In the 1970s, Adidas sneaker shoes were all the rage. This brand was seen everywhere from the streets to the playgrounds. Adidas had no major competitor then. But a mistake by the company deprived it of being the king of the sneaker market. Something happened that it lost the title. Nike, a small company at that time , snatched this title from it. Now the situation is that Nike's market cap is three times more than Adidas. How this game changed and how this whole game happened, this interesting story is worth knowing.

In the same decade, Nike Inc. was manufacturing track shoes. Originally known as Blue Ribbon Sports, Nike introduced a shoe with a "waffle pattern" sole design that was well received by track athletes. Although Nike had made a name for itself in track sports, Adidas and Converse dominated basketball.

Nike's sales grew rapidly in the 1970s, rising from $28.7 million in 1973 to $867 million (about Rs 70 billion) by the end of 1983. However, in 1984 Nike reported its first quarterly loss.

Adidas was king, but its position started changing during the 1984 NBA Draft. NBA's greatest player Michael Jordan is also largely responsible for this change. In fact, Michael Jordan played his first season at North Carolina and won the ACC Rookie of the Year title in 1982. After this Jordan left North Carolina and the Chicago Bulls selected him at number three in the 1984 NBA Draft.

Jordan did not get any interest from Adidas in the bidding war
. Jordan wore Converse shoes while playing for North Carolina. Actually, his coach Dean Smith had an annual deal of $10,000 with Converse. But Jordan was inclined towards Adidas. He wanted to wear Adidas in the NBA. Adidas was also aware of Jordan's potential, but Adidas, which was 'intoxicated by its position', did not offer any deal to Jordan. Heartbroken, Jordan started talking to Converse.

A meeting was held with Converse. In the meeting, a Converse representative said, "We are basketball". This means that the Converse brand is deeply associated with the game of basketball. It has a long history with basketball, especially because of their famous Chuck Taylor All-Star shoes. By saying this, Converse also tried to show that it considers itself a leader in the basketball industry.

Jordan asked, "Where do I stand in this discussion (what you're saying)?" Converse's president, John O'Neil, replied, "We'll treat you like our other superstars." Jordan's father, James, then asked, "Do you have any new, innovative ideas?" There was silence. Converse really had no answer.

Converse offered Jordan a deal of $100,000 per year. That much money was a standard for other superstars as well.

Nike threw its dice
When things didn't work out with Converse, Nike saw an opportunity. Nike needed a superstar to make its business shine. And the company saw that superstar in Michael Jordan. However, Jordan was a fan of Adidas and he did not even want to talk to Nike. He told his agent David Falk, "Just get me a deal with Adidas."

However, David Falk had a very good relationship with Nike. Most of his clients wore Nike shoes. He wanted Jordan to have at least one meeting. On the insistence of the agent and his father, Jordan agreed to a meeting with Nike.

Nike showed him new red and black designed shoes. Jordan told them that he liked Adidas because they were very close to the ground, which Nike did not have. On this, the company representative said that they could get shoes made for him according to his wish. At that time, no company was doing this. On this, Jordan seemed a little calm.

Nike offered Jordan a 5-year contract worth $500,000 per year, which included stock options and other benefits. The total amount reached $7 million when all the benefits were added. No deal this big had been made before. The biggest deal was with New Balance, in which James Worthy was given $150,000 per year. The deal that Jordan got was amazing, but a big condition was also kept for it, that Jordan would have to achieve one of the three achievements in the first 3 years-
1. Become the Rookie of the Year
2. Become an All-Star
3. Maintain an average of 20 points per game

The challenge was to live up to any one of these three in the first three years. However, this was easy for Jordan. Even after getting such a big deal, Jordan was still inclined towards Adidas . Before doing the deal with Nike, he once again went to Adidas and said that Nike was offering him all this. If Adidas offers him anything even close to that, he will sign the deal right away.

Since Adidas was one of the biggest companies at that time, it did not give much importance to Jordan. Adidas did not give him a big offer considering him "too small" for that deal. This mistake cost Adidas heavily. After this Michael Jordan finalized the deal with Nike.

Nike was fined but Air Jordan became popular
. Nike designed shoes as per Jordan's suggestions. After a few weeks, his agent Falk named these shoes "Air Jordan". 'Air Jordan 1' was launched in the 1984-85 season. Its color was red and black. But this was a violation of uniform in the NBA. Now Nike had only two options -
1. Change the color of its Air Jordan shoes. Or
2. Pay a fine of 5,000 dollars for every game.

Imagine what Nike would have done. Nike said, the fine is accepted, but the color will not be changed . Nike paid the fine of $410,000, but presented it in the advertisement as a marketing strategy. The advertisement said that – the NBA cannot stop you from wearing these shoes. Then what, this ad was liked a lot, and 'Air Jordan 1' became popular among the fans.

Jordan also did wonders.
Jordan had to fulfill one of the three conditions of his contract, but he fulfilled all three conditions in his first year. He averaged 28.2 points per game, became an All-Star, and also won the title of 'Rookie of the Year'. By the end of 1985, the Air Jordan brand earned a revenue of $100 million. Nike co-founder Phil Knight described it as "the perfect combination of quality product, marketing, and athlete endorsement".

What is the position of both companies now?
In 2019, Nike (including Air Jordan) had 86% of the basketball market and 96% of lifestyle-basketball. In the 2019-20 season, 77 percent of NBA players wore Nike or Air Jordan shoes. Nike's revenue in 2019 was $40 billion (about Rs 3.2 lakh crore), which was 60% more than Adidas.

Nike's current market value is $112 billion, three times that of Adidas ($40 billion). If Jordan had been with Adidas at the time, the story might have been different. But Nike still maintains its dominance in the world of sneakers.