Magic Johnson’s net worth: $650 million
Magic Johnson is considered one of the greatest basketball players to ever play the game. Today, he is one of the top 10 richest athletes in the world with a net worth of $650 million.
Earvin Johnson Jr., better known as “Magic” Johnson, is one of the most recognized and beloved basketball players in the history of the game. His last name and famous number 32 have been emblazoned upon many a jersey and worn by fans all over the world.
While playing for 13 years with the Los Angeles Lakers, the 6 foot 9 point guard quickly amassed fame and success for both the team and himself, earning big bucks along with it. Proclaimed as a legend by the NBA itself as well as devotees the world over, Magic Johnson has certainly put his stamp on the game of basketball.
Although he’s now retired, Johnson still possesses an astounding net worth of $650 million, up from the $600 million that was reported for him in 2019.
All that dough currently makes him one of the wealthiest athletes in the world, right behind Tiger Woods, and the 2nd richest NBA player of all time after Michael Jordan. While much of that revenue came from his years of playing, a large quantity of it was brought in through sponsorships, endorsement deals, and other businesses that Johnson is still involved with to this day.
Magic Johnson’s Early Life
Earvin Johnson was born on August 14, 1959, in Lansing, Michigan in a large family with 9 siblings. According to NBA.com, Johnson earned his nickname, Magic, when he was in high school at Everett High School. A sportswriter watched him take on 36 points, 16 rebounds, and 16 assists all within one game. While in high school, he also led his team to win the state championship in 1977.
He advanced to Michigan State University to play college basketball, where he continued to make waves. In his first year, his team grabbed the Big Ten Conference title, while in his second year he helped the team claim the 1979 NCAA Championship. Not many know that this is actually where his famous rivalry with Larry Bird began; Bird was attending Indiana State University and playing for the Sycamores.
His team went head to head with the MSU Spartans and lost. Magic Johnson and Larry Bird would go on to further stoke the flames of their rivalry throughout their NBA careers, Johnson with the Lakers and Bird with the Boston Celtics.
Magic Johnson only completed 2 years of university before getting drafted into the NBA. He went immediately to the Los Angeles Lakers as a first overall pick. From there, his success soared even higher. In his rookie season of 1979 – 1980, he drove the Lakers to score the NBA Championship and was awarded the honor of MVP (Most Valuable Player).
Then, aided by his continued “magic” abilities, the Lakers nabbed the 1982, 1985, 1987, and 1988 Championships as well.
The NBA, which had had a tough time in the mid-70s, began to explode like a firework in the 80s due to players like Magic Johnson. Millions of dollars started pouring in as viewership went up, and Johnson of course profited from this.
Converse signed an endorsement deal with him that would last 12 years, where he would appear in many ads and commercials, often with other NBA players. Other companies he signed promotional contracts with included 7 Up, Slice, and Edge.
In 1981, the New York Times reported that Johnson had signed a 25-year contract with the Lakers for $1 million a year, starting in 1984. Before that, he was making $460,000 a year, which in today’s current value would be a little over $1.3 million.
Jerry Buss, the owner of the Lakers, stated that he was confident about making a long-term commitment to Johnson and that even if he stopped playing at some point before the end of the contract, perhaps he could become a coach or general manager.
The contract made Johnson the 3rd player in NBA history to be signed for $1 million a year, and because of the length, it was the highest paying NBA contract in history at the time.
However, although Johnson had been promised $1 million a year for 25 years, this number often ended up increasing as the years went by and he became more profitable. Throughout his playing career of 13 seasons, he earned a total of $24 million.
Most Valuable Player
Johnson went on to receive the NBA Finals MVP award twice more in the 80s, as well as the general season MVP award three times and went up against Larry Bird and the Boston Celtics in several more championship games.
After being named Most Valuable Player for the 3rd time in 1989, Magic Johnson was offered a large endorsement deal with Pepsi, although it’s still not known for exactly how much.
Johnson was to appear in television, radio, and print advertisements, promoting Pepsi products. He joined the ranks of Michael Jordan, who already had a similar contract with Coca Cola.
In 1991, Magic Johnson received the news that he had tested positive for HIV during a physical before the season’s start. Upon learning of this, he then shared it with the world and announced that he would be immediately retiring from basketball.
People were shocked; it became a huge media sensation around the globe, and rumors spread as to how he could have contracted the disease, especially with the abundance of confusion and misinformation about HIV at the time.
Although it was an incredibly difficult time for him, and many called him a hero for coming out with the news, many companies Johnson was working with did not sympathize enough to continue working with him. The majority of his contracted brands announced that they were discontinuing their deals.
