Magic Johnson Says One Of His Hardest Tasks Was Convincing Shareholders To Green Light A Starbucks Deal That ‘Changed Everything’
NBA legend Magic Johnson relies on his intuition when it comes to making business deals.
The billionaire holds stakes in several teams, including MLB’s Los Angeles Dodgers, MLS’s Los Angeles Football Club, WNBA’s Los Angeles Sparks, NFL’s Washington Commanders, and NWSL’s Washington Spirit, AFROTECH™ previously reported.
He most recently expressed interest in owning the New York Knicks, telling ESPN “First Take” host Stephen A. Smith that he’d be “first in line” if current Knicks owner James Dolan ever put the team up for sale, according to Fadeaway World.
Last year, Johnson expressed his excitement about joining the Washington Spirit’s investor group.
“I’m so excited to join the Washington Spirit’s investor group at such a pivotal time in the club’s history!,” he said in an Instagram caption. “Partnering with a visionary like Michele Kang and her team to advance the growth of the Washington Spirit and the NWSL is an incredible opportunity.”
Johnson has also shown an interest in investing in urban communities, which has been carried out not only through Magic Johnson Enterprises, formed in 1987 as an “investment conglomerate that provides high-quality products and services,” according to its website, but also in his early entrepreneurial days.
CNBC reported that Johnson launched the Johnson Development Corporation, which partnered 50/50 with Sony Retail Entertainment to open theaters in underserved communities.
The first theater opened in Baldwin Hills, CA, in 1995 and has since expanded to other cities, including Atlanta, Houston, and New York City.
“My movie theaters was crushing it in the inner cities. It showed people you can make money doing business in the inner cities of America,” Johnson said during a recent interview on Bloomberg’s “The Deal with Alex Rodriguez and Jason Kelly” podcast.
Johnson successfully persuaded Starbucks to consider opening locations in underserved communities. He had a sit-down conversation with then-Starbucks CEO Howard Schultz and showed him how well Magic Johnson Theatres were doing, claiming that they were the 10 highest-grossing theaters in the nation at that time.
“The hardest thing I thought I was gonna do was play against Larry Bird and Michael Jordan. The hardest thing was to go before the [Starbucks] board and then go into a movie theater packed with good shareholders and try to convince them this is a great move for Starbucks,” Johnson said on “The Deal.”
Johnson acquired stake in 125 Starbucks locations and ultimately sold them in 2010, according to TastingTable.
“That deal changed everything,” Johnson said, according to CNBC. “We built 125 stores. We made that deal happen and that’s what really put me on a path of success. … It showed everybody that I could drive ROI in urban America.”
In 2004, he also sold his theaters to Loews Cineplex Entertainment.
These strategic business moves enabled Johnson to redefine expectations around urban redevelopment.
“I became the first person to ever own Starbucks outside of Starbucks,” Johnson explained on “The Deal.” “We built 125 in 40 different markets across America. They all did extremely well. And that really gave me, first of all, the stamp of approval. It gave me the track record that I needed of success so I can move on to something else.”
