As of March 2017, retired American professional basketball legend Earvin “Magic” Johnson Jr. has a projected net worth of $500 million. This astounding figure is enough to rank him as one of the most successful athletes after retirement and one of the wealthiest African Americans today. How did he do it? After discovering he had contracted HIV, Johnson ventured into entrepreneurship and introduced popular brands to ethnically diverse neighborhoods through Magic Johnson Enterprises.
He formed partnerships with Starbucks (before it was cool), AMC Theaters, T.G.I. Fridays, and 24 Hour Fitness. In addition, he invested in urban real estate as well as companies providing services to under-served markets in the U.S through his Yucaipa-Johnson and Canyon-Johnson funds. He has awarded at least $1.1 million to community-based organizations focusing on HIV/AIDS awareness and prevention. Inspiring, right? Here is the full story of exactly how Magic Johnson accumulated a net worth of over $500m.
Born in August, 1959 in Lansing, Michigan, Earvin “Magic” Johnson always had a natural admiration for basketball from a tender age. Even before he joined high school (Everett High School), he had already resolved to play basketball as his career. Although the school was predominantly white and featured certain instances of racism, he was still able to perform well and graduate successfully in 1977. By this time, Magic Johnson was in high demand by some reputable and competitive universities. He would later join Michigan State University, where he led his team to a tournament championship during the 1978-’79 season.
Throughout his impressive performances both in high school and college, someone was watching closely: the Los Angeles Lakers. Soon, he was drafted to the first overall pick by the LA Lakers in 1979. His skills and ability to distribute the ball with impeccable speed resulted in his moniker: “Magic” Johnson. He used these skills to drive the team to the 980 NBA Finals in his rookie year, which they went on to eventually win. Within just two years, he had won both the NBA and NCAA championship, subsequently becoming one of the most popular and highly-valued players in the league.
To prove that he was not just a “one season wonder,” Magic Johnson would go on to win 5 more NBA championships over the next few decades, in addition to numerous other awards and accolades. Unfortunately, as he increased in age, his performance started to decline in subsequent years. In 1991, he made a public announcement of his HIV status and his wish to retire from the sport as a result. Since then, he has resolved to more recreational basketball and coaching and is a well-known philanthropist.
Magic Johnson Enterprises
Magic Johnson formally retired from professional basketball in 1996. This marked the beginning of his next chapter in life: entrepreneurship. Back then, NBA players were not as highly paid as they are now. Despite the fact that Magic Johnson had 5 NBA championships and at least 10,000 career assists in his record, he only walked away with approximately $18 million from the NBA and a few extra millions from endorsements. The first thing he did was to buy a 4.5 percent stake in the LA Lakers for $10 million, which turned out to be a lucrative investment in the long run. By 2010, his stake had risen in value to $50 million, so he sold it and started Magic Johnson Enterprises.
Through Magic Johnson Enterprises, the basketball legend progressed to make even more profitable investments. In 1998, he had also partnered with Starbucks to avail the coffee chain in economically-disadvantaged neighborhoods. You only have to look at the success of Starbucks today to realize the wisdom of that investment. A few days after selling his stake in Lakers, Magic also sold his 50 percent share in Starbucks, bringing his total revenue from the two deals to a reported $100 million.
Under the same Magic Johnson Enterprises umbrella, Johnson also invested in Magic Johnson Theaters. He used the same principle as before, putting up theaters in less-fortunate neighborhoods. Of course, this turned out to be a massive success as well. But perhaps his most significant investment was in the Los Angeles Dodgers, which also involved a number of partners to purchase in 2012 for a whooping $2 billion.
Magic Johnson also teamed up with a Century City investment fund – Canyon Capital Realty Advisors – to form Canyon-Johnson Urban Funds that develops properties in under-served urban neighborhoods. Some of the projects under the funds include condominiums in Oakland, a retail and residential complex in Chicago, redevelopment of a previous rail yard in Boston, and the $28 million One Santa Fe residential, office, and retail complex in downtown Los Angeles. Johnson plays a major role in presenting proposals to neighborhood residents and public officials. Despite his retirement from NBA in 1996, the tall Magic Johnson is still highly influential.
He dresses professionally, smiles easily, and is very patient. He prefers being called by his first name – Earvin – instead of his moniker while conducting business. Richard Riordan, former mayor of Los Angeles, commended Johnson’s financiers for teaming up with the former athlete in the Dodgers deal, citing his influence in both the game and industry. He also added that his star power would help efforts to revive the Dodgers brand.
Owing to the massive wealth he has accumulated for himself from his successful basketball career and business endeavors, Magic Johnson lives a pretty comfortable lifestyle. His net worth has allowed him to own luxury homes in different areas of California that are valued at tens of millions of dollars. Additionally, he owns a fleet of luxury cars such as Ferrari, BMW, and so on, as well as a private jet.
He is involved in a lot of charity work and has founded his own philanthropic foundation called Magic Johnson Foundation that deals primarily with HIV/AIDS awareness and helping its victims. His own infection resulted from being physically involved with numerous women. He has a son with Melissa Mitchell, who grew up with his mother but under great care of his father as well. He also has a son and an adopted daughter with his wife, Earlitha Kelly, with whom he wedded in 1991 in a private wedding.