Michael Jordan

The move

1984. Michael Jordan is a 21-year-old rookie, and he wants Adidas. They were the brand of basketball royalty. Kareem. Magic. Adidas's offer for the No. 3 draft pick is weak. Converse, the league standard, offers standard money. His parents tell him to take the Nike meeting.

Nike is a running brand. No real basketball presence. They offer Jordan something no athlete had ever been offered. A piece of his own line. The Air Jordan. A signature shoe with profit share, royalties and a say in the design. That kind of deal didn't exist in 1984.

The NBA bans the original red-and-black Air Jordan 1 for breaking its uniform rules. Nike pays the $5,000 fine every game and makes a TV ad about it. The shoe does $126M in year one. The plan said $3M.

Jordan retired in 2003. The Air Jordan brand didn't. Forty years on it's a $5.7B-a-year business, bigger than every basketball brand except Nike itself, which it sits inside. The Jordan name doesn't just outsell the rest. It is the category.

Why it was risky

Adidas was safe. Converse was the establishment. Nike was a small running brand trying to get into basketball on the back of a kid who hadn't played a single pro game. The brand bet its basketball future on one person. The person bet his earning power on a brand that didn't exist yet. A cut of the profits, royalties and a say in the product, for a player? That was for team owners.

The numbers

From a $3M sales plan to the most valuable signature deal in sport. Forty years of owning a piece of it turned a rookie's risk into money that keeps coming in.

The lesson

The shoe was the easy part. Asking for the equity was the bet. Jordan and Nike rewrote the deal between athlete and brand by building ownership into it, and a 21-year-old's signature became a category that outlived his career. R.I.S.K. is for people ready to negotiate for the upside instead of the safety.