FORTUNE Calculates Michael Jordan's Impact on Economy; Estimates 'The Jordan Effect' at $10 Billion - and Counting
NEW YORK, June 1 /PRNewswire/ -- Everyone knows that the world's greatest basketball player is also one of its most recognizable brands, but for the first time, FORTUNE has calculated the economic impact that Michael Jordan has had since joining the NBA in 1984. "Beyond his own vast (and growing) personal fortune, if you add up all the Jordan-influenced business -- the sneaker and apparel sales, the higher television ratings, the increased game attendance, the endorsement value, the videos, the cologne, and the rest of it -- what is his overall impact?," FORTUNE editor at large Roy S. Johnson writes in the June 22 issue. The magazine's estimate: more than $10 billion. FORTUNE primarily examined several key entities affected most directly by Jordan: the NBA, Nike, and "branded" products and companies whose products Jordan endorses. The magazine used several methodologies for its calculations, including some created by economists Jerry A. Hausman of MIT and Gregory K. Leonard of the consulting firm Cambridge Economics. Their findings on the economic value of several NBA superstars to the NBA during the 1991-92 season were reported last year in the Journal of Labor Economics. The branded products category included cologne, underwear, the myriad sports videos and books produced and written about Jordan, and the revenue from the movie Space Jam, starring Jordan. Total estimate: $701 million. Using some of the Hausman-Leonard techniques, FORTUNE calculated Jordan's impact on NBA attendance to be $165 million, and on the league's television revenues as $366 million. Using other methods, the magazine estimated Jordan's impact on the growth of the NBA's licensed products ("official" caps, shirts, jerseys, etc.), at $3.1 billion. As hard as it may be to calculate Jordan's overall impact on Nike (a former company executive describes him as the embodiment of Nike's image, and what, FORTUNE asks, is that worth?), the magazine estimates it at $5.2 billion, including $2.6 billion in the still-popular Air Jordan sneakers and other Jordan-related Nike products. FORTUNE estimates the Jordan Effect on the companies whose products he endorses at $408 million. Finally, the magazine adds another $50 million, roughly half the price of F.A.M.E., Jordan agent David Falk's agency, which recently sold for about $100 million, bringing the total estimated Jordan Effect to more than $10 billion. As for Jordan, he says he's at a stage of his life where he's ready to pare down some of his business obligations. "When people come to me with deals now, I've got no problem saying no," he tells Johnson. "I've got enough on my plate. I'm not greedy."
SOURCE FORTUNE Magazine
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