Nestle had signed him just 3 months before his HIV announcement and decided not to run any ads with him. Target and KFC also had contracts from 1991 which they dropped. According to the LA Times, all of his discontinued endorsements were estimated to have cost him $25 million.
Standing by Magic Johnson
However, just a few brands stuck with him; Campofrio, for example, a meat-packing corporation, had been using him for TV spots in Spain and said they would continue to utilize him after the announcement of his illness. Converse, his long-time sponsorship brand, continued with him until Johnson broke things off at a later time.
Olympics and Beyond
Despite his announcement and retirement, fans voted him onto the team for the 1992 NBA All-Star game in Orlando, though several other players were against the idea as they thought he was risking contamination if he should experience an open wound on the court.
Johnson ended up playing and leading his team to a win, even being crowned All-Star MVP.
That same year, Johnson was also selected to take part in the Summer Olympics U.S. basketball team, nicknamed the Dream Team because of all the NBA stars participating (Michael Jordan, Larry Bird, and Charles Barkley among others). They took the gold, 8 – 0.
Leading a New Team
During the 1994-95 season, Magic Johnson returned to the Lakers as a coach for a brief stint, and The New York Times reported that he was paid $14.6 million for it as a part of his remaining contract with the team. In that same year, he also explored possibilities outside of the NBA that would still allow him to play.
He formed a team called the Magic Johnson All-Stars, consisting of former NBA players and college players, which played competitive games around the world. It became quite well-attended, and eventually, Johnson was earning $365,000 per game.
Ultimately, Johnson staged a final comeback as a regular NBA player with the LA Lakers during the 1995-96 season at the age of 36, did fairly well, and then resolved to retire permanently. In the end, Johnson raked in around $40 million from his career with the Lakers.
Retirement and Entrepreneurship
Though some in his position might have been content to just settle down in retirement with what money he had made, Johnson’s career did not stop at basketball. He began to explore several business opportunities and later proved to be an extremely adept entrepreneur.
In 1994 he bought 4.5% ownership of the Lakers from Jerry Buss for $10 million, which he later sold for an estimated $50 to $60 million. In 2012, he also became co-owner of the Los Angeles Dodgers in a purchase that was made for a colossal $2 billion.
He also currently owns part of the Los Angeles Sparks (WNBA) and the Los Angeles Football Club, and used to own part of the Dayton Dragons, an Ohio minor league baseball team, but sold his stake in 2014.
Lastly, he served as the president of the Lakers’ basketball operations from 2017 to 2019 but then stepped down after he felt he wasn’t being treated correctly by the organization.
The Magic Card
He also formed Magic Johnson Enterprises, which today is reported to have a value of over $1 billion in all its various sectors. Subsidiaries have included Magic Johnson Theaters, a chain of movie theaters created from a partnership with Sony Pictures (since sold to Loews Cineplex Entertainment); Magic Johnson Productions, a promotional company; and Magic Johnson Entertainment, a film studio.
With his company, Johnson developed a pre-paid Mastercard called “Magic Card”, and according to his website, “He currently has controlling interests in EquiTrust, a $14 billion financial services company, ASPiRE, an African-American television network, and SodexoMAGIC, a food service and facilities management company.”
Johnson has also invested in real estate and joined in on projects which have reaped rewards, for example being part of the buying of the Williamsburgh Savings Bank Tower in Brooklyn for $71 million which was then transformed into a luxury high-rise.
He has had large investments in a variety of dipping ponds over the years, such as buying interest in a Pepsi bottling operation in Washington D.C. with Earl Graves, a successful publisher, which produced $44 million in profit in just its first year.
The Coffee Run
Johnson showed tremendous insight with his idea to partner with Starbucks to open multiple coffee shop locations in urban areas, such as Detroit, Washington D.C., and Harlem in New York City.
He approached Starbucks CEO Howard Schultz and forged a successful 12-year partnership, acquiring and eventually selling 125 franchised coffee shops.
Magic Johnson has also continued to appear in several commercials and ads representing various brands, which brings him millions in extra revenue.
In 2013 he participated in an AT&T commercial, joined by Larry Bird, as well as one for Encore Boston Harbor, a resort and casino, again with Larry Bird. 2017 saw him in a TV spot for Honda, and of course, over the years he has done numerous ads for the NBA.
Further sources of income for Johnson have included working 7 years as an NBA commentator for Turner Network Television, and then as an ESPN studio analyst on NBA Countdown.
He had also at one point founded a record label, called Magic Johnson Music, and promoted music events with his company, Magicworks.
The Magic Man Gives Back
Many of these business ventures have had the aim of giving back to the community in some way, whether it’s helping to develop underprivileged communities, empowering the disenfranchised, or bringing awareness to people about important social issues. Magic Johnson has not only succeeded off the court and into the boardroom, but he’s become a true humanitarian.