The Magic of Earvin Johnson: A Brief Summary
On the basketball court, his world famous nickname says it all “MAGIC.” He was like the pied piper—players followed his lead. His drive to succeed didn’t stop in the court, Earvin Magic Johnson, the giant point guard with an MVP (Most Valuable Player) smile and no–look pass. With the ball in his hand, Magic seemed to see everything on the court; however, his vision went way beyond the game and was a driving force and playmaker in the world of business, until he was forced into retirement after acquiring HIV.
It was a sad day for the Lakers’ fans and the news sent shockwaves throughout the world when Magic announced to the world: “…because of the HIV virus that I have to retire from the Lakers.”
For Magic, to quit basketball was devastating. He just got married two months earlier and his wife was pregnant before the news broke. Along with losing his basketball career was the withrdrawal of his sponsors. However, as true extraordinary people do in the face of any challenge and adversity, HIV didn’t deter him. He used it as a rallying point in his life to go to a higher level and he chose business as the platform to do it. It wasn’t easy, Magic has to re-invent himself from scratch and the learning curve was stiff.
Many people said to him that not because he was a gifted a basketball player, he would be able to excel in business.
In the fall of 2011, Magic Johnson made a surprised visit to a homecoming pep rally to his former high school in Lansing, Michigan.
In his surprise visit to Everett High School—his former school—Magic said to the students the following words of encouragement: “It doesn’t matter where you are financially, I grew up poor but I didn’t have a poor dream.” He also continued by saying, “You have to understand your purpose not only here [at Everett High School] but your purpose in life.”
In business, Magic can smell out a good deal from a bad one just like how he did the no–look pass in basketball. He also believes that an urban marketplace was a rich entrepreneurial venue.
Early Biography: a Far from Magical Childhood
The extraordinary life of Earvin “Magic” Johnson began on August 14, 1959 in Lansing, Michigan. One of ten kids, Magic grew up in a working class African-American neighborhood in Lansing’s west side. Earvin’s mother, Christine, was a school custodian, while his father Earvin Sr. worked at GM on the assembly line. In his 40 years in the plant, Magic’s father missed his shift only twice despite holding down two full time jobs. Earvin Sr. became Magic’s greatest inspiration.
When magic talked about his father, he said:
“People often ask me, who do I like growing up, and I always said the first person is my father… Everything I do now in life I do it in the right way. It’s all because of him and what he had instilled in me.”
When Earvin was about five, his parents bought him a basketball; it was love at first touch.
“I would take my basketball everywhere I went, my want me to go to a corner store and get some milk and a loaf of bread… I would dribble that basketball all the way there and when if a school bus left at 7 in the morning I would be out there at 6 o’clock at the playground before the bus left working on my game.”
By the time he was in junior high, Earvin was a local star; however, his father didn’t cut him any slack. The two worked together on Earvin Sr.’s weekend trash hauling business. One winter morning, Magic’s father taught him a lesson that stayed with him for the rest of his life.
Learning from His Father
Magic recalled, “Some trash were frozen on the ground and he just rip off the top… [and I said] let me show how to do this… He grabs me and drags me in the snow back to where the barrels were and he said ‘you know what Earvin if you do this job halfway you gonna practice halfway as a basketball player, you’re gonna doing your homework as a student putting only half the effort. So I want you to get the shovel and chop the ice and get the paper that stuck in that ice and dump it on your truck.”
Magic said in an interview years later that after that happened, “Just then my work ethic went off to chart because I became a perfectionist then.”
The Magic Begins
Earvin “Magic” attended a predominantly white Everett High School from 1973. His basketball teammates initially tried to freeze him out of the offense but at 6’7” with a ball handling of a point guard, he emerged as the leader of the team after dominating the game at 36 points, 18 rebounds and 16 assists. After the game, a local reporter approached Magic, saying they wanted a nickname for him. His exact words were: “Somebody has a name Doctor J… Somebody has the name Biggie… I wanna call you Magic.”
