Michael Jordan’s identity carries a “fair market value” of about $10 million for a deal, and more than a decade after the Chicago Bulls great retired from pro basketball, his endorsement income surpasses that of many top players, a sports economist testified Monday.
Andrew Zimbalist, a Smith College professor who has consulted for players unions, teams, leagues and states about sports economics issues, was the first witness to testify Monday morning in Jordan’s federal court case in Chicago against the defunct Dominick’s grocery chain.
Dominick’s used Jordan’s identity without permission in a 2009 print ad, and a federal jury is due to settle the only remaining question in the case: Just how much will Dominick’s owner Safeway have to fork over to Jordan for the unauthorized use of his image?
Zimbalist testified that Jordan’s endorsement income in 2012 was more than $75 million — about double that of LeBron James and Kobe Bryant, two of today’s standouts. He also noted that Jordan’s endorsement income has only grown over the years. It was $28 million in 2004, a year after he retired from professional basketball.
Zimbalist acknowledged that he was being compensated to testify Monday at his customary rate of $850 an hour but said he calculated Jordan’s fair market value by reviewing his endorsement deals over the years.
He also shared how image-conscious Jordan and his team are, occasionally turning down deals that don’t fit the image he wants to cultivate, like offers from Jim Beam or from a headphones company that he didn’t consider age-appropriate. The headphones company was offering to pay him nearly $80 million over 10 years, and give him a 10 percent royalty on sales and a 10 percent stake in the company if certain goals were met.
By limiting the supply of the deals, Jordan’s value is kept up, Zimbalist said. Since 2000, Jordan’s typical endorsement deal has exceeded $10 million, Zimbalist testified.
Jordan was in the courthouse, wearing a dark beige suit, often looking pensive with his head in his hands leaning on the table, typically looking directly ahead and seldom at Zimbalist.
Jordan remains among the most popular athletes years after his retirement, Zimbalist said, citing a “Q score” that measures the popularity of celebrities. As recently as 2010, Jordan had a Q score of 51, with the next-highest athlete having a score of 41.
In 2009 — the year of the Dominick’s ad — Jordan had a Q score of 50, Zimbalist said.
A second witness testifying Monday also attested to Jordan’s reach. Curtis Polk, a business, legal and financial adviser to Jordan and vice chairman of NBA’s Charlotte Hornets, said Jordan made more than $100 million from the marketing of his image in 2014. He said that figure has increased steadily since 1998.
Just two customers redeemed $2 coupons for steaks attached to the advertisement in a commemorative edition of Sports Illustrated. The ad declared “Michael Jordan … you are a cut above.”
But that didn’t stop Jordan from suing Dominick’s for $10 million, or a federal judge from finding that Dominick’s was liable.
U.S. District Judge John Blakey has ruled that limited details from Jordan’s endorsement contracts with Nike, Hanes, Upper Deck and Gatorade — including the size and basic terms of those contracts — can be used as evidence by Dominick’s, which argues that Jordan’s $10 million demand is much too large for a single print ad.
The jury’s decision may affect a related case Jordan brought against another supermarket chain, Jewel-Osco, which he also accuses of illegally using his identity in the same commemorative edition of Sports Illustrated.
Both supermarkets were offered free ads by the magazine in return for a promise to stock the issue commemorating Jordan’s election to the Basketball Hall of Fame. The Jewel case is set for trial in December.
byerak@tribpub.com
Twitter @beckyyerak
