Dapper Labs, NASCAR team 23XI Racing, and sports mobile app Buzzer Media.