Ep 41: Nilke's Story - Part 5: How Michael Jordan Made Nike a Global Empire

Most people know Nike as the world's biggest sports brand. Few know how close it came to missing the opportunity that changed everything.

In the final episode of our Nike series, Daniel Wood brings together every chapter of Phil Knight's remarkable journey—from a young entrepreneur with an idea to the company that transformed the sports industry forever.

This episode follows Nike through its defining years as the company builds its identity around fearless athletes, beginning with Steve Prefontaine and culminating in one of the greatest marketing decisions in business history: signing a young Michael Jordan before he had played a single NBA game.

It was an enormous risk.

Nike invested nearly its entire basketball marketing budget on one rookie who actually wanted to sign with Adidas.

The rest became history.

In this episode, you'll discover:

✔ How Steve Prefontaine shaped Nike's culture and identity

✔ Why Prefontaine's legacy still influences the company today

✔ The challenges Nike faced entering the basketball market

✔ Why Michael Jordan initially wanted Adidas instead of Nike

✔ How Nike convinced Jordan to take the meeting that changed history

✔ The creation of the Air Jordan brand

✔ The bold business lesson behind betting everything on one extraordinary opportunity

This episode is more than the conclusion of Nike's story.

It's a masterclass in conviction, calculated risk, branding, and believing in a vision long before the rest of the world does.

Whether you're building a business, leading a team, or pursuing an ambitious goal, Phil Knight's journey proves that the biggest rewards often come from the biggest bets.

🎁 Free Gift for Listeners

Join the Swedish Wealth Institute Community and connect with entrepreneurs from around the world.

Start with your complimentary two-week trial:

https://event.financialfreedomsummit.online/wealth-creation-movement-sp-4974

✨ Enjoyed this episode? Don’t forget to subscribe to The Swedish Wealth Institute Podcast so you never miss new conversations with world-class entrepreneurs, investors, and changemakers.

👉 Join the SWI community: www.swedishwealthinstitute.com

👉 Follow Daniel Wood on social media: Instagram | Linkedin | Facebook

👉 Follow SWI on social media: Instagram | Linkedin | Facebook

⭐ If this episode inspired you, please rate and review the podcast on Spotify or Apple Podcasts — it helps us reach more people on the journey to wealth, freedom, and impact.

