How Magic Johnson Achieved a Net Worth of $620 Million
Earvin “Magic” Johnson, Jr. is a retired American basketball player and entrepreneur. Born in Lansing, MI on August 14, 1959, he is 53 years old, and 6’9” tall. During his professional playing days, Johnson was known as the best point guard of his era. He was also an anomaly, a tall guard in an era where guards normally reached a maximum of 6’4”.
Johnson’s professional basketball career was interrupted between 1991 and 1996, and then from 1996 to 1999 before he finished out his career in 2000 with an additional full season.
Since the end of his professional basketball career, Magic Johnson entered business as an investor, founding Magic Johnson Enterprises in 1995 to organize and operate his business interests, and the Magic Johnson Foundation to handle his philanthropic efforts.
Johnson is one of the most successful former professional athletes in the world as of 2023. Johnson’s total net worth is $620 million as of January 2023, with a career earning total in basketball of $39.3 million.
Earvin “Magic” Johnson, Jr. began playing basketball as a child, the son of a General Motors plant worker, who practiced all day, every day. “June Bug” or “Junior” as he was called in his youth, was on the court before 7:30 many mornings, according to the NBA’s legend bio of him.
By the time Johnson reached high school, his exceptional height and years of practice made him a star. He was tagged with the nickname “Magic” as a 15-year-old, notching a triple-double as a freshman. In his senior year, Johnson led his high school to the state title with a 27-1 record with an average of 28.8 points and 16.8 rebounds.
Johnson attended Michigan State for two years to stay close to home before going professional at the end of his sophomore year; his swagger in college play meant that he was drafted first overall by the Los Angeles Lakers, the Lakers received the first pick, which they used to choose Johnson, as compensation for a trade with the Utah Jazz.
His Arrival in the NBA
Johnson made an immediate impact in his first year in the NBA, but suffered a significant sophomore slump (along with the Lakers), rebounding in 1981-82. Improving markedly, Johnson was a major contributor to the dynasty Lakers teams of the 1980s, including his decisive contribution to the legendary 1985 NBA Finals in which the Lakers broke an eight-series losing streak to the Boston Celtics dating back to their days in Minneapolis.
In 1991, Johnson announced that he had contracted HIV, the virus that causes AIDS. He revealed that he had gotten the virus from a woman he had had a one-night stand with.
The courage and honesty with which he owned up to his infection did much to dissipate the stigma of what until then had been thought of as a “gay disease.”
After playing basketball with the US Olympic Men’s Basketball “Dream Team” in 1992 and another 32 games with the Lakers in the 1995-96 season, Johnson retired from the National Basketball Association for the final time. He was inducted into the Naismith Memorial Basketball Hall of Fame in 2002.
Due to his unique 25-year contract with the Lakers, the back half of Johnson’s contract was paid as a USD 1 million annuity to minimize his hit on the team’s salary cap situation. His total salary over his basketball career reached $39,342,860, per Spotrac.
Shortly after his final retirement from basketball, Johnson founded Magic Johnson Enterprises, a holding company to organize his investments. Johnson is a highly active entrepreneur, investing in companies like Starbucks Coffee, Cinemark theatres, Burger King restaurants, and 24Hour Fitness (his clubs were branded as Magic Johnson Sports).
He formerly was a major part-owner of the Los Angeles Lakers, one of the first Black people and former basketballers to be involved in the ownership of an NBA franchise. He would be joined in the executive realm by former rival Michael Jordan in 1998 when Jordan retired from the Bulls and purchased an interest in the Washington Wizards.
After he retired from his investment in the Lakers, Johnson became the franchise’s President of Basketball Operations, making him the second most consequential executive in the team’s operation behind General Manager.
In 2006, Johnson became a part-owner of food services and facilities management giant Sodexo. He markets Sodexo food services in the United States. Johnson also works as an inspirational speaker. He does corporate events, personal appearances, keynotes, and other performances for a fee of $100-200k per appearance.
Johnson appears at the fifth rank on the Forbes list of highest-paid professional athletes. In addition to his now-retired stock interest in the Lakers, Johnson is a principal investor in the Los Angeles Dodgers, as well as the Los Angeles Sparks of the NBA. His annual salary from his investments and businesses is estimated at $22 million.
In his youth, Magic Johnson turned down a $100,000 offer of stock from then-fledgling shoe manufacturer Nike to endorse their shoes in favor of $100,000 cash from classic canvas sneaker maker Converse.
Converse was eventually acquired by Nike in 2003, so Johnson’s endorsement eventually ended up with the newer company, but without the stock. Johnson said much later that his failure to assess the growing value of $100,000 in stock was one of the youthful mistakes he most regretted in his life.
As an investor and business owner, Johnson has endorsed Starbucks Coffee, 24Hour Fitness, T.G.I. Fridays, AMC Theatres, Burger King, and of course, the team that he spent his entire professional career with, the Los Angeles Lakers.
Philanthropy and Charitable Giving
Immediately upon announcing his retirement from professional basketball because of his HIV diagnosis, Magic Johnson became a well-known advocate for AIDS/HIV prevention and safer sex. Breaking from the orthodoxy of the time, Johnson taught people that HIV could be spread by heterosexual as well as same-sex intercourse.
Founded in 1991, the Magic Johnson Foundation began to advocate for safer sex and has expanded into an organization to develop and improve opportunities for people living in diverse communities to reach for educational and social development that otherwise might be denied them by circumstances.
The Johnson Foundation’s three strategic priorities are HIV/AIDS, scholarships, and Community Empowerment Centers. Through Johnson’s philanthropic work, the Magic Johnson Foundation serves more than 250,000 individuals annually through its services and programs.
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