Sports Biz with Darren Rovell

Michael Jordan: Still "Marketing" Success

Basketball shoe sales aren't that hot right now. Even Nike -which has 86 percent of the U.S. market--and has been up as the market has continued to decline, saw a double digit decline in the fourth quarter, according to analyst Matt Powell of SportsOneSource.

In January, Powell notes the performance basketball shoe category was down 30 percent and the usually strong retro basketball shoe category saw a 25 percent decline.

But in all this is one amazing note from Powell:

"Top sellers (in basketball shoes) were ALL Jordan styles, led by the Retro 8 ($137), the Spiz'ike ($173), The Air Force 1/Jordan 12 hybrid ($144), the Melo M4 ($118), the Big Fund ($108) and the Collezione 13/10 combo pack ($307)."

Yes. You got that right. Michael Jordan played his last game in April 2003 and yet he's still tearing it up in 2008. In fact, about 40 of the top 50 basketball signature shoes in 2007 were Jordan styles and the Jordan brand is a $800 million brand.

As part of my hour documentary on Nike, which debuts tomorrow at 10 p.m. and 1 a.m. ET, I spoke to Jordan about his amazing success. Here's a preview of our conversation.

Darren: So in the beginning, it could have been adidas or Converse and not Nike?

MJ: The thing is I never wore Nike shoes until I signed the Nike contract. All through college, we wore Converse. And up to that point, my favorite shoe was an adidas. And at the time everybody was starting to recruit me, I was pro-adidas the whole time. Nike offered me the opportunity to have imput in designing the shoes I wanted to were. But I was very loyal. I went back to adidas and said, "Look, this is the Nike contract. If you come in and we're close, you know, I'll sign with you guys -- hands down. And they didn't feel like it was worth it, which in hindsight is perfect for me because it made my decision much easier.

Darren: About 10 years ago, the Jordan brand became its own subsidiary and you got your logo, the Jumpman. What did that do for you?

MJ: It gave me my own identity. Nike knew its brand was strong. They wanted to create a sub-brand that was just as strong. So now you got a two-headed monster going at that whole market. What we were able to do was capitalize on the high end of the business and we've been able to dominate the business in the everything over $100 space.

Darren: I get reports that say that the Jordan brand continues to dominate this premium shoe market. Why did people buy Air Jordans then and why do they buy them now?

MJ: I think initially it had a lot to do with my impact on the basketball court. And then that translated to everything off the court. But then it was the quality of the shoes that we were building. I mean, it always had a sense of style about it and it was totally different from what you see in the marketplace. And I think that has allowed us to transcend over time and one of the reasons why it has lasted for 23 years. One -- it's gotta be hip. Two -- it has to be done with the highest of quality and three, it represents the best in basketball and those are three things that we've earned.

Darren: Not many people know the story about the Jordan X. That's when you go to baseball and the designer you work with Tinker Hatfield basically thinks the franchise is over and he doesn't loop you in on the process because he thinks you probably have moved on. After production starts on it, he brings the shoe to you before it is to come out and he says what do you think?

MJ: I told him the shoe didn't pass because I wasn't looped in.

Darren: So Tinker actually then made a couple changes to the shoe at the last minute. You scared him.

MJ: I did. Because I felt like this is the first time something was going to hit the market that I didn't approve. And you know, everybody kept trying to talk me into saying, 'Hey, well, we learned from this. Let's move on.' I said, 'Let's go back.' Because I don't want something that misrepresents me in the market.

Darren: What do you think about the people who collect Jordans?

MJ: I think for those people, it's about a sense of respect. When someone buys a car and they drive it once a week or they may get the first one that's never been on the market and they save it. You don't put many miles on it because you know it's going to be valuable down the road. We want to build a product like that, that people treasure. You still need to make your shoes for the people that will play basketball in it, but for the collectors to look at this product and now they want to collect it instead of wear it, that's a precious feeling.

Darren: The main Jordan XX3 is coming out Feb. 23. On Feb. 22, are you feeling any pressure?

MJ: No. Because we do what we have to do. We meet four times a year from the conceptual start process all the way to the finished product. We meet four times going over the product constantly. Wear testing and all that. So we have done all what we felt like we needed to do. It's up to the consumer to say, "Okay. Either we like it or we don't."

Questions?  Comments?