When Michael Jordan joined them in the autumn of 1984, the Chicago Bulls were on the ropes. They had won twenty-seven and lost fifty-five games the previous year. A typical crowd filled only one-third of the Chicago Coliseum’s seats. The franchise’s estimated worth was $18.7 million—only a fraction of some other franchises—and dropping. Television audiences were disappearing.1
Within the next ten years, Jordan became the most widely recognized and probably wealthiest athlete on earth. The Bulls sold out the old Coliseum, then their new United Center, and had thousands of names on a wait-list for season tickets. The franchise’s worth exceeded $190 million and was climbing. The NBA meanwhile became a television goldmine not only in the United States, but globally. It was quite a decade—an era made possible by Jordan’s athletic skills, his marketing instincts, a new type of corporation exemplified by Nike, and the technology of communication satellites and cable that made the globe into one mammoth television audience.
The outlook was not rosy in 1984–1985. Jordan had led the 1984 U.S. Olympic team to a gold medal in men’s basketball. He charmed hundreds of millions of television viewers when he placed his gold medal around Deloris Jordan’s neck. The publicity that trumpeted him into Chicago, however, did not endear him to his veteran teammates. Nor, more importantly perhaps, did his all-out intensity during practices, or his refusal to drink or take drugs afterwards. If some of the Bulls were losers on the court, they were self-styled champions off the court in Chicago’s Rush Street and other late-night hangouts. Jordan seldom joined them.
“The first NBA game I ever saw was the one I played in,” he later told reporter Bob Greene.2 In that contest Jordan scored 16 points as the Bulls defeated Washington 109–63. During his first season, one writer later observed, “Jordan mesmerized crowds with his Nijinskyesque physical artistry and, especially, his balletic slam-dunks.”3 Experts were awed by his all-around game, including rebounding and, especially, defense. He shut down the other team’s best guard or forward, while displaying uncanny talent for intercepting passes.4
Critics who searched for weakness soon thought they had discovered it: Jordan seemed not only unable to bring his teammates up to a championship level, but he often alienated them with his intensity, the parading of his skills, and his commercial successes off the court. These successes appeared at the start when, for $200,000, he endorsed a basketball for Wilson Sporting Goods. Wilson then terminated agreements with other stars, including Detroit’s Isiah Thomas. At the 1985 All-Star game in Indianapolis, Jordan stood out as the only rookie elected to the Eastern Conference’s starting team. When he appeared for a shooting contest, however, the rookie wore clanking gold chains and a sweatsuit loudly bearing the Nike logo. It proclaimed another highly profitable endorsement. Thomas, Magic Johnson, Larry Bird, and others froze Jordan out of their company. In the game itself, the West All-Stars targeted and humiliated Jordan. His teammates looked the other way.5
The Bulls’ young star proved to be a quick study. The gold chains disappeared. Humility and deference to his elders on the basketball floor replaced the swaggering. He went on that season to become only the third person in NBA history to lead a team in scoring, rebounding, and assists. Home attendance doubled. When the Bulls stumbled into the playoffs, however, Milwaukee quickly eliminated them.
The next season, 1985–1986, was pivotal. A wealthy Chicago real-estate developer, Jerry Reinsdorf, bought the team. Housecleaning began. Reinsdorf fired Rod Thorn (the general manager who had bemoaned having to draft Michael Jordan), and replaced him with a rumpled former sportswriter and scout, Jerry Krause. Known as “Gerbil,” because of his shape, Krause hired a new coach, Stan Albeck, and demonstrated a unique gift for judging and obtaining talent. Jordan responded by intensifying his game. He won admirers when he cracked a bone in his left foot, missed sixty-four games, and then against medical orders returned in March to drive the Bulls into the playoffs. There the Bulls met Larry Bird and the Boston Celtics, who would go on to win the NBA championship. Jordan played two of the greatest games in NBA history, including the second when he set a playoff record of 63 points and forced a second overtime by hitting two foul shots with no time showing on the clock. Bird, who had scored 36 points, told reporters, “I think he’s God disguised as Michael Jordan.”6
During the 1986–1987 season, the Bulls’ star won his first of seven consecutive scoring titles with a remarkable 37.1 per-game average. But despite a new, intense coach, Doug Collins, the team’s forty wins and forty-two defeats sank them to fifth place in their Central Division.
Jordan, Bird, Johnson, Thomas, and other stars were meanwhile propelling the once down-and-nearly-out NBA to new heights of popularity. Basketball was challenging baseball and football as the national sports pastime. In 1986, much of the game’s hope, charm, and popularity was captured in the film Hoosiers, starring Gene Hack-man, Barbara Hershey, and Dennis Hopper. The film told the real-life David-and-Goliath story of tiny Milan defeating taller and deeper large-city teams to win the 1954 Indiana State High School Championship. Basketball was acquiring a kind of mythic quality. With grit and discipline honing talent, anything was possible.