“I never thought in my wildest dream that people will really call me Magic but I had to admit it fit my game and my personality.”
The flashy nickname didn’t get rid of Magic’s willingness to work on or off the court. He held down multiple jobs simultaneously: working in a convenient store and cleaning the offices of two African-American businessmen.
“I didn’t know African-Americans owned buildings and car dealership and things of that nature so when I meet Gregory and Joe Ferguson they help me by saying, ‘you know what, you should also dream of becoming a businessman’.”
Meanwhile, Magic’s other dream started to take off during high school. As a senior, he led Everett to the State Championship. In a flash of victory, Magic’s high school coach, George Fox gave him a heads up saying that “Earvin there is somebody out there in this country today that got skills just like you and he might outwork you and he might be better.” Larry Bird was that guy.
Competing with Larry Bird
Magic attended Michigan State and there he continued to shine and in his sophomore years, the Spartans made it to the NCAA finals where they’ve faced Indiana State and that guy—Larry Bird. It was the most heralded championship showdown of all time and Magic, who had the better supporting cast, was dominant. And as Magic recalled and jokingly said “…yeah Larry I got that one over you.”
The Los Angeles Lakers made Magic Johnson the NBA number 1 draft pick in the summer of 1979, he was 19 years old at the time. Magic signed a five–year contract with a package worth about $500,000 a year. However, the highest paid rookie with a five–year $3.25 million contract was—yep, that other guy—Larry Bird who was drafted by the Celtics.
Teaming up with superstars center Kareem Abdul Jabbar, Magic helped lead the Lakers to the NBA finals against Philadelphia in his first year. The Lakers were up 3 games to 2 but in Game 5 Kareem rolled an ankle. On the flight to Philly, the team was demoralized. Magic recalled then, “I went and sat on Kareem’s seat and I said, ‘never fear Magic is here’ and they started laughing and I said, ‘let me tell you guys something, I’m not going 5 hours all the way to Philadelphia to lose to the 76ers and guess who will play center—me.”
During their game against the 76ers, Magic was phenomenal, scoring 42 points, holding down 15 rebounds, 7 assists and leading the Lakers to the Championship. To ensure that Magic will bring the team more future championships, Lakers’ owner Jerry Buss signed Magic to the biggest and longest contract extension in the NBA history—a $25–million dollar deal that would keep him a Lakers for 25 years. Magic remembers that big money, saying, “You know, I must do something good with this money, I’m not going to blow it.”
Inspired by his mentors, Magic started looking for investment opportunities. When he heard about a chance of buying a radio station in Denver at a bargain price, he sensed an opportunity. It was a gut feel, the kind that Magic had on the basketball court. He offered his teammate a chance to join him in a deal and as he recalled, “They look at me like I was crazy so I went and raised the money anyway and the deal was about a million dollar to offer a station and I said YES, so I took the check went to the locker room and show it to the guys. Right then they found out that I knew business.”
His teammate Kareem Abdul Jabbar, on the other hand, did not have the same instincts. In 1986 making 2 million dollars a year, Abdul Jabbar faced financial disaster, charging his business manager with mismanaging millions of dollars. For Magic, it was a wake-up call about taking care of his own finances. Magic felt really bad because he look up to Kareem, and most Afro-American athlete end up broke and Magic learned from it.
Learning a lot of lessons from many financial tragedies he said, “I can’t let this happen to me so I got to get rid of everybody and get me the right people in place and I got to really signed my own checks – all of that.”
Magic also took full control of business on the court. In 1984, he made his fourth trip to the NBA Finals, this time against non-other than the Boston Celtics and Larry Bird. To many fans and the media, it was more than just a basketball game.
David Stern, who has been an NBA commissioner for 28 years said, “The one hall of fame team of the Celtics and the show time guys from L.A. and the clash of styles made it into the clash of civilizations.”