Transcript

SPEAKER_00 0:00

Nike couldn't afford that. They couldn't go after that many. They didn't have a lot of it. They needed to make a big bet, and they needed it to go well. So the car said, you know what? Let's just go for the time. Let's spend our entire athlete budget on this young kid, Michael Jordan. Now, at the time though, it didn't make sense. First off, Michael Jordan wanted to play for Adidas. He wanted Adidas decide. He wasn't an established star, blowing the entire Welcome to the Swedish Wealth Institute podcast. I'm your host, Daniel Wood, and welcome to our final episode on Nike. This is, to me, one of the most inspiring journeys of entrepreneurship. How Phil Knight came up with the idea of Nike by looking at a different industry, right? He was looking at cameras and going, Well, if the Germans can be undercut by the Japanese manufacturing, why not do that in other things? And obviously, as a runner and his background and being trained by Bowerman, who loved experimenting with shoes, he saw there was an opportunity for innovation. He saw that lower price would make an impact. And well, he wrote it as his Stanford paper. He went to Japan on his world tour as a kid. He met with Onitsuka, and without even owning a company, he convinced them to make him their distributor for North America. From there, he had to wait two years before he actually got his first shoes, but then was able to convince Bill Bowerman, his coach, to come on as his partner. They started, well, what was then Blue Ribbon Sport. They ordered shoes and Phil started selling. They sold, they brought in Jake Johnson, who opened their first retail location. They kept expanding. Five years later, you know, Phil leaves his job as an accountant, goes full-time into Nike. They get thrown out of their first bank bank. They later get thrown out of their second bank. They have the problems with Onitsuka, who don't want, you know, who want other distributors and uh who don't trust the Blue Ribbon sports to be their distributor. They want to grow and create more brands. Bill Bowerman writes the book Jogging that makes the sport of jogging explode, and is why we go out running today. And he invents the waffle shoe, which takes the you know, which just creates completely different grip, takes the world by storm. They do it with the Nike brand, and thanks to a Japanese trading company, they're able to get new manufacturing for their own brand, their own shoes. There is lawsuits with Onitsuka on stealing brands, on breaking contract. All of that mess is going on. And Nike, which is now Nike, which came because Phil did not have more time to deliberate, and they had the swoosh created by their designer for her fee of $35. Again, she actually got you know a couple million dollars worth of shares in the end. So she's fine. That became the start of Nike. They started selling shoes, they started expanding, and decided they needed to get athletes to sponsor them because their shoes had a certain quality, right? They were they were cheap to make, they had a quality because they had international manufacturing and they worked. So a lot of the athletes used them, they just weren't sponsored by them. So when the game started, they had to switch shoes. Now, Nastase, the tennis star, was their first. But the one that was the most central to the beginning of Nike was Pre. Prefontaine. So let me share the story of Pre. So Steven Rowl, Steve Roland Pre-fontaine was born in 1951 in Oregon. So he was a local kid and he was special. So he hated being ordinary. He would outwork everyone else. So as a freshman in high school, he was not even the best runner on his local high school team, but he outworked everyone else. And by 15 years old, he ran the national high school record for 3,000 meters. Back then, that was eight minutes, 41 and a half seconds. And during the final two years of high school, he was unbeaten in cross-country running. So obviously everyone wanted him, but Bowerman was the guy in running. He he had he would end up in his time. He had the most sub was it, four-minute mile runners of anyone. And Pre was from Oregon and decided to join Bowerman. So this was in 1969, and he was pushed. You know, Bowerman pushed hard. He wanted you to be really, really good. He cared about the training, the recovery, the shoes, biomechanics, surface, all of this. And of course, the mindset and psychology. Now, pre was disp different. So running, which most runners don't know, but I I well, I shouldn't say I'm definitely not a runner. So don't take me as that. But I have run a marathon, I've done a few triathlons, I've done a half. So I have a little bit of experience of the pain of running. And what it turns out is it's not just, you know, you don't just get up and run. There's strategy involved in this. And when you're doing that, when you're racing, you conserve your your energy by by you know being behind someone, right? Getting a little less air, you let someone else pull. Pre never did that. So Pri's whole thing was that he would run. He would go to the front, he would run as hard as he could, and he would dare everyone else to try to keep up. He wanted to show you that he would not beat you by strategy. He would beat you because he was better. So he would it was this worked in college. He won seven NCAA titles and he crushed, you know, the three-mile run. And overall, so according to Nike history, he won 35 of 38 races. And the thing was, again, he wasn't running the strategy. He was crushing. So he became, he became a bit of a myth, right? It was defying the rules, being fearless, doing it your way, right? It was a show. And this is important because this is what attracted Phil. Phil became a diehard pre-fan. And he wanted to work with him. He he just wanted to help him. He wanted to be a part. Now remember, back then in college, kids were not allowed to earn money from their sports. So you couldn't sponsor them, you couldn't uh give them stuff, he couldn't be a part, but he could be a fan. And that was what Phil was. Now in 1972, Pre qualified for the Munich Olympics and 5,000 meters. So he was 20 years old, 21 years old, and he was race racing, you know, experienced runners. And Pre, as always, did not follow the rules. He ran and he actually takes the lead with 1600 meters to go. So about a third of the race left, and he goes, he pushes. But the last lap is where he collapsed. Finish runner Virin wins. Mohammed Ghamoudi takes second, and Ian Stewart takes bronze. And pre-fontaine finished fourth. 