That Time I Was Part of a Lawsuit with Michael Jordan
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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Loss of Authenticity
Imagine a star quarterback known for his dedication to fitness and healthy living suddenly promoting fast food, energy drinks, and questionable supplements. This jarring contrast raises eyebrows and questions among fans. Does he really use these products? Is this just about the money? When a student-athlete's personal brand becomes a billboard for unrelated products, it erodes trust and credibility. Their endorsements feel like empty slogans rather than genuine recommendations, leading to a loss of respect and a decline in fan engagement.
Potential sponsors also take notice. Brands seeking authentic partnerships are less likely to invest in an athlete who appears to endorse anything for a price. They want someone whose values align with their own and whose genuine enthusiasm for their product will resonate with consumers. When an athlete's brand becomes diluted, they risk missing out on valuable opportunities with brands that could truly elevate their image.
In essence, losing authenticity is like breaking a promise to your audience. You've built a brand based on certain values and characteristics, and when your actions don't align with those, it creates a disconnect. This can damage your reputation, alienate fans, and limit your future prospects.
Decreased Marketability
In NIL, a student-athlete's personal brand is their calling card. However, a cluttered brand image, one associated with a multitude of disparate products and services, can easily get lost in the noise. This over-saturation not only makes it difficult for the athlete to stand out from their peers but also dilutes their unique identity and appeal.
This lack of focus can be a turnoff for sponsors seeking athletes who embody specific values and resonate with particular audiences. A muddled brand image makes it difficult for these sponsors to determine whether the athlete aligns with their brand identity and target market. This can lead to missed opportunities for meaningful partnerships that could significantly boost the athlete's financial prospects.
In essence, a cluttered brand image can become a barrier to success in the NIL market. By focusing on quality over quantity and carefully selecting endorsements that align with their values and goals, student-athletes can create a cohesive and compelling brand narrative that resonates with both fans and sponsors.
Negative Perception
Imagine a talented young student-athlete who signs NIL deals with a fast-food chain, a luxury car dealership, and a gambling app, all within a short span. While these might seem like lucrative opportunities, the volume and disparate nature of these endorsements can quickly create a negative perception.
Fans and the public might start to view the athlete as someone who is solely motivated by money, willing to compromise their values and integrity for a quick buck. This can alienate fans who once admired them for their athletic abilities and dedication to the sport.
The athlete's reputation can take a serious hit as they become known more for their commercial endeavors than their athletic achievements. This can be particularly damaging for student-athletes who are still developing their personal and professional identities.
To Avoid the Pitfalls of Personal Brand Dilution
Student-Athletes can take proactive steps to manage their NIL deals and maintain a cohesive brand image. Here are some key strategies:
Define Your Brand Identity: Before diving into NIL deals, take the time to define your core values, interests, and long-term goals.
Set Clear Criteria: Establish specific criteria for evaluating potential NIL deals. Consider factors such as the brand's reputation, target audience, product or service offering, and overall alignment with your values.
Prioritize Quality Over Quantity: Resist the temptation to accept every endorsement opportunity that comes your way.
Maintain Authenticity: Stay true to yourself and your values in all of your NIL activities. Don't endorse products or services that you wouldn't personally use or believe in.
Review and Adapt: Regularly review your NIL strategy and make adjustments as needed. Your brand identity may evolve over time, and it's important to ensure that your partnerships continue to reflect your current values and goals.
By following these steps, student-athletes can navigate the NIL landscape with confidence, protect their personal brands from dilution, and build a strong foundation for long-term success.
About Bill Carter
Bill has advised brands on Name, Image, Likeness for 25 years—first in pro sports, now at the college level. He was the Co-Founder of the Gen Z sports agency Fuse, which he sold in 2019. In 2020, he founded Student-Athlete Insights and consults on NIL strategy with Fortune 500 companies and 30+ DI universities. Read more about Student-Athlete Insights.