Economic Impact of Michael Jordan Term Paper

  • Length: 7 pages
  • Subject: Business - Advertising
  • Type: Term Paper
  • Paper: #39864528

Excerpt from Term Paper :

Economic Impact of Michael Jordan

) and made himself the greatest celebrity/player to have the greatest economic impact in the United States history. His fame, enigma and charisma did things for his team and his sponsors that no other sportsman could do before and that was the hype that he created in the commercial scenario (Smith, 4). His choice of Nike, the famous shoe company brought millions in the United States and abroad to buy the Nike shoes and generated a Cass flow, according to the Fortune Magazine, worth $10 billion since 1984. For instance in the following table proves the economic mobility relative to companies for which Jordan promoted products and services.

Company

Jordan Affiliation

Price

2002 Estimated P/E

Projected EPS Growth*

Market Value ($mil)

AOL Time Warner

Turner Broadcasting

Finish Line

Athletic footwear and apparel

General Electric

NBC

Nike

Athletic footwear and apparel; Jordan sponsor

Palm

Jordan sponsor

NM

PepsiCo

Gatorade, Jordan sponsor

Sara Lee

Hanes, Jordan sponsor; Champion, athletic apparel

Sports Authority

Athletic footwear and apparel retailer

Venator Group

Athletic footwear and apparel retailer

Walt Disney

ESPN

Source: Dukcevich, at http://www.forbes.com/2001/09/28/0928jordan.html

According to the report by Vinuya the Nike products promoted by Jordan generated annually more than $250 million. When Jordan announced his retirement in the year 1999 (Mills, n. p.) the stock price of the Nike Company fell by more than 4% as it was expected that the announcement of the retirement would decrease the sales of the company's products in the category of sports shoes and other sports related products. It was rather certain for many people that the retirement would bring along a negative economic effect (Wynter, n. p.).

Since his coming on the scene, Jordan has proved to be the most profitable attraction for the NBA and he presence in the team generated $165 million while the NBA earned $366 million in revenues from the television in addition to a $3.1 billion increase in the NBA-licensed goods. The "Jordan Effect" (Harrington and Johnson, n. p.) as Fortune very conveniently phrases it has increased the attendance at the Chicago Bulls Games to eighty seven percent where it is also estimated that this effect, which in fact is the effect in moving the economy, was responsible for more than 20% of the retail sales by the league since the start of Jordan's career. Jordan effect has also earned an income for the Chicago Bulls in franchises worth $200 million. From these figures, it is rather evident that Jordan is very well liked among the masses and he is also very well accepted in the American market-based economy where his endorsement of certain products, as mentioned in the table above, was the surety of increased sales figures of the products and services these companies sell. In fact, it would not be wrong to assert that with the economic money generation worth $10 billion over fourteen years, Michael Jordan did had the charisma and the power to have a powerful and favorable impact on the American economy and the Jordan Effect did prove to be correct, no doubt (Isidore, n. p.).

Many commercials, most prominently that of Nike promoting the "Just Do It" slogan for its sports apparels and products got hype due to the presence of Michael Jordan in the advertisement of these products enhancing the Jordan Effect.

During the decade of eighties and nineties, Nike took advantage of the charisma and the mystique created by the personality, team building spirit and the talent of Jordan and capitalized on Jordan's "Airness" (Beatty, n. p.). During that time, Nike capitalized by making Jordan as its front man in all their promotional campaigns of their products in the sports category and earned a name and share in the global economy. This not just made the company popular among the masses all over the world and earned hefty revenues year by year, but this also made Jordan popular in the world of sports round the globe. And with this popularity and positive image, there were other companies like AOL, Time Warner, GE, Pepsi Co. Walt Disney etc. that aired the "airness" of Jordan and earned revenues in return. And if the economic generation estimates is more than a hefty ten billion dollars then it ought not be a surprise. This Jordan Effect did promote companies hiring sports celebrities to promote their products and services and the nineties era did saw celebrities from all walks of life in this commercial globalism of the products and services. This commercial globalism in return brought in the revenues for many companies and helped move the economy for more than a decade and a half.

The impact on economy was not the one impact that the Jordan Effect had in eighties and nineties, rather there was a new link provided to the American capitalist that ventured a new era of American cultural imperialism around the globe and people came to view American nation as a nation producing pictures, Pepsi, hamburgers, sports shoes apart from manufacturing arms for the rest of the world. This was the new image that the Jordan Effect had over the world and this new image promoted the demand for the American products in all over the world that previously was dominated by the products from Japan and many European nations. The Jordan Effect made a place for the U.S. products in the world economy and at the global marketplace and has in fact terrorized the manufacturers from other parts of the world. In addition to this economic impact, there is a much more cutting edge cultural impact, that LaFeber discusses in his book "Michael Jordan and the New Global Capitalism" in which he identifies this cultural as well as economic imperialism of the Jordan Effect. He says that there is no one who is compelling the people around to world to "eat hamburgers or wear Nikes. A lot of people in France and China want to become American. They want Nike, McDonalds and Coca Cola; they want to see American television. The authorities want to filter this information, and it has stirred a lot of interesting debate within these countries about the influence of American culture. There are meetings now in the United Nations about how to exclude American culture without excluding the normal flow of trade, which is a very delicate situation" (LeFeber, n. p. (http://www.news.cornell.edu/Chronicle/99/8.19.99/LaFeber_book.html)

With respect to the economic impact of this Jordan Effect, LaFeber further notes that the figure of Michael Jordan in addition stands for a fissure in the custom of publicly as well as socially accountable sports celebrities. Hence, this fresh role corresponds with the materialization of worldwide state-of-the-art means of communication as well as interests in global big money. Crawford notes that although Jordan is not the pioneer in promoting American products and goods in the international market place as a sports man, there were other too in the line before him as LaFeber mentions Kareem Abdul Jabbar as well as Muhammad Ali and other sports celebrities, however, these celebrities, having sports origin could only act as a commercial catalyst for the economy or if taken on the extreme, these figures were transparently non-political. However, the character of Jordan, as LaFeber notes has helped and forced the image of the United States as a power at both military as well as cultural front following the Cold War time. Crawford further writes that LaFeber look at the "Jordan's "Faustian bargain," how Jordan sold himself to the media, suffered its glaring scrutiny (remember his gambling, his father's death) and, when asked to take a stand on charges that Nike subcontractors in Southeast Asia exploited workers, declined to comment. Jordan traded on his fame, and the toll has yet to be exacted. LaFeber implies that nations buying into the American way of life also enter into a Faustian contract" (http://www.news.cornell.edu/Chronicle/99/8.19.99/LaFeber_book.html).

Nevertheless, Crawford notes that whether the act of selling to the commercial giants was a good move or a bad move of Jordan, what really matters is the impact that was brought upon the American economy and American culture that had a trickle down effect over the rest of the world. The Nike slogan became for many nations and for many people in the world a sign of change and a signal to change, but many across the world realized the slogan to be an abomination to their customs. Nevertheless, what changes the Jordan Effect brought about in other cultures and apart from the negative acceptance of Jordan Effect in the world, one thing remains clear and that is the economy of America did had a positive effect and was very optimistic till the time Jordan announced his retirement.

Even if we talk only of America putting the rest of the world aside, the whole American nation was influenced by the hype created by the companies about the mystique of Michael Jordan, he was a cultural icon and enigma for many teens, boys and adults. Many people in America wanted to be like Jordan, wear Jordan…

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