1328.4, and he was less than a second behind Ian Stewart for the bronze. Now, what's kind of cool about that is this became a part of his mythos about doing it your way, about never giving up, never surrendering or surrendering, and not running by the rules, even though that cost him his win. Now, the good thing is, as soon as Pre finished college, then he could start working with Nike. And he actually became a sales sales consultant, essentially, as their sponsor. So they would, he would travel to schools, to colleges, running clubs, stores, and talk about running and work with young athletes and start building up the dream of running and what Nike actually meant. And this was this was powerful because this started building relationships at a deeper level than Jake Johnson could do. Jake became their friend, right? That was his whole thing. He knew everyone and he was sending letters with everyone. Pre was this mythical figure, the athlete, the star who was there, who would show them, who would teach them, who would coach them, and would recommend them Nike. Of course, just because college was over was not the end of Pre's running career. He was aiming for the 1976 Montreal Olympics. So he knew that he had screwed up in Munich. Four years later, he was gonna win. But on May 29th, 1975, Pree Fontaine wins a 5,000 meter race. Later that night, he was partying with other athletes. He leaves after midnight, driving his car and he crashes on Skyline Boulevard. The car flips, he's trapped underneath, and Pre-Fontaine dies at the scene. He's 24 years old. The place is now known as Pre's Roth. This shook the running world, it shook athletes all over the world. It shook Nike and it shook Phil to the core. And this was this was Pre, this was their hero, who also was their biggest champion. This could have been a huge end to to Nike, you know, stop their momentum. And it almost did. But they they kept fighting, they kept going, and they vowed to never forget pre. And so that became one of the the ethoses of Nike is to push, is to attack, is to never give up, is to be pre on on the track, even if you end up losing like he did at the Olympics, you lose on your own terms, not on their terms. This takes us a few years into the future. Almost a decade. Nike has over this decade grown. They have signed many, many athletes. They were they were huge in running, right? They had taken over running, they they were moving into other sports, but one they just couldn't get into was basketball. Converse owned basketball back then. They had Magic Johnson, Larry Bird, Julius Irving. And if you're not gonna wear Converse in the NBA at the time or playing basketball, you're gonna have Adidas. Adidas was, you know, the top sports shoe in most sports. Nike was just a running shoe. Jordan loved Adidas. They needed to do something because Nike was having problems. They were trying to grow, grow in more than just running. They were overextended. They needed to get into basketball because they needed to make their shoes cool. Now, what most brands did back then was they would sign many stars and they would grow the brand and grow those stars. That's how Converse over time ended up with Magic Johnson and Larry Bird and Julius Irving and other athletes. Nike couldn't afford that. They couldn't go after that many. They didn't have a lot. They needed to make a big bet and they needed it to go well. And this is, of course, where in the movie, if you've watched the movie of Nike, this is where Matt Damon's character comes in, Sonny Vaquero. So Sonny Vaquero is uh he is their basketball, you know, guru, right? His his job is to grow the the the team of basketball and and get that working. Now he realizes yes, we need to get one star, but we can't go after an established one. We're not gonna be able to pull them over. So he started looking at the 1984 class. He sees, look, there isn't, there are a few rookies we could sign, we could bet on multiple, see who goes well, build this brand slowly, but they he didn't have the time. Phil was breathing down his neck. Phil was saying, you know, are we gonna shut this down? So Vicaro said, you know what? Let's just go for the top. Let's spend our entire athlete budget on this young kid, Michael Jordan. Now, in retrospect, obviously, this is a brilliant, brilliant decision, right? Who better to sign than Michael Jordan? Now, at the time, though, it didn't make sense. First off, Michael Jordan wanted to play for Adidas. He wanted Adidas to sign him. Second, Michael Jordan wasn't, he hadn't played in the NBA. He was a kid. But yes, he'd done great in in you know as in high school and stuff, but he wasn't, he, you know, he wasn't an established star. Blowing the entire budget is a huge, huge, huge risk. So the negotiation begins. So everyone, everyone did want Mike, obviously, but Converse had problems because they already had Magic, Bird, Dr. J. So they could give Jordan money, they could give him the Converse brand, but he wouldn't be the guy, right? He would be one of the guys. Now, for Adidas, the problem was that Adidasler had passed away. And so his family were right now kind of fighting about who was going to take over and what was going to happen with the company. So they didn't have the full focus on who to sign and what to sign. And basketball wasn't their core business anyway. So they they made a bid, and they made a pretty good bid for Mike, but they didn't go all the way for Jordan. And David Falk, who was Jordan's agent, turned to Mike to turn to Michael Jordan and said, Look, we need to have this meeting. And so Sonny Vicaro brought in Rob Strasser, who was the guy who's going to do a lot of this negotiating. And Falk actually is