Earvin “Magic” Johnson is viewed as one of the most successful athletes-turned-businessmen of all time, but even he has at least one business deal that he regrets passing on.
When Johnson joined the NBA in 1979, he was seen as one of the most talented prospects to ever enter the professional basketball league, and shoe companies were lining up to sign him to an endorsement deal. This was a $5 billion decision, he told Showtime’s “All the Smoke” podcast.
In the interview, Johnson recalled his rookie season with the Los Angeles Lakers in 1979, and how he was courted by three shoe companies: Converse, Adidas
ADS,
and Nike
NKE,
So how did he choose which one to team up with? He went with the brand paying the most upfront.
“Converse offered me the most money,” Johnson said. “So you know, when you grow up broke, you take the money. [Nike co-founder] Phil Knight came in and said, ‘Hey, I can’t offer you the same type of money, but I can offer you stock.’”
Nike was far from a premier basketball shoe brand in 1979, and Converse had a far larger presence in the NBA at the time, including endorsements with top players like Julius “Dr. J” Erving and George Gervin. Nike was still five years away from signing basketball legend Michael Jordan and creating the Air Jordan, and nine years away from the introduction of its iconic “Just Do It” slogan.
“I didn’t know nothing about it,” the Lakers legend continued. “My family didn’t come from money. See, that’s one thing that hurt us sometimes. When you don’t come from money, I didn’t even know what stocks was at that time. So I passed on the stocks.”
“ ‘I didn’t even know what stocks was at that time. So I passed on the stocks.’”
And what happened next? Nike Inc. held its initial public offering (IPO) the following year in 1980 on the New York Stock Exchange. The stock debuted at $22 a share in 1980, but has had several splits since — the split adjusted value for the IPO would be $0.17, according to Dow Jones Market Data. Shares of Nike now sit at just under $110 per share as of Friday’s close.
See also: When LeBron James chose Nike in 2003, he gave up $28 million — it could end up making him $1 billion
Johnson’s claim that his Nike stock and total offer package would be worth $5 billion today cannot be verified, however, because the offer occurred prior to the company’s IPO. And some reports indicate that the actual value of Johnson’s offer was actually much lower.
Regardless, Johnson expressed regret for not picking up Nike’s stock offer at the time.
“Can you imagine? 45 years. Five billion dollars that stock would’ve been worth today,” Johnson said while putting his hands on his head.
Representatives for Johnson did not respond to MarketWatch’s request for comment on this story.
Johnson’s deal with Converse was reportedly for $100,000 per year. Decades later, Converse currently doesn’t have a major presence in the NBA or the basketball shoe market. In fact, Converse is now part of the Nike family of brands after it was acquired in 2003 for $305 million.
While Johnson likely would have been better off agreeing to a deal with Nike, he’s still doing well, business-wise. He’s a new partial owner of the NFL’s Washington Commanders, after all, and has a net worth in the hundreds of millions, according to estimates.
Read on: LeBron James vs. Michael Jordan: Who is the GOAT when it comes to net worth?
