Shaan pitches the idea of buying Michael Jordan’s long-unsold $13M Highland Park mansion and converting it into a Michael Jordan Museum. The hosts riff on Graceland, Monticello, and Mount Vernon as comparable revenue models, debate crowdfunding vs. private capital, explore the Museum of Ice Cream as a format inspiration, and discuss fractional ownership via Rally Road.
Speakers: Shaan Puri (host), Sam Parr (host)
Shaan Pitches the MJ House Idea [00:00:00]
Shaan: I put something on here that I actually think is one of the better ideas we’ve ever come up with — the Michael Jordan thing.
Sam: All right. You want me to explain it?
Shaan: Okay, so I’ve been looking at this house for a long time. Michael Jordan’s house has been for sale for like a decade and it hasn’t sold. This is his house in Illinois, near Chicago — where Michael Jordan was on the Bulls. He had this 56,000 square foot home in Highland Park.
He originally put it up for sale nine years ago for $29–30 million. Now the price has been cut in half and the thing is still not selling. If you look at the photos — it’s on Zillow, you can go look — he’s got an indoor basketball court, the gate leading up to the driveway has his big 23 embossed in it, he’s got huge closets for all his Air Jordans, everything you’d want. It’s pretty unbelievable.
But it’s not selling, and I think it’s for a couple of reasons. It’s very custom to Michael Jordan — it was custom-made in many senses, so other rich people don’t necessarily want to live in a house that was made for another dude. It’s also very expensive for the area, and the property taxes are really expensive.
But I was thinking: the price is now cut in half. Now it’s a $13–14 million home. It’s in range where maybe there’s something fun you could do with it. You might be getting a value buy. So there are obviously a bunch of basketball fans that love Michael Jordan, and there are a bunch of new ways to crowdfund that we’ve been talking about — Kickstarter, different crowdfunding platforms.
So the question is: should we buy Michael Jordan’s house? Should we start a crowdfunding campaign? If you could get 5,000 people to each put in $2,500, you can own a fractional share. You could own a piece of this history and take it off the market. And then the question is: what do you do with it?
I wanted to brainstorm with you — A, should we buy Michael Jordan’s house, and B, what could we do with it if we did?
Sam Counters: Graceland Is the Model [00:03:30]
Sam: The whole NFT thing — I wouldn’t do that. You’ve had two ideas here: one is to buy his house, and two is to do the NFT thing. One of those ideas is great, I think the other one is overcomplicating it. I would 100% buy it.
The reason I think it’s such a great idea is that my thought right away went to Graceland. You know what Graceland is?
Shaan: No.
Sam: That’s funny that you don’t know what that is — it’s such a big deal in my family. Graceland is Elvis Presley’s house. It’s in Memphis. It’s actually in a pretty crappy neighborhood now, kind of gross, but it’s like a cutesy thing to do if you visit Memphis. I went and did research on it.
Around 600,000 people a year go to Graceland. That brings in — I have the numbers here — just in ticket sales, $21 million a year. So yeah, pretty wild just on tickets. 600,000 visitors a year at $36 a ticket.
I got interested in this, so I thought: what are the most visited homes in America? The White House doesn’t count because you can walk outside of it. The second one — you guys are going to make fun of me — I don’t know how to pronounce this. Monticello?
Shaan: I think so, yeah.
Sam: Okay. Monticello — that’s Thomas Jefferson’s house. The interesting thing about this place, as well as a few others I’m going to mention, is that they’re nonprofits, which means all their numbers are public. Revenue for Monticello — which includes investment revenue — was around $200 million in 2010, but around $7–8 million came just from ticket sales. $8 million a year in ticket sales, and they have around 500,000 visitors.
Another most-visited home is Mount Vernon — George Washington’s house. In food sales alone, just in food, they do $17 million a year. The whole operation does $15 million a year in admission sales, and in total they do about $51 million a year in total income, including $10 million from contributions.
Shaan: That’s absolutely insane.
Running the Numbers on MJ as a Tourist Destination [00:07:00]
Sam: So all of a sudden this starts to get really interesting, because I think Michael Jordan is on par with Elvis and Thomas Jefferson. Michael Jordan’s got TJ beat by a long shot — “MJ over TJ” is part of the slogan when we buy this thing.
But if they’re doing this much in traffic, I have to know: are these in really hot, popular areas where there’s already a lot of tourists and this is just a pit stop? Because Michael Jordan’s house is in a neighborhood — you’d have to only be going there for this place.
Shaan: I looked up Michael Jordan’s address. Guess how far away it is from Chicago O’Hare.
Sam: I’m gonna guess 45 minutes.
Shaan: 20 minutes. It’s 20 minutes away.