Anything, that is, except a Chicago championship. Krause manipulated the draft so he could obtain Scottie Pippen, a forward from the University of Central Arkansas. The youngest of eleven children, Pippen, like Jordan, spent much of his childhood in the non-urban South. And like Jordan, he could shoot from any distance, pass, rebound, and play exquisite defense. Phil Jackson, then a Bulls assistant coach, believed that “Scottie had a near-genius basketball IQ.”7 Jackson also noticed that while other players seemed reluctant to get too close to Jordan, Pippen tried to learn all he could from the star. As the two became friends, over the next decade Pippen developed into arguably the second-most valuable player in the NBA.
During the 1987–1988 season, the Bulls won fifty of eighty-two games. Jordan became the first NBA player to win both the Most Valuable Player and Defensive Player of the Year awards. In April 1988, as the Bulls had nearly tripled their attendance since 1984, Reinsdorf and Krause quadrupled Jordan’s annual salary to $3.25 million over a new eight-year contract. But again, despite the presence of Pippen, the Bulls quickly fell in the playoffs to Detroit in the second round. The first round, against Cleveland, however, became legendary. Jordan won the pivotal game with what became known as simply “The Shot.” Behind one point with three seconds to play, he took a pass, and, as Sports Illustrated later described it, “spins to the top of the key [the foul circle] and hits a hanging, double-clutch, 18-foot jumper … at the buzzer” to stun 20,000 Cleveland fans.8
On July 7, 1989, Krause fired Doug Collins and promoted Phil Jackson to head coach. Thus began both an extraordinary friendship between Jackson and Jordan and one of sports’ best coaching records. A substitute on the New York Knicks’ championship team of 1973, Jackson was an unusual person and coach who read widely and meditated daily. He learned from both his meditating and the Knicks’ successes that teams, not individuals, won championships. “The day I took over the Bulls,” he wrote in his autobiography, “I would create an environment based on the principles of selflessness and compassion I’d learned as a Christian in my parents’ home; sitting on a cushion practicing Zen; and studying the teachings of the Lakota Sioux” in his home state of North Dakota. Lakota warriors, Jackson emphasized, did not try to be stars, but helped others, regardless of the cost, so the group could succeed. Owner Jerry Reinsdorf once told Jackson that most people were motivated by either fear or greed. Jackson replied that he thought they were also “motivated by love.”9
Translated, the new coach planned to install a new system in which all the Bulls, not just Jordan, would be fully involved in both offense and defense. Jackson’s intricate system was beautiful to watch, but difficult and frustrating to learn. It did turn the 47–35 record of the year before into 55–27 in 1989–1990. Nevertheless, Chicago again suffered an embarrassing defeat in the spring 1990 playoffs at the hands of the championship Detroit team. Almost as bad, Jordan had grown to dislike Detroit’s intimidating stars—Isiah Thomas, Bill Laimbeer, and Dennis Rodman—personally. He publicly attacked his teammates for not standing up to Detroit’s brutal style of play.
Jordan was becoming obsessed with winning the championship in 1990–1991. The obsession did not stem from his need for money, but his need to be the best. Between his $3.25 million Bulls salary and his endorsements, the $17 million total probably made him the world’s richest athlete. A U.S. advertising-industry analysis further revealed that he was tied with another African-American, television superstar Bill Cosby, as the best-known and best-liked celebrity in the country.10 Increasing amounts of Jordan’s celebrity and money came from selling Nike sneakers in the United States and, indeed, around the globe.
By the 1990s, teenagers shot and sometimes murdered each other to steal Nike’s Air Jordan sneakers and other athletic clothing. The shoes, which cost well under fifty dollars to make in Southeast Asian factories paying some of the lowest manufacturing wages in the world, cost up to three times that in stores. Customers of all ages willingly paid the huge profit to Nike because of Jordan’s name, the highly advertised technology that went into the shoe, and the almost supernatural aura that seemed to surround Nike’s world-famous Swoosh symbol and motto, “Just Do It”—which, critics claimed, was exactly the advice gun-toting teenagers followed to obtain their Nikes.
After Jordan had become the world’s most glamorous athlete in the mid-1990s, Nike was a $9 billion company with about half its sales overseas. It spent nearly $50 million in research and development and more than a half-billion dollars on advertising and marketing worldwide, a figure that dwarfed the spending of such competitors as Reebok, Fila, and Adidas. Nike churned out profits not only by dominating its markets. The Beaverton, Oregon, company exemplified something new and most significant in American history: a corporation that made nearly all its products abroad and sold half or more of those goods in foreign markets. In other words, although known as an American corporation, most of its laborers and its sales were abroad.11
Multinational corporations are not new. In the late nineteenth century, such U.S. firms were rising from the ashes of the Civil War to dominate markets. These included Standard Oil in petroleum products, Eastman Kodak in film, Singer in sewing machines, and McCormick in farm harvesters. But these companies differed from their late-twentieth-century descendants in at least five respects.
