Let Him Walk!!!

Article excerpt

THE LASTING IMAGE OF MICHAEL Jordan's fourth championship is of basketball's best player ever stretched out on the court, blubbering over the game ball. Poignant, for sure. But if you really want poignant, suppose that was Jordan's last game with the Chicago Bulls. Suppose that next Monday, when he becomes a free agent for the first time in his career, Jordan starts shopping himself around to another team. Suppose that his owners (gasp!) tell him to walk.

Fuhgeddaboutit, you say? Who of sane mind would let him walk? He's Michael Jordan, for jiminy's sake. This year's Most Valuable Player, an icon of fame and marketability. All he wants is a measly $18 million, or maybe just a bit more. Who cares? Surely Jerry Reinsdorf, the Bulls' charismatically challenged owner, known to fans as "innocent till proven cheap," would do anything to keep His Airness.

Well, maybe--or maybe not. This may not thrill Michael's millions of besmitten admirers, but we're here to tell Jerry he can hang tough. Granted: we're playing devil's advocate. But thinking like a green-shaded M.B.A., ever attentive to the bottom line, it clearly makes little if any financial sense for the Bulls to re-sign Jordan. The reason: Jordan, at 33, has entered what an economist might call a period of diminishing returns. We're not talking scoring here. We're talking about his ability to produce much if anything in the way of extra revenue for the Bulls. After all, season tickets are sold out for years. Television contracts are locked in. Sales of team merchandise are split among all the NBA teams anyway, so who needs Jordan to flog more--especially if he'll be around only another couple of years? In short, every new dollar to Jordan cuts into the Bulls' profits. So yes, Jerry. Go ahead and let'im walk!

OK, OK, there are a few other things to consider, not least that Reinsdorf wants another championship--and probably does not want to be lynched from Sears Tower by rabid fans. That alone makes it likely that Jordan will play for the Bulls next year. Still, just for the heck of it, let's look at the numbers behind this deal.

The case for Jordan's big payday can be summed up in three words: Reinsdorf owes him. The star has been woefully underpaid, basically forever. His rookie contract in 1984, $6.3 million over seven years, proved a cheap investment for the Bulls--and set Jordan's pattern of locking in long-term but relatively low-pay deals that were soon outpaced by the market. This most recent season--the last in an eight-year contract--he was paid $3.8 million, ranking a laughable 27th in the league. Consider, also, his contribution to the Bulls' corporate wealth. Over the years he's been the team's biggest draw, snagging in everything from tickets to T shirts to TV rights. Ultimately, Reinsdorf can thank Jordan for much of his franchise--worth an estimated $178 million, up from $17.5 million in Jordan's 1985 rookie year.

But does that mean Reinsdorf should pony up now? Setting aside gauzy sentimentalist notions of fair play or gratitude, let's answer that question by posing another. Is an employee's salary a reward for past performance or an investment in future growth? "You walk a tightrope between paying Jordan what he's worth and investing in the future of the team," says Paul Much, an investment banker in Chicago. By this criterion, Reinsdorf has almost zero incentive to make Jordan happy. Here's why.

Ticket Sales. While Jordan clearly fills seats, he's reached his capacity to increase attendance any more. The Bulls sell out every game. If Jordan were to leave, some fans might drop their season tickets, but there are 17,200 people on the waiting list. (Besides, attendance didn't drop during his baseball sabbatical.) There are also up to 500 names on the waiting list for the 216 United Center suites, costing up to $175,000 each. Reinsdorf can't be sweating all that much.

Merchandising. …