Sam: Okay. Have you been to Memphis? Memphis is like — there’s not that much going on in Memphis, and all these people are going to Memphis. Chicago is what, the third or fifth most populous city in America? Something interesting is here.
So what I would do is I wouldn’t do the NFT thing. I would raise two or three million dollars from a bunch of rich people, or use my own money if I had two or three million to spend. I’d buy it, and then it would probably cost a fair bit more to get it set up — many more millions — but then you’d have to convince collectors to lend you the stuff, and you create a Michael Jordan museum. That’s how you do this.
The companies we’ve just mentioned — Graceland, Monticello, Mount Vernon — those folks lived in the 1700s and died in the 1800s. Those properties have been tourist destinations for a hundred-plus years and they do $50 million in revenue. But even if you do just two or three million dollars in revenue, and you can do that for 50-plus years like Graceland has done it for 60 years, that’s incredibly fascinating.
Crowdfunding as a PR Engine [00:10:30]
Shaan: Yeah, I’m with you. So I think you’re right on the NFT thing, but it’s not about NFTs specifically — what I’m saying is crowdfunding. There’s a benefit to crowdfunding that makes the story more viral. It’s a more PR-worthy story. You know, “people from the internet, people from Reddit, got together and bought Michael Jordan’s home off the market for $15 million — they raised $15 million and bought the house” versus “a rich guy went to his rich friends and raised some money.”
The second thing is those crowdfunders become your evangelists. They spread the word and they make the pilgrimage to go see Michael Jordan’s house.
And I think you could do two or three things with it. I think you could make it a museum — a modern museum like we’ve been talking about, like the Museum of Ice Cream, where the tour is very photo-heavy. You’re going through these different photo exhibits — you in Michael Jordan’s bed, wearing a pair of his Air Jordans, standing in a pair of giant Air Jordans. You make it like a Museum of Ice Cream where you walk out with ten Instagram-worthy photos at the end.
Sam: Give people some background on the Museum of Ice Cream.
Shaan: You can pull the latest numbers, but I think they raised at a $100M-plus valuation. If you ever go to one, they’re pretty cool. I was honestly a little disappointed, but the photos turn out cool. It’s a museum you walk through — a guided path, maybe 13 different rooms, every room is something cool, you get a little ice cream cone of some flavor, and you can take photos next to these exhibits. The idea is not to look at the art like a traditional museum but to take a photo in the art and post it on Instagram. That’s their free marketing.
Sam: Oh yeah. They raised a $40 million Series A at a $200 million valuation last year.
Shaan: And I think the MJ museum could be bigger. Much, much bigger as a brand.
Sports Cards, Memorabilia Vault, and the Full Vision [00:14:00]
Shaan: The other thing you could do — sports cards are having this incredible boom right now. What you could do is have certain collectors put their collections in the house. The house could basically be the vault to store some of the rarest memorabilia in the sports world: signed basketball shoes, sports cards. That could be part of the museum. You store it for those collectors.
So I think there’s a bunch of stuff you could do to make this work. The idea is: can you buy this thing for $13 million, put another $4–5 million into getting it set up, and then make $5 million a year? Make $10 million a year like these other guys do? As a pilgrimage for tourists going to Chicago and basketball junkies?
I think the answer is definitely yes.
Sam: I think it’s so interesting. I found another example — it’s called the National Trust for Historic Preservation. It’s a nonprofit, and all they do is historical buildings. I looked at their numbers. They’ve been doing $50–60 million in revenue for years. And they have a line item — revenue less expenses — that’s been running at $26 million, and it’s been doing that for years. Is that nuts?
Shaan: So I like this idea a lot. I kind of want to dig further into how home museums work, because this is pretty interesting.
The other good thing about this, by the way, is that the Basketball Hall of Fame sucks. Nobody cares about it, nobody goes to visit it. All the other sports — Canton for football — those are tourist destinations, tons of people go every year. The basketball one is known to be super lame because they let way too many people in and it’s not a thing basketball fans really care to do.
The Obama Airbnb Angle [00:17:30]
Sam: Can I give you two more examples of what we could consider doing instead of a museum? Maybe this is even simpler.
I’m staying at my friend Jack’s house — it’s a badass house. Five or ten doors down is what they call the Obama House. When Obama was in office he would stay at this house, and the owners let him stay for a massive discount. Now it has its own Wikipedia page and it’s called the Obama House.
It sold ten years ago for $7 million after he’d already stayed there, which is a lot of money. And they rent it out on Airbnb for $6,000 a night — or $180K a month if it’s booked all the way up — and it’s branded as the Obama House.
I think you could absolutely crush it with a Jordan Airbnb house. Would you and a group of friends be willing to pull together $3,000 a day to stay there?
