NBA fans know former Los Angeles Laker Magic Johnson as one of the greatest to ever play the game. But his prowess on the basketball court has nearly been overshadowed by his incredible financial acumen off of it. In his post-NBA career, Johnson proves to be one of the savviest athlete-turned-businessman ever.
Like any good entrepreneur, however, Johnson has experienced his fair share of misses. There’s one financial mistake he made during his rookie season that the former point guard said he will regret forever.
Magic Johnson’s legendary career
In 1979, Johnson was drafted out of Michigan State, fresh off an NCAA championship win over Larry Bird’s Indiana State team. Johnson went on to become one of the greatest players in NBA history, redefining the point guard position.
In the ’80s, Johnson and Bird revolutionized the game. Their epic rivalry with the Lakers and Celtics attracted tons of fans to the NBA. It paved the way for Michael Jordan to take the game to even bigger heights a few years later.
Johnson won five championships with the Laker. But when he retired, it turned out he was just getting started.
The mistake Johnson will regret forever
Of course, before Johnson joined the NBA, shoe companies were falling over themselves trying to get him to sign with them. One of those companies — that’s now a household name — made Johnson an offer that wasn’t much at the time, but now would be worth untold amounts of money.
According to Yahoo Finance, a 19-year-old Johnson turned down Nike in favor of Converse, a brand that “everyone” wore at the time.
As the point guard explains, “This guy named Phil Knight came in, and Nike was only like one or two years old. He said he doesn’t have a lot of money but will offer me stock. I was 19, didn’t know a lot. And, so the rest is history.”
It’s hard for Johnson to be mad at himself. No one could predict Nike’s stratospheric rise to the top of the world of sports apparel. But no matter which way one looks at it, it is a massive mistake.
Magic Johnson’s net worth
Johnson’s costly choice does not mean he’s struggling financially. In fact, he may be the most successful athlete-turned-businessman. Last year, MoneyInc estimated his net worth at $600 million.
Johnson made this money thanks to strategic partnerships with companies like Starbucks, AMC Theaters, TGI Friday’s, 24 Hour Fitness, and multiple real-estate ventures. He also purchased a 4.5% stake in the Lakers for $10 million following his playing career.
If you look at how the valuations of NBA teams have skyrocketed in recent years, you realize that it’s a huge steal. Johnson sold the stake in 2010 for $50 million (a tidy $40 million profit) and started his own company, Magic Johnson Enterprises.
Yes, Johnson should have taken Phil Knight’s offer. But he’s been so successful and smart with his money that one can hardly blame him.