First, the 1890s firms largely employed Americans to produce their product; in the 1990s, the firms extensively employed foreign labor and made the overwhelming bulk of their goods abroad. By 1980, a stunning 80 percent of these U.S. corporations’ revenues came from overseas production, and less than 20 percent arose from exporting American-made goods to foreign markets.
Second, while the late-nineteenth-century firms largely traded in natural resources (oil, iron) or industrial goods (steel, paint), the late-twentieth-century firms traded in designs, technical knowledge, management techniques, and organizational innovations. The key to success was not so much the goods, as it was knowledge: the quickly formulated and transferred engineering and marketing information, the control of advanced, rapidly changing technology (such as how to make computer software—or Air Jordans).
A third revolutionary characteristic of transnationals, such as Nike or Coca-Cola, was their increasing dependence on world markets—not solely U.S.—for profits. For the corporations that drove the U.S. economy, and on which nearly all Americans depended directly or indirectly for their economic survival, relied in turn on global markets. In 1996 for example, the Atlanta, Georgia-based Coca-Cola Company, that most American of all firms, stopped dividing its markets between “domestic” and “international.” Instead, it organized sales along the lines of specific regions and, in this regard, “North America” was not substantially different from, say, “Southeast Asia.” This new policy was logical: in 1996 four of every five bottles of Coke were sold outside the United States.
A fourth difference followed: as the Nike budget demonstrated, transnationals of the late twentieth century depended on massive advertising campaigns to make people want their products. The advertising too was revolutionary in that by the late 1980s it could be instantaneously seen on as many as thirty to five hundred television channels in many countries through the new technology of communication satellites and fiber-optic cable. Such advertising often sold not merely a product (as sneakers), but a lifestyle (“Just Do It”) that in most instances was based on American culture. Standard Oil petroleum or McCormick harvesters were not uniquely American products; they challenged other cultures far less in the 1880s than did Nike athletic equipment and its accompanying advertising lifestyle advice, which vividly illustrated the freedom (even the ability to fly through the air with a basketball) that seemed to come with the equipment.
Finally, because the old multinationals were not only headquartered, but produced and/or sold much of their product, in the United States, they could usually be made accountable to the government in Washington. Even the richest of all Americans, John D. Rockefeller, learned this hard lesson when the government broke up his Standard Oil monopoly into a number of smaller companies in 1911. The new transnational, however, became so global by the 1980s that a single government had power over only a part of the firm’s total operation. The size of many transnationals, moreover, dwarfed the size of many governments. Of the hundred largest economic units in the world of the 1980s, only half were nations. The other half were individual corporations. Thus, for example, when the makers of athletic equipment were found in the 1990s to be exploiting low-paid Southeast Asians who worked in horrible conditions, the U.S. government’s power to remedy the problem was limited. The transnational was, as its name declared, transcending the boundaries of individual nations.12
Nike exhibited all five of the new corporate characteristics in varying degrees. It also shared another trait with this new breed of company, for it, like many other modern transnationals, enjoyed its greatest growth—its takeoff into immense profitability—in the 1970s to 1990s. These are the years that, in reality, began the twenty-first century, for they produced the forces that will shape at least the early part of that century. During these decades, such new global technologies as computers, communication satellites, and fiber optics transformed the globe’s economy. It should be pointed out that this new era in world history began not with the collapse of the Soviet Union and the end of the Cold War in 1989–1991, but with the appearance of the post-industrial technology nearly a generation earlier. For this technology changed the lives of peoples around the world and, in so doing, brought down the Communist system, which could not adjust to this revolution.
Phil Knight certainly had no idea that his company might be involved in such a transformation when he founded Nike in the 1960s. Knight, a red-haired and quite mediocre distance runner at the University of Oregon in the late 1950s, was also highly observant of the efforts of the legendary Oregon coach, Bill Bowerman, to produce a lighter, better track shoe. Knight recalled how the gruff, outspoken coach once painstakingly measured exactly how many strides a runner took in running a mile, then calculated that if just one ounce could be shaved from the shoes’ weight the runner would be freed of 550 pounds during the race.
Knight carried this memory with him when at Stanford Business School a professor instructed his students to write a paper about how they would create a new company. Knight wrote a detailed analysis arguing that profits could be generated by importing cheap but well-made running shoes from Japan. Athletic footwear had been around since the 1860s when the British began wearing lightweight canvas leisure shoes. By the 1920s, Converse had turned these into the most popular and profitable sneaker in the United States. From then until the 1960s, nearly all basketball players wore Converse shoes. In the 1950s, however, German-made Adidas and Puma sneakers began to challenge Converse by giving free shoes to top runners who, in turn, would promise to wear them in competition. Thus German companies gave birth to the athletic endorsement several decades before Michael Jordan made it globally famous.