You have two of the greatest players who played the game—one black, one white and they’re going up against each other head to head. Magic transcended race as did Larry. The riveting series culminated in a Game 7 showdown, but it was not Magic’s night. In fact, Magic blew some key plays and lost embarrassedly. It was his first real failure in the court.
Magic told about that losing with the Celtics, “I sat there in the dark the whole summer in my house, I didn’t go outside that much. I put my whole life working out because I had to redeem myself.” And it didn’t take long.
Magic and Larry faced off again in the finals the following year and Magic and his Lakers finally got their first ever win against the Celtics—a win that made Magic “the happiest guy on the face of the Earth.”
Magic Tries His Hand at Business: Starting NBA Licensing Enterprise
Magic celebrated the off-season by focusing on his other passion—business. He asked legendary Michael Ovitz to help him learn the ropes but Ovitz said no, Magic recalled that “It was the first time magic didn’t matter.” But he didn’t give up, he started calling Ovitz every other day and he came to him and said, “Look I heard what you said, I want you to make an exception and I want to learn.”
Ovitz’s mentoring quickly paid off. In 1988, with the NBA soaring in popularity, Magic realized that the league was making multi-million licensing players’ name on t-shirts while the players only get a small slice of the proceeds. He wasted no time confronting Commissioner David Stern who said the league owns all the licensing.
To this day, Stern won’t talk the details about his deal with Magic. He became the first active NBA player to have his own licensing deal. When the Lakers won another championship later that year, Magic said he sold more than 150,000 t-shirts in only 4 days.
Magic now turned his thoughts beyond basketball and he was thinking big. Something else clicked for Magic as the Lakers bus rolled through decaying black neighborhoods in cities like Chicago, Atlanta and Detroit.
“I’m seeing vacant houses, vacant building and so much blight in the urban community and I was really disturbed by that.”
According to Cory Johnson, Editor-at-Large of Bloomberg Television, “Magic saw the black community fall apart… when a white CEO drives his way he sees these black people. When Magic drove… he sees diversity and he saw opportunity.” But before Magic can do anything to bring dead zones back to life, he would have to face his own devastating crises.
Getting Diagnosed with HIV
On October 25, 1991 Magic Johnson was suddenly called back to Los Angeles for a meeting with the Los Angeles team doctor. He recalled, “I’m sitting on the doctor’s office and he began to tell me that I have HIV and I was just devastated.” Magic’s thoughts raced to his wife, Cookie, they were just married two months and she was pregnant. He told everything to his wife who supported him and said, “We’ll do this together.”
Magic shared the news to his teammates and then he got a call he’d never expect, from his old rival, Larry Bird. He spoke about a year later in an HBO special saying, “When something’s happen, there you find out who really your friends are and people who really care about you.”
Despite the toxic atmosphere around HIV and AIDS, Magic decided to go public. His decision surprised everyone, “I told them [his parents] we’ve got to make it better for the world because if I don’t come out then this disease will go on and will keep spreading.”
Magic made a gut-wrenching announcement that is now burnt in the memory of basketball and fans, “Because of the HIV virus that I have, I think that I have to retire from the Lakers today.” It instantly made him the new face of HIV and AIDS adding that, “I would now be a spokesman for HIV virus.”
Magic was honest about how he got HIV—non safe sex on many different partners. Just like that, nearly $12 million worth of endorsements were history all along with his basketball career. But the fans didn’t disappear; they rally into his side by voting him into the 1992 All-Star Game. He turned in a stunning MVP performance and later in that year, he won the gold medal in the Olympic dream team, but he couldn’t walk away from the thrill of the game.
Less than a year into his forced retirement from basketball, Magic floated an idea of a comeback but some of his superstar friends, like Karl Malone, refused to play with him on the court. He said, “After I gone to the Olympics and thinking of returning into the NBA, a lot of guys came out against me. Of all the things I’m going through with the HIV, I think that really hurts me.”