Shaan: Maybe. I think the way you’d have to do it is make it a Vegas alternative for bachelor parties and birthdays. Like, what is the man-cave dream vacation? “Dude, we’re going — 14 of us — and it comes with all the amenities.” This is where you go if you want to live the sports fan’s dream.
Sam: I do like the museum one better. What was the second idea you had?
Shaan: I guess it was more just another example — the Fresh Prince of Bel-Air house. But you know, do you remember living in San Francisco? There’s the Painted Ladies — the Full House house. And then there’s the Mist Out Firehouse.
Sam: I would just want to buy all of these and turn them into something. I lived a block away from the Full House house. Literally 24/7 there is somebody standing outside that house during the daytime taking a photo of it. It’s not a huge line, but there’s always four people standing outside taking a photo in front of it. Every single day, the whole year. It’s kind of crazy.
And then it just sold — at basically 1.5x to 2x the market rate in that area. They got basically a double premium because it is the Full House house. Which I think is kind of interesting.
The Crowdfunding / Rally Road Debate [00:21:30]
Sam: Okay, I think we should buy Michael Jordan’s house. I think we should crowdfund — get 5,000 people together and own this thing. Or we could go to Rally Road and say, “Hey Rally, let’s put Michael Jordan’s house on Rally and sell this baby out.”
Right now on Rally Road, you’ll get two or three thousand people buying a fractional share of a pair of Jordans or a signed autograph or a signed rookie card or something. If they can do that on a rookie card, we can own the guy’s house.
I think you could easily get 5,000 people on Rally Road to buy a fractional share of Michael Jordan’s house. I’m surprised they don’t already do this. If they’re listening to this — go for it, just give us credit and give me a share of the house.
Shaan: I actually think they wouldn’t do that because — how do you liquidate? It’s been on the market for ten years. Nobody is obviously buying it. How do you get liquidity from that after seven years?
Sam: You don’t. I think the game here — the point of Rally is that they take things that are not liquid assets and they make them liquid assets. Because you can own a fractional share, there’s liquidity. Any one person who owns a piece of Michael Jordan’s house can swap it with anybody else who wants to own a piece. You don’t need a $15 million buyer because you can sell in blocks of $1,000 or $1,500.
When you bring that price point down, there are people who want to own a piece of the asset — which is how they do it when they’ll sell, you know, a Harry Potter first-edition signed set of books. Instead of selling it for $25,000, they’ll get 2,000 investors to each put in whatever the math comes out to — $150 — to own a piece of that thing. They introduce liquidity by making it fractionally owned.
Shaan: Yes, but there’s still no cash flow. You have to create an operation around it. There’s no cash flow in a basketball card, no cash flow in Air Jordans, no cash flow in a Harry Potter first edition — you’re waiting for another investor who’s willing to buy it.
Sam: Dude, you’re still thinking like the old world. You haven’t seen what’s going on on Rally. You’re staying with Jack Smith — you should go ask Jack Smith about how this stuff works. He’s the one who taught me about this, and he’s one of the biggest investors in this stuff. He’s not buying it for cash flow. There is another collector, and when you make it fractional, way more people can get in on collecting versus just the deep-pocketed people who could buy the whole asset.
Shaan: 100% yeah. But who liquidates it after a handful of years on Rally Road?
Sam: Someone actually buys the car after a few years — very rarely, but occasionally somebody comes and offers to buy out the whole lot. Then they put it to a vote.
I don’t know if you’ve seen this, but like — let’s say a box of Pokémon cards went on there, a super rare set. Let’s pretend the IPO was $50,000. What happened is a big investor came in and said, “We’ll buy this thing out for $85,000 — you’ll all get a profit but we want to own it.” They put it to the vote of all the share owners, and they said no. They said, “We’re going to hold it, we think it’s going to go up.” So they voted to keep it.
They’re not all trying to liquidate. Some people who are buy-and-hold investors will want to own these assets for a long time because they think: if I just hold this, what’s Michael Jordan’s fame going to be 20 years from now? If Michael Jordan passes away, how much is it going to be worth? There are people in it for the long term.
The Last Dance Effect and MJ’s Legacy [00:27:00]
Sam: I think the collectibles thing works a little differently than you think. I would say you basically need Jordan to have a tragic accident — or like, The Last Dance came out. That’s the ten-part documentary on Netflix and ESPN. Millions and millions of people watched it, Jordan’s brand visibility went up, you could see the prices of Jordans went up, brand sentiment improved — all because this documentary told the Jordan story to the younger generation who were two years old when Jordan was at his prime.
So Jordan’s brand got stronger with The Last Dance, and I think that’s just going to continue over time because he’s got all these different properties and the legacy becomes bigger than the person itself.
Shaan: I have a different thing that’s sports-related.
Sam: Okay —