Phil Knight believed he could change American styles by using the Japanese to defeat the Germans. In 1963, while working in a Portland, Oregon, accounting firm, he went on an around-the-world trip. Knight carefully set time aside to visit Kobe, Japan, where the Tiger running shoe was produced. When the skeptical Japanese asked which sports company he was with, Knight made up a name on the spot—Blue Ribbon Sports. He asked for some Tigers to take back to Oregon. The tough Bill Bowerman admitted, “These shoes aren’t half bad.”13 Knight believed he had found his opportunity. He and Bowerman each invested five hundred dollars to purchase Tigers, then Knight traveled around to regional track meets and sold the shoes from his car. The first year Blue Ribbon Sports sold one thousand pairs and cleared about $364.
By 1969, Knight’s sales had leaped to a million dollars. He now worried that the Japanese, whose own transnationals were rapidly spreading around the world, might drop him so they could sell Tiger shoes directly to American customers. The two men, however, were determined to find better shoes. One Sunday morning, with his wife at church, Bowerman poured melted rubber into the family’s waffle iron. Waffle-soled, square-cleated athletic shoes, made of lightweight fabric, were the ultimate result. Knight decided to concentrate on the shoes he and Bowerman were developing. But he needed a name, a trademark, an easily recognized symbol. One of his young designers, Jeff Johnson, had a bad night’s sleep during 1971 in which he dreamed of Nike, the Greek winged goddess who symbolized victory. Without any better idea, Knight decided to try Johnson’s suggestion.
The next year, a Portland State University design student, Carolyn Davidson, sketched a fat, floating checkmark as a symbol for the running shoes. “I don’t love it,” Knight told her, “but maybe it’ll grow on me.” He bought the design from her for thirty-five dollars. Nike employees called it the “Swoosh.” By the 1990s, when it was worn by Nike endorsers Michael Jordan, golfer Tiger Woods, and tennis champion Pete Sampras, among many others, the Swoosh had become the most recognizable commercial logo in global sports. Davidson later received Nike stock from Knight, and rightly so. Her design made it possible for people in faraway lands whose languages did not easily translate the word “Nike,” to identify Nike products simply by the Swoosh. Only an image, not words, was needed to reap profits in other cultures.
Knight and Bowerman viewed themselves as rebels. They rebelled against traditional shoemakers, older marketing techniques, and conservative officials who tried to control such sports as the Olympics—“a bunch of rich old farts,” Bowerman termed these officials, “aristocrats looking for a trip.”14 Knight and Bowerman admired the athlete, the person who actually competed. They especially venerated athletes who were nonconformists, in-your-face free-thinkers. It was, after all, the 1960s and early 1970s. Knight encouraged these traits at Nike, where employees enjoyed themselves greatly by either constantly talking sports or gathering in strategy sessions known as “Buttface meetings” where they yelled criticisms at each other and even at the boss, who happily encouraged such clashes. One amused observer decided that “Nike is like high school, only with money.”15
Knight was convinced that “Sports, unlike entertainment, functions as a meritocracy.”16 Results on the playing fields, not an athlete’s hairstyle or family background, counted. So he and Nike embraced the champions who were different (and thus, of course, could also be easily identified by viewers). His first endorser was a longhaired, free-spirited, middle-distance track champion from Bowerman’s Oregon team, Steve Prefontaine. For five thousand dollars, “Pre” wore Nike shoes and shirts as he broke seven track records. Knight and Prefontaine then directly, and successfully, challenged sports promoters who made money from amateur athletes, but who refused to allow the athlete to make money at track meets. When the twenty-four-year-old “Pre” died in an automobile crash, Knight named a building at Nike headquarters after him, then installed a life-sized sculpture of the runner. Another of Nike’s buildings at Beaverton was named McEnroe (after the tennis champion and Nike endorser who seemed to scream at and insult officials as often as he defeated opponents on global courts). Eventually, a third building would be named Jordan.
