$40M to $620M: How Did Magic Johnson Build His Business Empire

The basketball career of NBA legend Magic Johnson was shortened because of his HIV infection. He announced his retirement immediately after the diagnosis in 1991. After winning the NBA MVP award in 1990, Johnson walked off from the league in his prime. During his time in the NBA, Magic was one of the highest-paid athletes in the world. So his retirement meant a loss of financial gains. Despite this, the Los Angeles Lakers legend has built an extraordinary business empire over the years.

Even though Magic’s salary wasn’t close to what athletes are getting now, it was still good. After calling it quits, the 5x NBA champion could have ridden into the sunset with what he had earned and lived comfortably. However, he chose to dive deep into the world of business.

The early life of Magic Johnson

Earvin “Magic” Johnson Jr. was born to Earvin Johnson Sr. and Christine Johnson in Lansing, Michigan, in 1959. He came from very humble beginnings, as both his parents worked blue-collar jobs. Magic fell in love with the game of basketball at a very young age and started working on his skills. He soon became one of the best high school stars in the country and was recruited heavily.

Magic decided to pursue his college education in his home state and committed to Michigan State University in 1977. He played two years of college basketball and led the Spartans to the NCAA title in 1979. He won multiple individual accolades for his impressive displays and his stock rose. The NCAA champion declared for the NBA draft in 1979 after two years of college.

Magic Johnson’s NBA career

Everyone knew he would be the #1 pick, and the Lakers won the race to the lottery with a coin toss, which ultimately decided their long-term success. Johnson took the league by storm and instantly made the team better. Interestingly, he lost the Rookie of the Year award to fellow NBA legend Larry Bird, who sat out the previous season after he was drafted.

Johnson was determined after the loss and led the Lakers to the title with some impressive performances. He made up for losing the ROY award by becoming the first-ever rookie to win the Finals MVP. He is still the only player to achieve this feat. Magic continued his upward trajectory and won three NBA MVP awards. Also, he helped the Purple & Gold lift five championships from 1980 to 1988.

In 1991, he retired from the NBA after the HIV diagnosis. Despite this, he played in the 1992 All-Star game and won the MVP award. He also played for the iconic 1992 Dream Team and won Gold in the Barcelona Olympics. Johnson then tried to make a comeback in 1996, but it did not work out. According to a report from Medium, Magic earned $40 million when he walked away from the league.

Mastering the game of business: The evolution of Magic Johnson Enterprises

Magic Johnson transitioned into the world of business and investments after his basketball career. He established Magic Johnson Enterprises to handle all his investments. He found early success with his investments in Starbucks, movie theatres and malls, Burger King, etc.

The Hall of Famer once admitted that he did not have much knowledge about business. He stated that legendary Lakers owner Jerry Buss, Interim CEO of Starbucks Howard Schultz, and Creative Artists Agency’s co-founder Michael Ovitz taught him the ropes of entrepreneurship.

He later understood the market and the trend of African-American families going to the movies. So he invested in theatres and malls. Magic said, “So I did a deal with Sony, and I built Magic Johnson Theatres because I did the research. We were the number one group of people going to the movies, but there were no movies, you know, movie theatres in our community.”

This move was an enormous success alongside the deal with Starbucks. He also had 31 Burger King outlets and invested in 24 Hour Fitness centers as well. Slowly but steadily, Magic started building his business empire from the ground up.

Pursuing Greatness: The billion-dollar investments of Magic Johnson Enterprises

Magic Johnson’s love for sports and the City of Los Angeles also led him to invest in sports franchises. Even though he sold his stake in the Lakers, he still has the desire to one day purchase the team. Johnson recently became the first African-American owner in the NFL when he and Josh Harris bought the Washington Commanders. He also owns a stake in the LA Dodgers, the LAFC, and LA Sparks showing his love for the city.

Magic has an estimated net worth of $620 million as per The Richest. On the other hand, Magic Johnson Enterprises reportedly has holdings of around $1 billion. According to the report, the firm has acquired numerous holdings, including 60% ownership of EquiTrust Life Insurance Companies, which is currently valued at $14.5 billion. Also, the company is reportedly involved in the $8 billion rebuild of LaGuardia Airport. The firm is in business with other major companies like Mitu, Walt Disney Imagineering, The Marvel Experience, etc.