Magic Johnson’s illustrious transition from the hardwood to the boardroom is a lesson in strategic investments and community-centric entrepreneurship. From securing stakes in professional sports franchises to pivotal partnerships with giants like Starbucks, his business acumen has seen him amass a net worth of $1.2 billion.
Magic’s success beyond the basketball court can serve as a blueprint for young athletes aspiring to achieve similar financial and entrepreneurial success. Like on the court, Magic has made good and not so good decisions in business. But the majority were excellent decisions that made him what he is today for younger athletes (in business). For this reason, Billionaire Magic Johnson is now thought of by many as a businessman as much as he is an athlete.
Magic’s remarkable journey began with a vision shared in a 1990 interview, transcending the skepticism surrounding athletes in business. Over the decades, he built a diversified portfolio, with ventures spanning movie theaters, real estate, and the life insurance sector. His majority ownership in EquiTrust Life Insurance exemplifies his prowess, growing the company’s assets substantially.
Here’s a more detailed breakdown of the steps and principles younger athletes, like e. g. Patrick Mahomes, aspiring to achieve similar financial and entrepreneurial success could follow:
1. Start Early and Plan Ahead
Begin planning for life after sports while still playing. Magic Johnson started exploring business opportunities well before retiring, which gave him a head start. Young athletes should use their playing years to learn, network, and lay the groundwork for their post-sports careers.
2. Leverage Your Brand and Fame
Athletes have a unique advantage in their brand and fame. Like Magic Johnson, they should leverage this to gain access to investment opportunities, partnerships, and ventures that might otherwise be out of reach.
3. Identify and Target Underserved Markets
Magic Johnson’s most significant successes came from targeting underserved markets, particularly Black communities. He understood their needs and preferences, which were largely ignored by mainstream businesses. Young athletes should look for similar opportunities where they can serve a need that aligns with their knowledge and background.
4. Tailor Products and Services to Your Audience
Magic’s ventures were successful because he customized his offerings to suit his target audience’s tastes. Athletes should understand their market deeply and tailor their products or services accordingly to ensure strong customer loyalty and sales.
5. Cultivate Financial Literacy and Business Acumen
While athletes may start with an advantage in fame and initial capital, long-term success requires financial literacy and business acumen. Young athletes should invest in their education, seek mentors, and learn from successful entrepreneurs.
6. Build Strategic Partnerships
Magic Johnson’s partnership with Starbucks is a prime example of how strategic alliances can propel a business forward. Athletes should seek partnerships that can provide expertise, capital, or market access that complements their strengths.
7. Diversify Investments
Diversification is crucial for mitigating risk. Magic’s portfolio spans sports, real estate, entertainment, healthcare, and more. Young athletes should also diversify their investments to protect against market volatility and industry-specific downturns.
8. Embrace Long-Term Thinking
Magic demonstrated patience and long-term thinking in his investments. Athletes should focus on sustainable growth and long-term gains rather than quick profits.
9. Give Back and Build Community
A significant part of Magic Johnson’s success was his commitment to giving back to the communities he served. Young athletes should also consider how their ventures can have a positive social impact, which can enhance their brand and customer loyalty.
10. Stay Adaptable and Keep Learning
The business world is constantly evolving, as are the challenges and opportunities it presents. Athletes should stay adaptable, keep learning, and be willing to pivot when necessary, just as Magic has done throughout his entrepreneurial journey.
So in summary, Magic Johnson’s blueprint for success beyond sports is a combination of leveraging fame, strategic planning, financial literacy, diversification, and a deep understanding of potential markets. For young athletes, emulating these principles could pave the way for successful careers in business and investments after their sports careers have ended.
As Leonard Armato wrote in a Forbes article: „Magic knew his brand and delivered the same message over and over again until he perfected his positioning: the person that could bridge the gap between the traditional world and the black community. He worked and he worked and he worked— at becoming a better speaker, at meeting people important in business in growing his brand as the connector of cultures— “the pied piper of the black community”. And it worked, boy did it work.“
For me, Magic’s journey and success in the business world is always a great example to introduce to our athlete community and show them what can be achieved beyond sports – as an athlete-entrepreneur.