the one who called Jordan's parents parrots. Yeah, parents, sorry, and uh tried to talk to them about looking at this offer seriously. Now Michael, Michael was a good kid. He respected his parents, he looked up to his parents, and when his mother, Dolores, told him, You need to listen. You don't need to sign, but you need to take the meeting, he did. So they fly him out to Beaverton and they make a whole pitch. They built a highlight reel set to the Pointer Sisters song Jump. They told him that they would build him his own shoe. They show him some of the some of the designs. Jordan doesn't like the colors. He thinks it has too much red and black. He's calling it devil colors. And so they say, okay, we will change it. Right? So the pitch here, which the Jordan family is looking at and David Falk is looking at, is you can be one of the stars with Converse and with Converse, right? You can be on that same level. Nike says, look, you're gonna be the star. You are not just Magic Johnson or Larry Byrd, which is crazy to tell a kid at that time. But David Falk also comes up with the name. So David Falk is actually pushing for this. His agent suggests, why don't we care the shoe call the shoe Air Jordan? And this comes from partially, obviously, Jordan's you know ability to essentially fly. It also comes from Nike that had this air technology in its shoes. So it kind of comes together beautifully. And so Nike offers Jordan by far their biggest offer ever. It was five years, $2.5 million, which apparently won a Guinea's world record because it was listed as October 26, 1984. It was worth three times as much as any other NBA endorsement at the time, which basically is also why Converse couldn't counter it. Because if they were going to give Michael Jordan 2.5 million over five years, they'd have to match it with Magic Johnson and Bird because you know they're the real stars. So Nike went all in and they do it. And well, the rest is history. Michael Jordan becomes the Nike spokesperson. He starts wearing the Air Jordan shoes, and Jordan crushed his first season. And now there were some rules in there, right? Nike could back out if he turned out to be a flop, but Michael Jordan averaged over 28 points per game. He won the rookie of the year, became an all-star, and was already a star on the field. Now, one thing that is pretty cool is there were rules to how your shoes had to look on the field. They had to be white. They were only allowed to have a limited amount of color. But the Air Jordans had too much color. They had too much of that red and black, and they worked with Michael, obviously, so he would like them. But that meant that every game he stepped on, he actually got fined for wearing the shoes. So Nike covered those fines. This made it a whole deal, right? It was something it was talked about on TV after the game, as well, of course, Michael being the star that he became. Nike and Air Jordan went down to grow like crazy. The Jordan brand has become a whole incredible growth and explosion. They dominate the athletic wear and sports. And it all started with a kid that loved to run, that loved to compete, that got cut from his local baseball team, that wanted to show his coach that he could be special, even though he wasn't as good a runner. He wanted to show his dad that his idea wasn't crazy. He wanted to show the world what he could do. And he kept every time putting all of his everything he could into his dream. He placed bet after bet and he won. Phil Knight is not your average CEO. He's not your average person, but he did it. And I am very happy that you joined me on this journey because to me, this story is an inspiration and one we should all hope to emulate as entrepreneurs. And so I hope you took something great from this story. Next week, we're going to be going back to our normal interviews. I have uh during this period of making this special show of Nike, I have interviewed some absolutely amazing people. So next week we'll be back interviewing Celine DeCosta, John Gray, and other absolutely amazing authors and absolute superstars and bringing you that here through the show. I want to thank you so much for joining us here today. And as a thank you, I want to say that I have a gift for you. I would love it if you subscribe to the show, you know, just like thousands of people have done all over the world, either through YouTube or any podcast platform that that you use, like Spotify, Apple Podcasts, Google Podcasts, whatever you like to listen on. And if you want to give us a review, obviously a five-star review would be appreciated. That would be amazing. Now, I also want to let you know that, like I said, I have a gift for you, and we've actually built a new easier-to-use version of our events page. So we'll link to that in the show notes. It's Swedishwealthinstitute.com/slash events. It's a lot prettier now. I hope you'll agree. Let us know in the comments. And we have three events for you right now that you can go and register for. One is a live event in Stockholm. If you can come, that would be amazing. We're going to give you a free ticket to see Ken Honda and Janet Atwood. And we have two further events. One, the 23rd to the 26th of July, which is a virtual event for the European time zone featuring speakers like the author of Men Are From Mars, Women Are From Venus, John Gray, the creators of Chicken Soup for the Soul, Jack Black and Mark Victor Hansen, both of which have been on the show, and John Gray is one of our soon-to-be-coming out episodes. We got Janet Atwood, we got Marcy Shimoff, we have uh Brian Tracy, Dr. John D Martini, Nick Voyacich, Rob Moore, and many, many, many other absolutely amazing speakers. So I hope you're excited for that. And the week after the 30th of July to the 2nd of August, we're bringing the same lineup for the new North American time zone. So whichever, wherever in the world you are, pick your time zone, pick your event, and I hope I see you there. Thank you so much for joining us. This was the Swedish Wealth Institute podcast. I am Daniel Wood, and I appreciate you spending the time with us. Thank you.