Magic Johnson was one of the best-known stars in the 80s and the 90s – but he got paid next to nothing for it.
The Los Angeles Lakers screwed Magic Johnson over when they offered him a 25-year, 25 million dollar extension. He was a bigger idiot to take it since that would lock his value to that rate, even if he did play like the superstar he was. There was no incentive to play if he was being underpaid.
But luckily, the Lakers realized they had done their legend dirty, so they offered him part ownership of the team itself. That was unheard of, and even by today’s standards, no active player owns a part of the team that they play for.
He took that money he made, and the money he made from the equity stake and invested it smartly, didn’t blow it on fancy cars and bling. Instead, he bought several businesses. He invested in Starbucks and Burger King, which he then turned into equity stakes in all the sports franchises in LA. Talk about going to Hollywood!
Magic Johnson was a smart man – he made sure he made his money, if not by salary, through businesses
Magic may not have had a good agent who fed him the correct idea of getting paid what he was worth, but he sure had a good business manager. He also did not have someone who could explain to him contraceptives, but that is a story for another day. He made sure he turned what he got paid into an empire that would last generations.
This man is as good as they come in terms of business acumen. He may have made one mistake in his entire career, which is not signing with Nike and taking cash from Converse. But for that time, it seemed like a good deal, because Nike was not as established as Converse was.
If that deal went through, we could be seeing the sports market in a different light. Michael Jordan would have never signed with Nike, and the net worth of Magic would have been more than MJ, Kobe Bryant, and LeBron James combined. But ifs and buts were coconuts, we would all be drinking Pina Coladas.