Focusing on the Johnson Development Corporation
For Magic, the game was over and he traded his jersey for a suit and began laying in the groundwork for a business career. He bought a 4.6% ownership of the Lakers for a reported $10 million and he formed the Johnson Development Corporation, which he hoped would make him a winner in a new kind of game.
The riot that swept through Los Angeles in April 1992 turned much of South Central LA into a wasteland. Magic Johnson looked at South LA and saw opportunity. There were no first run theatres in South LA because investors didn’t know the area, they thought it’s a war zone riddled with gangs and violence.
Johnson Development Corporation, asked several investors to invest on South LA; however, most refused because they couldn’t see any return on their investments.
Magic and his group wanted to prove them wrong and wanted to develop the hilly area. Peter Guber, then head of Sony Pictures and one of the investors they’ve invited, agreed to a meeting, saying that they wanted to discuss a country not far off with a theatre going audience, where people love movies—and also speak English.
In early 1995, Sony agreed to partner with Magic after he had contributed about $2.5 million. Halfway through the construction, local gang bangers shut the project down. This was the moment of truth investors had feared the most. Magic and partner Ken Lombard faced the crisis head on. Magic agreed to hire some locals as part of the construction crew and he laid down ground rules to ensure that the theatres would be violence–free.
With violence ruled out, Magic then faced the next challenge—pooling audiences. The solution that he came up with was to customize or “Magicize” his theatre for the South Central community right down to the concession people. He said, “We actually customized the menu to fit the demographics of the community.” During the opening of the Magic Theater, they’ve sold hotdogs quantity in one night that could otherwise be sold in 30 days on other suburban communities. He recalled, “Minorities don’t go to dinner in a movie, they’ve gonna have dinner right in the movie that is why I have sold all the hotdogs.”
The Magic Johnson Multiplex in South L.A. was a slam dunk and became one of the top grossing theatres in the country. Sony and Magic quickly followed theatres in Harlem, Houston, Cleveland, and Atlanta.
In 1996, Magic was back in the game for LA Lakers. After four years since he has retired because of HIV, he’s back for another show time. He would recall that moment, “The first time I touch that ball I said, ‘boy it felt good’.” Magic returned with the same energy and he’s always in the right place. Still, Magic knew he has his moment when, despite putting up good numbers, the Lakers failed to advance to the Play-offs at the end of the 1996 season. He retired for good, saying:
“It’s over and I’m happy that it’s over.”
With his wife Cookie by his side, he spent much of his time working on his Magic Johnson Foundation to raise awareness and funds for AIDS and he zeroed in on a new business idea—one that potentially put him on every urban neighborhood in America.
Starbucks in South LA
Driving around LA, Magic noticed Starbucks on nearly every corner except South Central. Gregory Eaton said that Magic understood that black people drink coffee too. He understood that Starbucks have great products and he thought of bringing it to the black community. He still had a problem though; Starbucks might not consider doing business in notorious areas, let alone places like South LA. Magic pulled it off in part by choosing the site that seemed perfect for Starbucks—a place that was teeming with potential customers.
Magic brought Starbucks CEO Howard Schultz to Los Angeles to see first-hand what he was talking about. Magic recalled that Schultz was very impressed with the management team—how they ran their theatres, how clean it was. Magic learned from the deal that, “Sometimes you have to bring your potential partners to the place to let it see for themselves.”
He opened his first Starbucks in 1998 in a South LA shopping center, not far from his movie theatre in Baldwin Hills—once again he ‘Magicize.’ The place became a ‘home away from home.’ His initial deal with Schultz gave him 50% ownership of 10 Starbucks. They did so well that Schultz gave the go–ahead for 30 and later, 125. Magic would go around early in the morning, checking his several Starbucks sites and said that, “I’m a detail–oriented guy, I’m a hands–on guy, I’m a control freak.”
