Michael Jordan was such a star in the 1980s that people were willing to bet their life on his success. Sonny Vaccaro, an executive at Nike during the time convinced Nike to go all in on him. Of course, MJ entertained this idea even if it meant that it would sabotage his future “best friend” Charles Barkley‘s deal. Not a very friendly thing to do, to steal your friend’s first sponsorship deal. He might have made up for that with a stock tip worth $20 million though.
Sonny Vaccaro had one chance to turn the fortunes around for Nike. At the time, the Oregon-based shoemaker was struggling. Facing stiff competition from Converse, Reebok, and Adidas, it looked bleak for Nike. Vaccaro, however, went and found an athlete so mercurial, he was willing to bet everything. Including the whole company’s future.
All of it over a hunch. Yes, Sonny wasn’t entirely sure of the fact that MJ would make it. It wasn’t something out of the norm for Vaccaro though. He was used to paying coaches with his own money to get a better insight into prospects.
Sonny Vaccaro’s “Hunch” helped Michael Jordan get a contract while denying Charles Barkley one!
So, during the mid-1980s, Nike was looking to expand its athlete roster. It had failed to get the rising talents of the current generation. The likes of Magic Johnson and Larry Bird, all signed on with Converse.
As per an excerpt from the book, Michael Jordan: The Life by Roland Lazenby, Sonny was all aboard the Jordan hype train well before anyone else. Sonny said,
“Back then, Michael wasn’t glorified, glamorized, He was very good, but he was seen as another guy on Dean’s team.”
But he was convinced of Jordan’s future. So much so that he convinced the company to not sign any athletes. This could have been the move that sunk Nike, instead, it helped them become the largest sportswear company in the world.
“My point was, whatever money we had, give it to him. Rob listened to me. That’s when Rob asked me, ‘You gonna bet your job on it?’”
Vaccaro was sure of it. Even if it meant losing his job. This move cost athletes like Charles Barkley huge deals with Nike. Something that Jordan inadvertently did. He might have given him a huge stock tip to compensate for the hit later on!
How Charles Barkley made $20 million thanks to Jordan’s advice
Michael Jordan being the savant in investment that he was offered Charles Barkley some sage-like advice. He told him that instead of taking a contract offer worth $3 million.
He instead advised Charles to give up on the sum in cash, only take $1 million and instead take stock options for the rest. Barkley thought about it and consulted his legal and financial team over it. Eventually, he took up Michael’s advice.
Barkley said he made 10 times more money than if he would have taken the cash deal. Which presumably means he made approximately $20 million. Not bad for a stock tip.
But the real gist of the story is how Jordan, might have, thanks to guilt, given Barkley that advice. Chances are he knew that when he signed to Nike in 1984, he was effectively kicking all the other athletes out, including Charles.
So to make up for it, he gave him a fantastic tip.