That Time I Was Part of a Lawsuit with Michael Jordan
And how it informs my perspective on NIL
Back in the mid-90s when Michael Jordan was at the peak of his career, he signed an endorsement deal with MCI, the phone company. You couldn't turn on the TV without seeing MJ promoting MCI's long-distance service, telling everyone, "If you're going to be like Mike, you need MCI." It was catchy!
Anyway, things were going great for a while, MCI was happy, Jordan was happy, everyone was making money. But then, MCI merged with WorldCom and things started going downhill. Before you knew it, WorldCom went bankrupt and suddenly Jordan wasn't getting paid anymore. He ended up suing MCI for $8 million, claiming they owed him for the last four years of the contract. It was a mess, but eventually, they settled out of court.
I didn’t Google anything I just told you - I was there 😅. Literally, at the top of the Sears Tower in Chicago, being deposed.
WorldCom’s attorneys contacted me and asked me to be an expert witness. At the time, I had worked on dozens of partnerships between professional athletes of note and Fortune 500 sponsors.
In the lawsuit, MCI argued that Jordan was obligated to mitigate his damages – meaning he should have sought out other endorsement deals to compensate for the money MCI owed him. Jordan refused, on the grounds that taking on new sponsorships would dilute his personal brand.
My role was to support MCI’s position that he should be obligated to (quite easily) take on a new corporate partner. At the time, I thought that adding a 14th partnership (he had 13 corporate partners at the time) to his endorsement portfolio was not going to harm Jordan’s brand.
With the benefit of time - and a new NIL “lens - I now think I may have been wrong.
By arguing that new sponsorships would dilute his brand, Jordan was saying that the damage caused by MCI's non-payment went beyond just the financial loss. It also threatened the long-term value of his carefully cultivated brand.
Personal “brand dilution” occurs when an athlete or celebrity endorser becomes overexposed or associated with too many products or services. This can weaken their perceived value. In Jordan's case, he had carefully created an image, associating himself with top-tier brands like Nike and Gatorade. Taking on a corporate partner just to make up for lost income could have resulted in tarnishing that carefully built image.
Many high-profile athletes practice endorsement selectivity, choosing their sponsorships carefully to align with their personal brand and values. By limiting the number of endorsements, they maintain a sense of exclusivity and avoid being seen as simply chasing money. Jordan's refusal to take on new sponsors demonstrated his (and his agent’s) commitment to this strategy.
NIL and Brand Dilution
While the opportunity to earn money through endorsements and partnerships is exciting, it's crucial for student-athletes to understand the potential pitfalls of overexposure and indiscriminate brand association.
Brand dilution can negatively impact student-athletes in the NIL era in multiple ways…
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