Decoding the Business of Earvin “Magic” Johnson

Earvin “Magic” Johnson‘s 13-year NBA run with the Los Angeles Lakers was just the beginning for his longstanding career off the court. The 6’9”, 220-pound point guard–who won five NBA championships and a gold medal at the 1992 Olympics held in Barcelona–now juggles a plethora of business ventures from health centers to urban development projects. As the Chief Executive Officer of Magic Johnson Enterprises, the Lansing, Michigan native has been able to provide jobs as well as goods and services to minorities throughout the country with his lofty endeavors. The 52-year-old has also transformed the face of HIV since revealing his contraction of the disease more than 20 years ago.

Once the basketball hall-of-famer realized his potential beyond the game, he created a plan for life off the court: build wealth, develop a series of lucrative partnerships and pass on the benefits for future generations. “Our mindset needs to change when we think about material things,” he told Black Enterprise in a 2010 interview. “We want to be hip and cool; we want to have 20 cars. Young people look up to people like Kobe Bryant or LeBron James, but their role models should be people like Ken Chenault. They don’t realize he’s much more powerful and will make more money than them for years because he won’t have to retire early like pro athletes do.” In light of Johnson’s recent minority stake in the Los Angeles Dodgers, BlackEnterprise.com figured now was the time to Decode the business of Magic.

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BIG & SMALL SCREEN MAGIC

In 1994 the former NBA player created a chain of movie theaters in minority neighborhoods in the Los Angeles area. Seeing the need for first-rate movie multiplexes in Black neighborhoods, Johnson Development Corporation later partnered with Sony-Loews Theaters to open additional locations in Atlanta, Cleveland and Houston. AMC Theaters purchased Sony-Loews in 2006, renaming the entrepreneur’s multiplexes to AMC Magic Johnson Theaters. Since giving up his management role, most theater locations have since closed with only two remaining–one in Harlem and the other in Largo, Maryland.

In February 2012, Magic Johnson became one of the few minorities to acquire his own television channel through Xfinity (formerly Comcast). Named Aspire, the channel is geared towards African-American and families will offer movies, documentaries, short films, music, comedy and inspirational programs. “Aspire will be a network that encourages and challenges African-Americans to reach for their dreams and will appeal to all generations,” said Johnson about the channel, which is set to launch this summer. “Aspire will celebrate our heritage, our groundbreaking achievements and the fearless talent that has shaped American culture.”

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TALKING A GOOD GAME

Although the exuberant, competitive athlete-turned-businessman retired in 1991, he has never been far from the game… or the Lakers. During the Lakers’ 1993—94 season, Johnson replaced head coach Randy Pfund, and helped the team win the first five games of that season. Soon after, when they began to lose, Johnson announced he wouldn’t coach again. “I want to go home,” he told the Associated Press

in 1993. “It’s never been my dream to coach. I want to own, to be a businessman. You’ve got to chase your dreams.”

Johnson got his wish in June 1994, when he stopped coaching the West Coast franchise, but simultaneously became the first minority shareholder of the Lakers, purchasing for a reported 10 percent of the team for $10 million. He went back to play one more season with the California-based team during the 1995-96 season, then retired for good after losing to the Houston Rockets in the first round of the 1996 playoffs. Johnson eventually joined TNT as an NBA analyst for seven year, and ultimately landed a multi-year agreement with ESPN as a studio analyst on NBA Countdown in October 2008.

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HIV ACTIVISM

After letting the world know he was HIV positive during a 1991 press conference, Johnson immediately went into action by starting a campaign and the Magic Johnson Foundation. Since launching in 1991, MJF has expanded to host a scholarship that pays up to $5,000 in tuition; help families become home owners; annually provides food to more than 10,000 families in need and offer technologically-savvy learning centers in urban communities. The foundation has three major partners that work with HIV/AIDS relief: AIDS Healthcare Foundation, the largest healthcare provider for HIV/AIDS, providing services to over 1,200 individuals living with HIV/AIDS via five AHF Magic Johnson clinics; Abbott, a worldwide healthcare company devoted to helping establish health management and finding new medicines, who will offer health education to

minority communities through a multi-year plan; and Aetna, a national health insurance company, who launched a 20-week “nutrition and exercise competition between fourth-and-fifth graders at five elementary schools in the Houston Independent School District.” Overall, Johnson’s programs help around 250,000 people every year, and they only continue to grow.

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A TRUE TEAM PLAYER

In October 2010, Johnson sold his 4.5 percent minority interest in the Los Angeles Lakers, giving up an estimated $27 million of the team’s total worth. A partial owner since 1994, it was rumored that he sold his stake to look into buying other NBA franchises. However, it was recently revealed that Johnson had actually set his sights on baseball–specifically the L.A. Dodgers. Already an investor for the Dayton Dragons, who sold out 844 consecutive games (an ongoing record for a North American professional sports franchise), Johnson became the first athlete to buy stock in a team of a different sport. Johnson, alongside Stan Kasten purchased the L.A. Dodgers for a “record $2 billion.”

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FOOD FOR THOUGHT

Knowing the importance of daily nutrition, the former Lakers’ owner partnered with several companies to put his imprint on the food service industry. In 1998 Johnson teamed up with Carlson Restaurants Worldwide Inc. to establish Magic Johnson’s T.G.I. Friday’s in Ladera, CA. He also teamed up with Sodexo, Inc., a food service company, in 2006 to establish SodexoMAGIC, which provides catering, food distribution and environmental maintenance to a client list of nearly a dozen companies.  During that same year, Johnson worked with Starbucks

‘ Chief Executive Officer, Howard Schultz to acquire 50% of the coffee shop company, but sold 105 coffeehouse franchises back to the company in 2010 for a reported $75 million.

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URBAN DEVELOPMENT

Health is of vital importance to the former professional athlete, which is why he “jumped at the chance” to develop more than a dozen 24 Hour Fitness Magic Johnson Sports Clubs. The gyms are based in areas where he has an established presence with his other ventures in California and Texas, in cities such as San Diego, Oakland, Compton and Arlington. In 2001, Magic joined together with Canyon Capital Realty Advisors–one of the country’s largest private real estate companies–to redevelop properties in urban communities. Fused together, the Canyon-Johnson Urban Fund as it’s called, recently signed on as the sponsoring agency to develop One Santa Fe, a $160 million mixed-use project under construction in the downtown Los Angeles Arts District. According to MarketWatch, “One Santa Fe will include 438 apartments and 78,620 square feet of office and retail space, along with nearly 50,000 square feet of public outdoor space.”