In the late 1970s, the American addiction for physical fitness, especially by jogging, helped drive Nike sales from $10 million to $270 million.17 Half of all running shoes sold were Nikes. But Knight wanted more. He was determined to smash Adidas and Reebok, his main competitors. Thus Nike continued to need large chunks of cash for development and expansion. The funds came not from U.S. banks, but from Nissho Iwai. This Japanese trading firm had saved Knight in the early 1970s when a downturn in sales threatened his company. Nissho Iwai continued for the next quarter-century to be the banker for this U.S. transnational.18
To overwhelm Adidas and Reebok, Knight also thought he needed more imaginative advertising. He did not reach this conclusion easily. Indeed, he had considered advertising largely a waste of money, even a fraud. Any product’s success, Knight preached, should depend on its quality (and the success of its users, such as Prefontaine), not on slick advertising gimmicks. But Adidas and Reebok employed advertising, so in 1980 he visited a local ad agency. “I’m Phil Knight,” he greeted Dan Wieden and David Kennedy, “and I hate advertising.”19 Wieden and Kennedy overlooked this unusual introduction to design superb advertisements. After all, they were known in Oregon as “long-haired, bearded flower children” themselves.20
In this case, however, appearing to be members of the counterculture did not necessarily mean being hip: nearly all of Wieden & Kennedy’s ads for Nike went into traditional newspaper and other print media. Knight believed television advertisements to be too costly, given their return. In 1983, he switched Nike to the much larger Chiat/Day Agency, which designed Michael Jordan’s first Air Jordan television commercials.
For a number of reasons, Nike promptly went into a nosedive. Reebok quadrupled sales revenues to become the number one shoe. In 1985–1986, Nike profits plummeted 80 percent. Part of the problem turned out to be the need for more focused advertising. The much larger problem was that Nike employed nearly all men, who designed shoes for men. Women, however, were now buying as many athletic shoes as were men. Reebok shrewdly designed apparel for this booming female market. In 1986, Knight returned to Wieden & Kennedy. He brought with him Nike’s new breakthrough, a basketball shoe with an air pocket in the inner sole. Knight agreed to advertise the new footwear on television. Dan Wieden came up with a slogan: “Just Do It.” Two young women on Wieden & Kennedy’s staff devised an ad with no words, only the Swoosh logo and the blasting music of the Beatles’ “Revolution.” They had found how the transnational corporations could sell goods in vast overseas markets, even in the many lands where English was not spoken. Nike sales soared. They doubled between 1987 and 1989 to $1.7 billion.21
Michael Jordan wore the new shoe, but, as Knight recalled, “it was so colorful that the NBA banned it—which was great! We … welcome the kind of publicity that pits us against the establishment.” And Jordan, of course, “played like no one has ever played before.… Sales just took off.” The Bulls’ star was used to sell the new shoes, Knight emphasized, because “It saves us a lot of time.… You can’t explain much in 60 seconds, but when you show Michael Jordan, you don’t have to. People already know a lot about him. It’s that simple.”22 Jordan, in other words, was an image much like the Swoosh.
David Falk had brought Knight and Jordan together in 1984. A 1975 law-school graduate, Falk and his ProServ agency were among the first professional agents who not only represented athletes in contract negotiations (in which ProServ took about 4 percent of the player’s salary for negotiating the deal), but in obtaining endorsements (where ProServ could receive as much as 25 percent).23 Falk knew what Oscar Robertson had learned the hard way: many companies did not want African-American athletes to represent them. In 1982, however, basketball great Kareem Abdul-Jabbar received an unprecedented fee, $100,000, for endorsing Adidas sneakers. Then Jordan’s North Carolina teammate, James Worthy, received $1.2 million over eight years to wear a New Balance shoe.
Falk speculated that the right athlete could do more than merely wear a particular sneaker: that athlete could actively enter the marketplace, drive sales upward, then profit handsomely from those sales. He believed Jordan could be such a pioneer. The North Carolinian was not only a special player, but a respected person with good values instilled by strong parents. “The thing about Jordan,” a competitor of Nike later observed, “is that he doesn’t alienate anybody.”24 The All-American, moreover, was willing to work cheaply. At his first meeting with Knight, Jordan announced that in return for his endorsement he wanted, most of all, an automobile. Falk had had considerably more expensive terms in mind.25
The timing was perfect. Not only was Knight searching, and Jordan newly available, but the NBA had just appointed an ambitious, imaginative new commissioner. David Stern fervently believed that professional basketball could be promoted globally and be highly profitable. He later compared the NBA with Disney: “They have theme parks, and we have theme parks. Only we call them arenas. They have characters: Mickey and Goofy. Our characters are named Magic and Michael. Disney sells apparel; we sell apparel. They make home videos; we make home videos.”26 As one observer later noted, Stern “grasped the root law of capitalism: grow or die.” The new commissioner, as Jeff Coplon wrote, had nothing less than a “manifest destiny regime.”27
A key to making that destiny manifest, critics claimed, lay in the NBA achieving what historian John Hoberman called “virtual integration”: white executive business control combining with African-American athletic domination to create a “crossover appeal” among millions of white and black viewers. Once the idea that the NBA was (in the words of one of its African-American executives) “too black,” and “too drug infested,” was “turned around,” then the “new personalities” of Johnson, Bird, and Jordan could become moneymaking machines.28
Nike and Wieden & Kennedy found another African-American who had crossover appeal. The movie director Spike Lee scored a major success with all audiences in 1986 with his film She’s Gotta Have It. The lead male character, Mars Blackmon (played by Lee himself), was such an obsessed fan of Michael Jordan that he even wore shoes endorsed by the Bulls’ star to bed. Lee filmed advertisements (turned out by a young sports-addict-turned-writer, Jim Riswold) that brought “Mars” and Jordan together in some of the funniest and most popular commercials of the late 1980s. These combined with ads showing Jordan flying through the air for what seemed to be forever. “His Airness,” as he became known, and the Air Jordan shoe became one. In 1987, Falk negotiated a seven-year contract with Nike. Phil Knight not only guaranteed Jordan $18 million, but a royalty on every Air Jordan shoe sold—a royalty that would amount to far more than $18 million.29
Nike was steamrolling its competitors out of the market. The first step had been to sign the most visible athletes, especially those known for having a sharp edge. Knight, for example, brought in outspoken basketball star Charles Barkley, who declared flatly in his television commercial that he had no intention of being a role model for youngsters. In other Nike ads, however, stood the ultimate role model for young and old alike, Michael Jordan. Another Nike role model was baseball-football star Bo Jackson. By 1991, a poll ranked Jordan and Jackson as the world’s two most famous athletes—a ranking due largely to their global television commercials for Nike.
