By ELIZABETH HAYES
Since retiring from pro basketball for good in 1996, Earvin "Magic" Johnson has gained national acclaim for his successful chain of inner-city cinemas and shopping centers.
But like an NBA team preparing for the playoffs, Johnson is about to take his game that is, his business career to a new level of intensity.
Johnson, who oversees about half a dozen companies from his offices in Beverly Hills, is launching major new ventures in development, sports and entertainment, including:
* Shopping centers. With a $50 million commitment from the California Public Employees Retirement System (which could grow to $200 million), Johnson Development Corp. plans to build shopping centers in urban areas throughout the state areas that traditionally have lacked retail districts.
Johnson also plans to develop 10 to 12 Starbucks coffee shops and T.G.I. Friday restaurants per year in inner-city neighborhoods under partnerships he entered in February. By the end of this year, Johnson Development President Kenneth Lombard estimates the company will control $350 million in property, including the theaters.
* Management. Johnson is giving up his 5 percent ownership in the Los Angeles Lakers in order to start an athlete management business.
* Theaters. Under a five-year expansion plan, Magic Johnson Theatres a joint venture of Johnson Development and Sony Retail Entertainment would grow from the current 39 screens to 500 screens. This includes new multiplexes in the South Bay Pavilion in Carson, Cleveland, Chicago, San Diego, Brooklyn, N.Y., a second Atlanta location and Prince Georges County, Md.
* Entertainment. Under an agreement with Twentieth Century Fox, Magic Johnson Entertainment is developing feature films and television projects. "The Game," an hour-long drama starring Luke Perry set at a sports agency, will premier on ABC next fall. And Johnson and Quincy Jones are producing a two-hour drama for TNT called "Passing Glory," based on the true story of a secret basketball game in 1965 between the top white and black high school teams, which couldn't play against each other openly because of segregation.
Johnson also has a sitcom in development for the 1998-99 season and possibly a daytime talk show next year that he would not host.
To cap it off, Johnson will host his own syndicated late-night talk show on Fox Television stations in June. Called "The Magic Hour," the show will feature celebrity guests, comedy and music but no long monologues on Johnson's part, said Rick Jacobson, president of Fox's Twentieth Television division. Johnson is now preparing for his debut with diction and interview coaches.
How does he juggle all this?
"This guy doesn't stop working." said Lon Rosen, Johnson's former agent, who is co-executive producer of the talk show. "He wants to be a major, big-time businessman."
Indeed, Johnson describes himself as something of a workaholic. He cut his own production deals with Fox and ABC, and goes over the box-office figures for his theaters every morning after his daily workout. Although he tested positive for HIV in 1991, Johnson appears in top form and associates say there is no trace of the virus.
"I'm on top of everything every day because those numbers come out and that's the key. That tells me how the theaters are doing," he said in an interview.
Johnson said he's always had a knack for business. Even while leading the Lakers to nine NBA finals and five championships, he was preparing for life after basketball. His first venture was to produce T-shirts under license to the NBA, followed by a Pepsi distributorship. Even when he was on the road, he would meet with corporate CEOs.
"One thing I know, I know business," Johnson said. "People may think I'm a basketball player, but no, I know business because I research."
At the same time, Johnson relies on a trio of executives to advise him in specific areas following a philosophy of hiring "the best of the best and let them do their job."
One of Johnson's hires is Lombard, who formerly raised venture capital at Economic Resources Corp. and oversees the Magic Johnson Theatres and all real estate operations. These include developing financial partnerships, scouting locations for new theaters and shopping centers and negotiating acquisition agreements and leases.
The TV side is headed by Jodi Gomes, senior vice president of television development and production. She came to Johnson from Eddie Murphy Television and Lynch Entertainment.
On the film side, Tamara Gregory, a former executive at Hollywood Pictures, said the plan is to produce comedies and action movies with budgets between $20 million and $60 million, staying away from the urban drug culture theme.
Even with these deputies, Johnson says he is a hands-on chairman and chief executive.
"I do a lot of the work, but I will try to run him down because he's a tremendous businessman and I always want his input through the process," Lombard said.
Johnson takes pride in cutting deals himself, something he says he was taught by his mentor Michael Ovitz, the former head of Creative Artists Agency and later (and less successfully) president of Walt Disney Co.
"I go into ABC, I didn't send anybody else. I went into Fox. I don't need to send anybody," Johnson said.
He also personally recruited actor Perry. Johnson said people will be surprised to see that "The Game" is a mainstream show.
"Everybody thought I would remake 'The White Shadow,' but when they see ('The Game'), they're gonna' go, 'No way,' " Johnson said.
Associates say much of Johnson's success is due to his fame and charm which open doors from Houston to Hollywood.
"I've watched him walk in a room and the most stoic and most hard-balled executives melt in his hand. He has a charisma that's unbelievable," Gregory said.
He also has an attention to detail. Rosen recalled that when Johnson met with representatives of Sony before the theaters opened, he insisted that they stock strawberry soda and other fruit-flavored drinks, in keeping with the preferences of African-American audiences. Despite initial skepticism on Sony's part, the drinks sold well.
The theaters, which were built in unproven markets, are considered among the most successful in the country. The flagship Crenshaw Plaza Magic Theatre in Baldwin Hills, which opened in 1995, will soon expand from 12 to 15 screens with stadium-style seating.
Johnson has not struck gold with every venture. Deals to build theaters in Harlem and Queens, N.Y., have fallen through, due in part to the high cost of real estate there, difficulty in assembling parcels of land and fierce competition to build in densely populated urban areas.
In addition, Johnson did not secure rights to a cinema at The Plant in Van Nuys (the former GM factory site), after negotiations broke down over the cost of the land. The project will instead feature a 16-screen cinema from Mann's Theatres.
"When we walk away from a deal, it's not because we don't have the capital to do it. It's because it simply hasn't met our economic criteria," Lombard said.
Whether Johnson can attain his goal of adding 500 screens over the next five years is also in question, as competitors wake up to the buying power of urban neighborhoods.
"His formula to go into the blue-collar areas is really ripe at the moment," said Armando Aguirre, a retail broker at Grubb & Ellis Co.
But Johnson has an advantage over the competition: his name on the marquee. Also, each theater sponsors community activities, including blood-pressure testing, town hall meetings and a bookmobile.
"We're about making money, and we do that, but we're also about the social needs," Johnson said.
Whether Johnson can succeed in the syndicated TV market also remains to be seen. The late-night talk show graveyard is filled with the names of prominent celebrities, including Chevy Chase, Joan Rivers, Pat Sajak and Arsenio Hall.
"It's a highly crowded field and by definition, anybody coming into the business for the first time has a tough go of it," said Art Rockwell of Rockwell Capital, which does entertainment and media research.
Fox is banking that "The Magic Hour" will reach a broad audience. "He's magnetic on television. He's an international and American icon and entertainer," Jacobson said.
With a personal wealth estimated at more than $100 million, homes in Beverly Hills and Maui, Johnson doesn't have to take on such a huge workload. But Jacobson said Johnson didn't flinch when warned of the massive time commitment a talk show poses.
"He said, 'I'm all about work. You don't get to be a champion athlete because you just show up,' " Jacobson said. "He's not used to losing. He brings that spirit and drive and team atmosphere to the production."
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