Michael Jordan changed the NBA during the course of his career. That statement doesn’t just apply to the way the game is played, but also to off-the-court happenings across the league. The NBA became wildly successful thanks to Michael Jordan, whose talent helped shine a spotlight on the league and make it one of the most lucrative sporting leagues in the world.
Jordan was invaluable to the NBA, and especially to the Chicago Bulls. So in 1996, when Jordan entered free agency, the Chicago Bulls knew how important it was to re-sign him. The story of Michael Jordan’s free agency in 1996 is truly amazing, as Jordan had to choose between two Eastern Conference heavyweights.
With Charles Barkley, Shaquille O’Neal, and Alonzo Mourning, the 1996 free-agent pool is considered one of the best in history. But no name was bigger than Michael Jordan. Jordan wanted to know what he meant to the Chicago Bulls, after years of service to them and helping them win championships.
The Bulls did hold the advantage over the other teams, as they had Bird rights over Jordan. He and his agent held talks with the Bulls. His agent David Falk was vague with the Bulls, telling them that the sum figure they wanted the contract to be worth did not begin with 2. As this was happening, Jordan’s camp also fielded offers from the New York Knicks.
David Falk (Jordan's Agent): “His value, easily, could have been $100 million a year. ... [Jordan] told me he never wanted me to give Jerry Reinsdorf or the Bulls an indication of what I thought it would take to sign him. He just wanted to know, without being pushed or leveraged, what the Bulls felt he was worth. And so [when free agency started], he had instructed me not to make any offers to anyone. When the Bulls called and they asked what it would take to sign, I explained to Jerry Reinsdorf that Michael wanted the Bulls to make their best offer. And he would just simply say yes or no. It's like a sealed bid.
”Reinsdorf was a very smart guy and said, "David, that may be the dumbest thing you've ever said to me. There is no way I'm going to do that. You're telling me that if I give you the wrong number, then I'm going to lose the greatest player of all-time, and I'm not going to have a chance to respond?" I said, "Look, this is the way Michael wants to handle it." He said, "I would like to give you the first digit of what I think is a fair number and I want you to tell me [if] that's the appropriate digit." I said, "OK, that sounds reasonable." And he asked one of the most famous questions in the history of sports: "Does the first digit start with a two?" And there was a very, very, very long pause on the phone. And I said, "No, Jerry, the first digit does not start with two."
The Knicks wanted to sign Jordan and pair him up with his friend Patrick Ewing. Getting Jordan, the biggest name in the NBA, to play in the biggest market would be huge for the Knicks and for the NBA as a whole. But the Knicks knew they were going to struggle to sign him, given that Chicago had Bird rights over Jordan, and they couldn’t match an offer the Bulls made under the salary cap.
Dave Checketts (President and CEO of Madison Square Garden): David Falk had told us to spice up what we were doing under the cap with a nice package from our parent corporation in terms of stock options or room nights or something like that... I only gave him a day to think about [the offer of all the money under the Knicks' salary cap]. And [Falk] came back and said he can't make a decision that fast. And there was part of me that wanted to wait, but I felt it would be a disaster if we waited, and then Michael wouldn't leave Chicago, and we would have missed out on really good players.
AFTER FALK GOT OFF THE PHONE with Reinsdorf, with the deal not yet completed, and after he spoke with Checketts, he spoke a second time with Reinsdorf, who now knew what it would take to keep the game's best player. He knew the offer would have to start with a "3." And so it was then that the deal, essentially, was done; free agency had begun on the evening of July 11, and Jordan and the Bulls agreed to a one-year, $30.14 million contract on July 12. Regardless of whether Reinsdorf was aware of any potential ancillary earnings that the Knicks might have been able to provide, Jordan got the largest single-season contract in the history of American team sports.
The Knicks tried to find other ways of compensating Jordan but that wouldn’t have worked out. In the end, the Knicks gave MJ an offer but told his agent that they had 24 hours to respond. The Knicks would have been willing to give more time, but that would mean they ran the risk of losing out on other free agents.
Not wanting to lose Michael Jordan, Chicago Bulls owner Jerry Reinsdorf offered Michael Jordan $30.14 million on a one-year contract, making him the highest-paid player in the league. There is doubt whether Michael ever considered seriously joining the Knicks. But clearly, just the fact that MJ was negotiating with the Knicks was enough for him to get the deal he wanted.