David Falk was no less than a superagent, having made Michael Jordan one of the top marketing entities in the 1980s. Falk was crucial in brokering a deal between Sonny Vaccaro and Michael Jordan for the historic Nike contract. The rookie contract signing MJ for the new Air Jordan brand was worth $2,500,000 for five years. However, more or less, Falk is not given enough credit for accelerating Jordan’s brand value.
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Falk and Jordan had a close relationship. He had closely understood the needs of the young athlete from North Carolina and was willing to represent the same. During the initial negotiation phases for the Nike deal, Falk was reluctant to sign a deal with Vaccaro and Nike due to MJ’s initial infatuation with Adidas.
It should be noted that although his client became a billionaire from the Nike deal, Falk was not making enough money as expected. In an interview with CNBC, Falk revealed his earnings while representing high-profile clients such as Michael Jordan, James Worthy, and Boomer Esiason.
David Falk felt extremely underappreciated and underpaid during his time at Proserv
David Falk was associated with renowned sports agent Donald Dell and his management firm Proserv since 1974. He was a proven professional in his job, having negotiated the first million-dollar NBA shoe deal for James Worthy and Michael Jordan’s historic Air Jordan deal.
However, during all this time, he felt he was severely underpaid and underappreciated. In the interview with CNBC, Falk revealed how he earned much less than the contracts or deals he would negotiate for his clients. Falk explained,
“When I worked at Proserv, the most I ever made in a single year I think was $230,000, even though I worked with stars like Michael Jordan, James Worthy and Boomer Esiason.”
However, Falk started his venture called Falk Associates Management Enterprises (FAME) in 1992. This was right after his initial taste of success in the management field. After feeling underpaid and underappreciated by Donald Dell, he moved on to work independently. Falk later revealed that he paid more in taxes in 1996 than he had earned working 17 years for Dell. In the CNN interview, he said,
“When I went on my own in 1992, I thought I was wealthy. As the years went on, I started to think about this and I wanted to do this because to me it gives me a very tangible reward that in the end will be more of a human contribution than a financial contribution.”
Falk would later sell FAME to the SFX group in 1998, earning $100 million. However, despite this deal, he remained the group’s president. Under him, SFX bought 14 private sports representation companies, including Proserv, for a combined cost of $1.5 billion. This is how Falk found himself managing the company he left on uneven terms.
David Falk would charge as much as 20% of his player contracts and endorsement deals
David Falk had become one of the most influential and powerful persons in the NBA by the late 90s. By the early 2000s, Falk’s management group was in charge of the affairs of more than 78 NBA athletes. Falk’s professionalism as an agent and his influence gave him the agency to charge more than 20% of player contracts and endorsements.
For Michael Jordan’s ‘Air Jordan’ deal, Falk earned 20% of MJ’s $40,000,000 endorsements. This would roughly come down to him earning around $8 million from Michael Jordan’s deal alone from 1984 to 2003.
