Magic Johnson remains the gold standard for professional athletes turned businessmen. But even he has made decisions he would like to have back.
During a promotional appearance this week for McDonald’s, the retired Los Angeles Lakers great shared his one enormous business regret — choosing to sign with Converse over Nike in 1979. Johnson had been offered options in Nike stock to sign with them but chose the cash that was being offered to him by Converse instead.
“I never heard of stock at 19 years old, so I took the money,” Johnson said. “You know, usually [you think] ‘I gotta take this cash!’ Man, I would’ve been a trillionaire by now. You think about 1979, getting that stock then and what it’s worth today? Yikes! So that kills me every single time I think about that. I’m like, ‘Man, Michael Jordan would’ve been making me so much money.'”
Johnson’s infamous decision was depicted during a recent episode of HBO’s “Winning Time.” The Basketball Hall of Famer, who is being portrayed by actor Quincy Isaiah, was shown meeting with Nike co-founder Phil Knight. In the episode, Knight offered Johnson $100,000 in Nike stock options as well as a $1 royalty for every shoe sold. The show ran a graphic estimating that Johnson cost himself $5.2 billion by turning down that offer.
While it is hard to gauge how accurate the numbers given by the show were, we know Nike had its IPO (initial public offering) in Dec. 1980, debuting at $22 per share. Since then, Nike stock has split a total of seven times on a 2-for-1 basis each time. That means someone who purchased just one share at the time of Nike’s IPO would own 128 shares today. Nike’s closing price on Wednesday was $127.49, meaning that the one IPO share would be worth over $16,300 (not even counting the quarterly cash dividend Nike has paid to shareholders since 1985 and any such reinvestment of those dividends). It is also probably safe to say that Johnson would have owned a whole lot more than just one share of Nike if he had accepted their offer back then.
Granted, it is tough to fault Johnson for his choice as he was just a teenager at the time. Converse was the big dog on the porch during those days, and even Jordan was seen as taking a risk when he signed with Nike five years later in 1984. Johnson also got to star in some memorable Converse commercials with Larry Bird and other NBA stars.
Converse Commercial with Magic Johnson, Isiah Thomas, Kevin McHale, Mark Aguirre, Bernard King & Larry Bird
— Ballislife.com (@Ballislife) May 4, 2020
Johnson, who now has an estimated net worth of over $600 million, has also succeeded with many other business ventures. He has several cash-cow investments (including his ownership stake in the Los Angeles Dodgers and his investment company Magic Johnson Enterprises, which owns countless businesses and franchises). Now 62, Johnson has made sure to pass on his business acumen to the next generation of NBA stars as well.
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Photo: Mar 23, 2018; Omaha, NE, USA; NBA former player Magic Johnson watches during the first half between the Clemson Tigers and the Kansas Jayhawks in the semifinals of the Midwest regional of the 2018 NCAA Tournament at CenturyLink Center. Mandatory Credit: Kyle Terada-USA TODAY Sports
