January 9, 2008 in Business

Nike releasing Air Jordan, version XX3

Sarah Skidmore Associated Press
 
Associated Press photo

In a photo released by Nike, Michael Jordan poses with the new Air Jordan XX3 basketball shoe. Associated Press
(Full-size photo)

Extended release

The Air Jordan XX3 will be released in three hyped-up rounds from January to February.

BEAVERTON, Ore. – It’s gotta be the shoes, right?

No other basketball shoe has changed the face of business, athletics and marketing like the Air Jordan. This month, Nike releases the 23rd edition, and it is expected to be just as venerated as its predecessors.

The sleek design and link to Michael Jordan’s jersey number make it a touchstone in the line. It’s also Nike’s first basketball shoe designed under its “Considered” ethos, which aims to reduce waste and use environmentally friendly materials wherever possible.

The Air Jordan XX3 will be released in three hyped-up rounds from January to February, starting with a limited edition to be sent to only 23 retailers to be sold for $230 and concluding with the national launch at $185.

There had been talk at Nike about retiring the shoe at No. 23, because of Jordan’s iconic jersey number. But company officials won’t say whether this will be the last of the line. Neither will Jordan.

“You’ll just have to wait and see,” Jordan, who has been a part owner of the Charlotte Bobcats since 2006, said in an e-mail to the Associated Press.

Before launching the first shoe in 1985, Nike had just signed Jordan for $2.5 million over five years. Nike won’t say what Jordan’s current contract with the company is worth.

Jordan’s deal with Nike opened the door for sneaker manufacturers to chase after athletes, signing them up – sometimes just out of high school – for multimillion-dollar contracts in hopes of being able to cash in on the next superstar. It sent sneaker prices to new heights, which has since generated a backlash against selling pricey shoes to basketball-loving kids.

“The Air Jordan franchise created the most coveted basketball footwear in the world and changed the basketball landscape forever,” said Nike Brand President Charlie Denson.

Unlike most basketball shoes, which were often white and utilitarian, the Air Jordan was a shock of black and red.

It was initially banned by the NBA for not conforming with other players’ shoes.

Jordan continued to wear them and was fined $5,000 a game, which Nike paid.

“Nobody expected the mass hysteria created by its release,” Jordan said in his e-mail to the AP.

A new edition was launched each year, and release dates had to be moved to the weekends to keep kids from skipping school to get a pair.

The frenzy became dangerous. People were mugged and even killed for the shoes.

Air Jordans helped spawn a subculture of collectors who line up at stores to buy the shoe’s latest edition.

Jordan said he never expected the shoe to become an icon.

“Like every kid growing up, I dreamed of making winning shots at the buzzer and I was fortunate to live out that dream, but never in my wildest dreams did I ever entertain the idea of the success of the Air Jordan franchise,” he said.

The Air Jordans moved basketball shoes from true high-tops or low-tops to a middle range and used unheard of styles, such as patent leather toes and elephant print.

As Jordan’s success grew on the courts, so did Nike’s in the shoe industry.

People from the streets to the suburbs were wearing $100-plus basketball shoes, which was unheard of at the time.

That price is the norm today, but it has launched a backlash, such as the partnership between New York Knicks player Stephon Marbury and the Steve & Barry’s store chain to sell basketball shoes for $14.98 – a direct stab at expensive sneakers like Air Jordans.

Air Jordan was the lightning in the bottle that every company hopes for.

Advertising images of Jordan soaring across the sky were ubiquitous. Spike Lee could be heard hollering “It’s gotta be the shoes” on television. And Jordan’s outstretched arms with the swoosh nearby adorned walls across the country.

Nike quickly moved from a running company and newcomer to the basketball category to the market leader. Some industry estimates put Nike’s current share of the basketball shoe market about 85 percent. Far behind are Adidas and Reebok.

The relationship completely changed the idea of sports marketing. Companies now make athlete sponsorships the centerpiece of their business, spending millions signing them and designing product lines and marketing platforms around them.

Jordan’s original deal seems like a pittance compared to multimillion-dollar contracts inked these days, such as Nike’s $90 million agreement with LeBron James.

“The beginning of the Jordan era marked a new and more sophisticated approach to leveraging an athlete,” said Paul Swangard, managing director of the Warsaw Sports Marketing Center at the University of Oregon.

Like any bet, athletic companies take their risks – some pay off, like Tiger Woods or LeBron James.

But some don’t, a la Michael Vick.

Nike terminated its contract with Vick last August after his plea agreement on dogfighting charges.

© Copyright 2008 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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