His Net Worth Continues to Grow
Five years into a successful entrepreneurial career, Magic tried to work his magic on a different stage—a TV show known as “The Magic Hour.” It only last for 8 weeks—a rare failure for him. Although the show was a bust, it was great to see Magic looking so healthy. With daily medicine and workout, the HIV virus became controllable and he was beaming with energy.
His main focus was raising the kind of investment dollar that could turn the whole minority community around. Magic took his business to a new level and years before he had gone to CAlPERS, the giant pension fund for California’s public employees and convinced them that investing on inner city project could be profitable. With CAlPERS’ money, Magic and his partner bought and developed the Ladera Shopping Center and transformed it into a place that became a pride of the community and one that they’ve supported—a very successful venture on Magic’s part.
Magic also wanted to launch his own investment funds, one that could pull him hundreds of millions from investors willing to invest into the urban market. He partnered with Bobby Turner, Chairman and CEO of Canyon Capital Realty Advisers, who thought it would be easy to raise the money.
His capitalization target was $300 million, a sum that Canyon thought can be raised in 6 months, Magic knew better. For two years, he and Turner crossed the country and their persistence paid off. The $300 million was launched in 2002 and Canyon was able to underwrite $1.5 Billion on the inner-city projects, like housing and commercial ventures in 13 states.
Magic’s biggest deal was close to his home. In 2003, Canyon-Johnson decided to gamble on downtown LA and bought the Trans-America center, a 32 story office tower in a sketchy neighborhood not far from the Staples Center where the Lakers play. With this purchase and success, it let them raise capital on their next project for just two and a half months.
Despite the growth, Canyon-Johnson Urban Investment ride has not been entirely magical. In his investment in Brooklyn, community and union activists attacked Magic for his investing in luxury condo instead of affordable housing and for not giving all of his workers benefits. Magic explained that he does care for workers and he grew up with the union because his parents were also workers and he responded to their concerns.
On November 7, 2011, Magic Johnson marked the 20th anniversary of his gut–wrenching announcement that he was HIV positive. In a statement he said, “God is good. Here I am 20 years later. Wow. What a blessing!” He also added that, “I have a great wife, 3 kids and have a granddaughter now and that’s keep me going.”
Magic’s ownership sale of the LA Lakers and Starbucks in 2010 went for an estimated $100 million according to the Los Angeles Times. His personal net worth today is reported to be half a billion dollars.
He recently made another big break when he announced the launching of the big cable television network, Aspire.
Magic has demonstrated to us all that a person can do good and do well at the same time. Los Angeles owner couldn’t say no to Magic when he let a group of investors in a successful $2 billion bid for the historic team. Magic now has a place in the owner box.
- Has a 13-year career in the NBA
- Received 3 MVP NBA Awards
- Played 5 National Championships with the Los Angeles Lakers
- Has played a total of 874 regular season contests in the NBA
- Has a per game average of 19.7 points, 11.4 assists, and 7.3 rebounds
- Has an official t-shirt licensee of the NBA, NFL, NHL and NCAA
- Appeared in nine NBA Finals
- Los Angeles Lakers first overall NBA Draft in 1979
- Played as point guard for the Los Angeles Lakers
- Operates youth and adult basketball camp in California and Hawaii
- Created the Magic Johnson Foundation
- Joined the National Commission on AIDS in 1992
- Voted in 1996 as one of the 50 NBA Greatest Players of All Time
- Inducted into the Naismith Memorial Basketball Hall of Fame in 2002
- No. 17 in the ESPN SportsCentury 50 Greatest Athletes of the 20th Century
- Compete in the 1992 Summer Olympics for the US ‘Dream Team’
- Founded the Johnson Development Corporation
- Purchased the Los Angeles Dodgers in 2012
- Became an advocate of the prevention of HIV/AIDS and safe sex
- A well-known businessman, motivational speaker, philanthropist and broadcaster