Knight then took another step to flummox his competitors. He signed not just individual stars, but entire colleges. These schools, famous for their sports teams, promised to use Nike equipment nearly exclusively in return for large sums of money. Football powerhouse University of Miami was first in 1989. As Nike’s historian, Donald Katz, described it, Knight wanted “to vertically integrate all sports”—much as John D. Rockefeller’s Standard Oil Company had vertically integrated the oil industry from exploration and drilling to selling gas at the pump. Knight was becoming the Rockefeller of the sports world.30
Nike’s next step to crush competitors was especially significant. Knight launched massive global advertising campaigns. As he explained, “To paraphrase Willy Sutton [a criminal who said he robbed banks because that’s where the money was], we’re going out into the world because that’s where the feet are.” Nike had begun major advertising in Europe during 1985, then increased the pace until its shoes dominated that market. Jordan, now famous for both his Olympic basketball feats and his Nike ads, could no longer walk down many European streets by 1988 without drawing a crowd. In Japan, an all-out advertising campaign in 1989 made the Air Jordan shoe number one and, along with Coca-Cola, one of the two items teenagers said they most wanted.31
Nike also joined the many who had for decades, indeed centuries, lusted after the great China market. In 1978, the Communist government slowly began delicate reforms aimed at opening China to capital investments, while maintaining tough Communist Party political control. Nike became one of more than fifty thousand joint ventures between transnational corporations and the Chinese. By 1995, China was second only to the United States in receiving direct foreign investment. With annual growth rates of 8 percent and more (the average annual U.S. rate has historically been about 3 percent), the world’s most populous market was booming.32
Many Chinese could now watch foreign television, notably shows from British-governed Hong Kong. When Nike opened its new store in the giant boomtown of Shanghai, hundreds lined up during the night to buy clothing. Knight put on a spectacular opening: “six scantily clad women—the few clothes they were wearing came from Nike’s line—did aerobics,” according to the staid Far Eastern Economic Review, “to the tune ‘New York, New York,’ and Madonna’s ‘Material Girl,’ fitting songs for the dawning of the age of the Chinese consumer.”33
In 1991, Nike, with ads devised as usual by Wieden & Kennedy, launched the first coordinated around-the-world commercial to sell the new Air 180 shoe. The campaign cost $20 million. It began with Super Bowl game spots where some words of English were used. The ad was then repeated in more than a dozen European nations, but no spoken language was heard. The ads for the Air 180 featured Jordan, Bo Jackson, and Steve Prefontaine, among others. In blanketing major markets, Knight avoided only South Africa. That government’s apartheid policy had so brutalized the majority black population that in 1986 the U.S. government began imposing economic sanctions on the white regime. Washington also pressured U.S. corporations to leave South Africa. Despite the brutality, and despite their own government’s request, many U.S. transnationals were reluctant to give up such a profitable market. Nike finally left in 1989. Two years later, apartheid ended, a black government gained power, and in 1994, Nike reentered a market that could buy as many as twenty-five million pairs of shoes annually.34
“Now the experience of sports is everywhere,” Knight observed. “It’s all-encompassing and instantaneous. It’s right there beside you from cradle to grave” and is “the culture of the world.” It was a remarkable claim: sports was the culture that linked the peoples around the globe. He could exhibit some persuasive evidence. Exhibit A was Michael Jordan. “I never knew it could be like this,” the star remarked. He had been popular as a high school senior and especially in college, “but I never knew it could be nation-based—or, if you want, world-based.”35
World-based also described the U.S. advertising agencies that created the images of the glories of American life. Of the fifteen largest agencies in the world, thirteen were American (the other two were Japanese). Nike’s Wieden & Kennedy agency was not one of the largest, but it was certainly ranked among the most creative, known, and successful. Advertising took off globally as Michael Jordan soared in the 1980s. In 1980 the average American was exposed to sixteen hundred advertising messages each day. A decade later, it was about three thousand. Corporations were now spending so much on advertising and other promotions that it amounted to $120 annually for every person on earth.36
These agencies exploited such breathtaking technology as cable and communication satellites that, by the late 1970s, were bringing about not merely new communications, but a new age. Sports and ad agencies had long enjoyed highly profitable rides on the back of technology. As radio became a part of life in the 1930s, for example, baseball advertisers had used broadcasting to reach into many isolated corners of the country. Ronald Reagan, the U.S. President in the 1980s famous for being “The Great Communicator,” learned how to communicate by broadcasting Chicago Cubs baseball games over a small Illinois station in the early 1930s. Reagan was not at the Cubs’ ballpark; he read the plays off a telegraph wire and dreamed up much of the fill-in information he used to kill the time between plays. Baseball radio broadcasts were so popular and profitable that few minded if some of what they heard was untrue.
