Magic Johnson was one of the greatest NBA point guards of all time for the Los Angeles Lakers – perhaps the greatest. Johnson has also enjoyed considerable success off the pitch as a businessman. He was an NBA broadcaster, basketball executive, and business owner. However, despite Johnson’s strong business acumen, he made a business decision during his career that he would likely want back if he could get it.
Here’s the story of how Magic Johnson made a deal with Converse when he could have gotten a lot more from Nike in the long run.
What Converse and Nike gave Magic Johnson
When Magic Johnson entered the NBA, he was one of the hottest commodities entering the sport in years. The league had experienced a considerable downturn in the late 1970s, and Johnson, along with fellow college basketball star Larry Bird, ushered in a new era. It was a few years before Michael Jordan emerged, so Johnson and Bird’s NCAA championship game showdown prepared fans to watch them go head-to-head in the NBA.
Because of this, Johnson was courted by major sneaker companies of the time. This included both Converse and Nike. According sports rush, Converse offered Johnson a deal worth $100,000. Phil Knight, the founder of Nike, also approached Johnson. At the time, Nike was known as Blue Ribbon Sports. That was before Nike became the powerhouse it is today as the biggest sneaker company in the world. Because of this, the company didn’t have much money to offer Johnson. Instead, they offered him $100,000 in stock options.
Why Johnson chose Converse over Nike
According black business, Magic Johnson’s decision to go with Converse over Nike was simple. He wanted the money. Johnson was still a young man at this time without an ounce of the business acumen he had acquired later in life. It’s hard for many young athletes to think about the future rather than the present, especially when presented with a lot of money at once. Johnson was no different from many athletes who have been in his shoes.
Looking back, Johnson said, “I never heard of stocks when I was 19, so I took the money.” It would be a decision he would later regret, as Nike’s stock would explode in the following years.
Magic Johnson’s eternal regret for not choosing Nike
It’s safe to say that Magic Johnson made the wrong call in this instance. The stock options offered by Nike in 1979 are worth $5.2 billion today. Johnson said that fact “kills me every time I think about it”. He even mentioned Air Jordan, noting, “I’m like a man, Michael Jordan would have made me so much money.”
Now, it’s impossible to know how successful Nike would be in just a few years. Plus, Converse was still a highly regarded shoe company. Ironically, it has since been acquired by Nike.
Still, no matter how you look at it, there’s no doubt that Johnson fumbled the bag when he went with Converse rather than Nike. But he’s also made a lot of great business choices since then. It was a valuable lesson, but it was one that was definitely close to his heart. Anyone would consider Johnson successful as a businessman and entrepreneur. Of course, if he had made a deal with Nike, he probably wouldn’t have to work right now if he didn’t want to, given his insane wealth.
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