On August 24, Bloomberg published an article titled "Michael Jordan Is the Richest Basketball Player Ever With $3.5 Billion Fortune." And every single day for the last few weeks we have gotten a half dozen emails and just as many DMs from people telling us our $2.6 billion Michael Jordan net worth estimate is out of date and needs to be updated.
Generally, I'm a fan of Bloomberg's articles and authors. They tend to publish high-quality, fact-based articles that are easy to understand even if you don't have a finance degree. However, in this case I think they missed the mark. Michael Jordan is certainly the richest basketball player in the world, and the richest athlete in the world. But there's no math that justifies his net worth being $3.5 billion…
(Photo by Uri Schanker/GC Images)
Breaking Down Michael Jordan's Wealth
During his NBA career, Michael famously earned just $90 million in NBA salary. Clearly salary was not his ticket to the billionaires club.
Endorsements have certainly contributed healthily to Jordan's fortune, but still not quite enough to make him a billionaire. To date, Michael has earned $1.6 billion (pre-tax) from endorsements. That includes the roughly $200 million he's making every year in Nike royalties.
Michael earned billionaire status thanks to his very wise investment in an NBA team. And to keep things simple, I'm going to refer to the team he bought as the Bobcats (even though when he first invested they were the Hornets). Michael bought a stake in the Bobcats in 2010 for $175 million. At the time of this purchase, the Bobcats were worth $233 million overall. By 2014 Jordan had upped his stake to 90%. That same year, the LA Clippers sold for $2 billion. Before this sale, the Bobcats were worth $500 million. The Clippers' value pushed the value of the Bobcats up to at least $600 million, maybe even closer to $800 million. Let's go with $700 million. Using $700 million, Michael's 90% stake was worth $630 million. Combined with his other wealth, on June 12, 2014, the increased Bobcats valuation officially made Michael Jordan a billionaire for the first time.
Over the next few years Michael reduced his stake back down to 80%, selling primarily to hedge fund manager Gabe Plotkin.
On June 16, 2023, Michael sold most of his stake in the Bobcats to Gabe Plotkin for $3 billion. We had previously estimated he kept 10%, Bloomberg says he "kept a less than 5% interest." So let's go with that 5% number.
Prior to the $3 billion sale, Michael's net worth was $2 billion. Out of that $2 billion, $1.2 billion was the paper value of an 80% stake in the Bobcats at a $1.5 billion valuation of the Bobcats (that's the valuation used when Plotkin invested in 2019). The $1 billion difference is Michael's wealth outside of the Bobcats.
When Michael sold 75% of the Bobcats to Plotkin at a $3 billion valuation, that equates to $2.25 billion pre-tax. It's a long-term asset and Michael lives in Florida, a state with no state income tax. After removing his cost basis, it's highly likely that Michael's after-tax windfall from the sale was $1.6 billion. That adds $400 million to our previous $2 billion net worth estimate, bringing his net worth up to $2.4 billion. If Michael still owns 5% of a team that's worth $3 billion, that stake is worth $150 million. That bumps his net worth up to $2.55 billion.
When it's all said and done, in the immediate aftermath of the $3 billion sale, we bumped Michael Jordan's net worth to…
$2.6 billion
I simply can't fathom how Bloomberg is coming up with an additional $900 million in wealth to justify their $3.5 billion number. And their article gives no clues. I respect Bloomberg, but this article misses the mark. It reads like someone had just watched "Air" (which is basically a fantasy film due to the many, many historical inaccuracies) and then fleshed-out Michael's wikipedia page.
The article mentions how his first deal with Nike was a five-year contract worth $2.5 million and how his mom was integral in getting Michael to take Nike seriously. It mentions how the Jordan brand generated $5 billion in revenue for Nike last year, 11% of the company's overall revenue. It mentions that Michael was earning between $15 and $20 million per year from endorsements in the early 1990s and that he's been on the cover of the Wheaties box 19 times, "more than any other athlete." The article also references LeBron James as having a net worth of $1.5 billion, which is yet another total fantasy number.
The article has a quote from a financial analyst at BMO Capital Markets which controversially states:
"Jordan the person and Jordan the brand have helped shape Nike as well as the entire athletic apparel landscape."
Whoa dude. Careful what you say! That statement has some teeth!
Bloomberg mentions Michael's NASCAR sponsorship and his position as an advisor to the board of Draftkings. It quickly mentions the overall terms and history of the Bobcats sale. But nowhere in the article do I see a breakdown of how they can possibly justify a $3.5 billion net worth.
The basic math just doesn't add up.
FYI, Forbes currently estimates Michael's net worth at $2 billion. That's up from $1.7 billion a year ago.