In 1936, regular television broadcasts began in Hitler’s Germany. Berlin’s Olympic Games were the first major televised sports event. Some 150,000 people could watch the snowy pictures, but only in Berlin itself. U.S. televised sports started in 1939 with a college baseball game between Columbia and Princeton. It was sent out to two hundred television sets in the New York City area. The next year, the first basketball game, a doubleheader college contest in New York City’s Madison Square Garden, was televised. By the late 1950s, the medium had grown so rapidly and powerfully that professional basketball franchises were being granted largely on the basis of the largest media markets—that is, where the most profitable television contracts could be negotiated.37
In the late 1970s and early 1980s, just as Jordan appeared on the scene, commercial television began to jump over national boundaries. A decade later, NBA games, especially those of the Chicago Bulls, could be seen in ninety-three countries. This exposure was made possible by the direct broadcast satellite (DBS). The first DBS was launched in May 1974 by the U.S. National Aeronautic and Space Administration (NASA), which in 1969 had put the first men on the moon. DBS was to have a much greater impact on the day-to-day lives of people around the world than did the moon landing. Launched into orbit so it would float in space over the west coast of South America, the first broadcast satellite relayed information from specialists on health and education into previously isolated areas, such as parts of Alaska and the Rocky Mountains. The experiment was so successful that private companies stepped in to launch their own satellites. The companies, as usual, made their profits by selling advertising.38
Thus new technology led the world’s people into a new era of globalization, paid for by a new advertising. By the 1980s, the technology became even more dazzling—and profitable. DBS went into the home of the television viewer through one of two routes. One route sent the signal from, say, the stadium where the game was being played, to the satellite, then back to earth to individual receivers (or “dishes”) owned by a viewer. In the 1980s and 1990s, however, the more common route was from the stadium to the satellite and then to a receiving station on earth where the signal went into cables. The cables carried the game into individual homes. Thus whoever controlled the cable service could go far in controlling the television markets.39
The potential profits of those markets skyrocketed in the 1980s when fiber-optic cables were developed. These new cables carried information in light waves along a silicon wire that had the thinness of a human hair. Compared with the copper wire it replaced, the silicon wire could transmit dozens of television programs at once, instead of one or two. The silicon, unlike the copper, was not affected by heat or moisture and could emit signals for a hundred years before wearing out. Digital compression technology meanwhile increased the possible number of channels on a television set from dozens to 150 and even 500. A British firm developed the first round-the-world fiber optic system in 1991.40
Now the possibilities were breathtaking. A single direct-broadcast satellite could transmit to earth all of the Encyclopedia Britannica in less than a minute. The contents could even be picked up and placed before the viewer by a cable relay station whose cost in 1975 had been $125,000, but in 1980 was less than $4,000 because of the quick technological advances.41 Profits promised to have no limit. As cable and satellites created international television in the 1980s, so did advertising, whose profits for cable companies shot up more than ten times.
These new systems seemed to resemble magic cash registers as they churned out the money. They also resembled dynamite as they blew apart governmental regulations and geographical boundaries. They did nothing less than change some of the fundamental ways nations’ officials behaved toward their citizens. Italy, for example, had allowed no private local television stations until 1976, but within ten years some three hundred private stations sprang up to cater in some instances to sports fans and, in most instances, to make money from advertising. Belgium had never allowed advertising on its stations. This rule changed, even on state-controlled programs, as the number of stations expanded.42 Cable satellites and advertisers were also ready to exploit the newly-open markets of Eastern Europe after the fall of Communist governments in the late 1980s. The markets of Russia, after the Soviet Union collapsed in 1991, were also unshuttered. It was noteworthy when a nation, such as post-1979 revolutionary Iran’s Islamic government, outlawed international advertising in the new era.
