Michael Jordan’s ‘$250,000,000 and 5 Percent Royalty Precedent’ Seeps into Hollywood

Earlier this year, the movie ‘Air’ made a lot of noise in the NBA community, perhaps the most since Netflix’s The Last Dance. Air captured the history surrounding the iconic Nike deal Michael Jordan signed when he was just a rookie. Director Ben Affleck tried to highlight in the movie how Jordan’s deal with Nike, which secured a 5% royalty from every shoe sold, revolutionized sports contracts forever and completely transformed the lives of athletes. The movie’s core-message of self-ownership was promoted vigorously by Amazon Studios prior to the release of the film in April. Now Amazon and the other predominant studios in Hollywood find themselves at the crossroads of similar demands.

The Writers Guild of America has currently brought the majority of production in Hollywood to a halt as they protest against the pay stipulations set by the Alliance of Motion Picture and Television Producers (AMPTP). The writers claim that their negotiations with AMPTP, which represents the major studios in Hollywood, have reached an impasse. WGA’s demonstrations have been going on since May and the protestors have now been joined by the actors’ guild, SAG-AFTRA.

Writers strike in Hollywood as demands for Michael Jordan’s rules gain prominence

One of the most riveting scenes from the movie Air is Michael Jordan’s mother, Deloris Jordan(played by Viola Davis) trying to convince Nike executive Sonny Vaccaro that her son deserves a cut from the gross sales of his shoe. Vaccaro tries to explain to her that that’s not how brands conduct business with athletes and that the deal Nike is offering is pretty lucrative for a rookie who is yet to do something big in the NBA.

However, Deloris remained adamant that her son deserves a cut in every shoe sold, since his hard work in the league would be the capital behind the shoe’s branding. In this clip of the movie posted by Prime Video AU & NZ, Deloris tells Vaccaro, “Michael will get a percentage of the sale of every shoe that is sold…But if he does it, he deserves to be compensated. You eat, we eat, that’s all he’s asking.”

Deloris remained indifferent to Vaccaro’s offer of a licensing fee for the athlete’s brand and refused to believe that a royalty-deal with the Jordan family would lead to a massive overhaul in the complex economics connected with a publicly-traded company like Nike. Of course, Vaccaro had to budge in the end because Nike was an up-and-coming brand at the time and MJ was their best bet to gain a foothold in a market dominated by Adidas and Converse.

Jordan’s deal with Nike reportedly brought him a staggering $256.1 million in revenue share from Air Jordan sales in 2022, which is more than 2.5 times his entire career earnings in the NBA(without adjusting inflation). While such an arrangement was touted to be a game-changer by Amazon during the promotion of Air, the AMPTP has reportedly refused 2% of the total revenue generated from their streaming projects to the writers, which triggered the ongoing strike. The writers have also voiced other demands like protection against AI intervention in their jobs.

The effect of Jordan’s deal on the modern NBA

Jordan’s legendary deal with Nike has allowed other generational talents like LeBron James and Stephen Curry to make similar deals with brands. In fact, rookie sensation Viktor Wembanyama is expected to sign a $100 million deal with Nike before even proving anything in the league, thanks to Jordan.

However, the question remains whether studios like Amazon will budge like Nike and offer the writers a fair chunk of the fruits of their creative and intellectual labor. There has been no indication of that happening so far.