Whenever innovative technology appears, swashbuckling entrepreneurs quickly materialize to exploit it. In the 1880s and 1890s, it had been the robber barons (Rockefeller, steelmaker Andrew Carnegie, banker J. P. Morgan), whose understanding of industrial technology’s potential made them very rich. In the 1980s and 1990s, those made very rich by satellite and cable included Michael Jordan and Phil Knight, but also such media barons as American Ted Turner and Australian Rupert Murdoch. For it was the few, led by Turner and Murdoch, who created the satellite-cable networks on which Jordan and Knight sold the NBA and Nike shoes to the many around the world.
Turner was a flamboyant figure—he was famous for racing yachts, going out with beautiful women (he finally married actress Jane Fonda in 1991), and, most important, visualizing the possibilities of cable. Starting with two small domestic cable channels, he created the twenty-four-hour CNN (Cable News Network) in Atlanta during 1980. Turner nearly went bankrupt in CNN’s early months, but a decade later the network had 132 million viewers and enjoyed healthy profits. A turn came when he bought the Atlanta Braves baseball team and the Atlanta Hawks basketball club, then displayed them on his “superstation” to lure cable customers from around the country. The superstation utilized communication satellites to reach tens of millions of viewers. In 1985, Turner added CNN International, which, by 1993, was seen in 143 nations, including twenty-three in Asia and five in Africa. By linking CNN with China Central Television, he had the capacity to reach six hundred million more viewers.43
Turner banned the use of the word “foreign” from any of his stations’ broadcasts. He understood that little was “foreign” anymore in the interconnected world of the late twentieth century, not even for the most isolated and parochial of Americans. Time magazine called Turner the “prince of the global village.”44 CNN became legendary not only because it carried news and advertising to billions of people, but also because it had developed the largest chain of foreign news bureaus of any U.S. network. These bureaus enabled CNN to be on the spot to instantaneously televise dramatic news events, such as the Gulf War of early 1991 and the Soviet Union’s collapse later that year. In the White House “war room” stood rows of the most sophisticated consoles that brought information from U.S. intelligence sources around the world instantly. But atop those consoles were set televisions tuned to CNN to assure the highest U.S. officials that they were fully and immediately informed. Turner’s CNN was pivotal during the post-1980 years in creating a truly global television that exhibited truly global personalities such as Michael Jordan. In 1996, Turner received $7.5 billion for merging his business into Time-Warner Communications, thus creating an even larger and more powerful worldwide company.
Rupert Murdoch became Turner’s greatest competitor. The two men came to hate each other. Because U.S. law placed severe restrictions on foreign ownership of U.S. media, Murdoch, born in Australia, became an American citizen so he could purchase leading U.S. newspapers, television stations (which he developed into the Fox Network), and magazines (such as the most popular of all, TV Guide). One competitor complained that Murdoch “basically wants to conquer the world, and he seems to be doing it.”45 By the 1990s, he controlled media, especially television, on six continents. He became one of the world’s richest people because, like Turner, he saw the global possibilities of cable and direct broadcast satellites. His satellite-based Sky News linked up with European state-owned stations to form Euronews, which blanketed much of Europe. Murdoch also bought half of the Eurosport network that, after 1989, used satellite to reach twenty-two nations.46 One of his most successful moves was to purchase Hong Kong-based Star Network and turn it into a system that enjoyed access to much of Asia, including the potential 1.5 billion Chinese customers.
Turner and Murdoch soon had to suffer some company in their quest for global markets. After all, as the entertainment journal Variety noted in 1990, “Sports have become one of European television’s hottest commodities.” The same could have been said for many other regions in the world. A giant transnational, Capital Cities, bought the ABC network in the United States, then used satellites to televise ABC shows, including sports, overseas. Capital Cities also created a satellite-based European Sports Network. Most notably, the company bought the highly successful, cable-based ESPN sports network in the United States. By the 1990s, ESPN was also seen in Latin America and Europe.
Because of cable and DBS, the far-seeing Turner, Murdoch, and Capital Cities covered the globe and generated billions of dollars in revenue. And because these giant media companies’ international advertising featured the world’s most recognized athlete, Michael Jordan, Nike (along with Jordan’s other products—Wheaties, Hanes underwear, Coca-Cola, and then Gatorade) also churned out huge global profits. What could happen if Jordan and the Bulls won a championship, not to mention a string of them, boggled the mind. The championships were indeed won, but they were accompanied by tragedy. Again, of course, billions of people in the global village watched.