Earvin “Magic” Johnson says there’s nothing new about his business career.
As a youth growing up in Michigan, he had a paper route, shoveled snow and cleaned offices. During the years he was leading the Lakers to five NBA championships, Johnson launched businesses on the side and sought practical advice from Lakers owner Jerry Buss and, later, agent Michael Ovitz.
With his basketball career now over, Johnson, 38, said he is focusing on his expanding empire, which he oversees from a Wilshire Boulevard high-rise in Beverly Hills. That includes his upcoming late-night talk show. Johnson clearly loves to talk business, spending nearly two hours with Business Journal editors and reporters. Here are excerpts of that conversation:
Q: With all your various businesses you’ve got theaters, you’ve got a development company, and now you’re getting into show business is your heart in one place more than another?
A: I think I’m just like any other businessman. A businessman very rarely just has one thing going on. I’m a person who has to have a lot on his plate. You’ve got to have people in those positions who can actually run the business. I get the best of the best and let them do their job.
Q: You’ve helped create jobs in the inner city through your theaters. But, at the same time, many say that what’s really needed there are factories with high-paying jobs. Do you have a perspective on that?
A: The problem has been the media more than anything else because (of stories emphasizing crime). That scares a lot of people from going into the inner city. But hopefully what we’ve done, through the theaters and through Johnson Development, is show them that they can. But they’ve got to do it with the right partner, somebody who is in the community. You can’t bring in somebody from the suburbs to try to run an inner-city industry. It’s not going to work. You’ve got to have somebody who understands the people, the workforce.
Q: What do you say to those people who ask, “When are we going to get higher-paying jobs?”
A: A job is a job, especially when you have a good job. Our jobs are good jobs. They’re not high-paying jobs, but they’re good jobs. And when you talk to young people, they all like to be in that theater and that’s the people we’re employing. We’re taking them off the street. The other people, yeah, they have a gripe and I’m happy that they do want high-paying jobs. That’s good. It’s going to take more than myself.
I can say all the good things you want to hear, and you can write them down, but the bottom line is, a company has to make the commitment. They have to say, “We need a factory in Los Angeles, and we’re going to put it in South Central.”
Q: You seem to be carrying a big load. Because of your success, do you get a sense sometimes that everyone is relying on you to solve the world’s problems?
A: Being in the inner city is home for me. I grew up in the inner city. I don’t look at it as a burden. You would like other people to come and help you out. It’s tough because a lot of people talk but they don’t walk the walk.
I’m an action guy. I’m not about talking, I’m about, let’s make it happen. That’s why we’re able to get the partnerships with major companies. I don’t have time to sit here waiting to see if somebody’s going to do it. I would like to have that time, but I don’t.
Q: Can you give us some sense of how you guys operate? Who gives the green light?
A: There’s only one green light and that’s me (laughs). We don’t have a problem here. Ken (Lombard, president of Johnson Development) handles the day-to-day of both companies and I have empowered him to make decisions. We don’t have arguments.
One thing about Ken and I, we have the same mentality. We’re workers. All we do is work. I don’t play golf. I don’t have other hobbies. I work. I read the numbers. We’ll sit down and he has his copy and I have mine, we’ll go over it, what we did, how many people came through the door, who was seeing what movies.
(In starting a new project), I come in as far as the marketing of it, the promotional side. I go in and take all those meetings of the community. Once we make the deal with the company, then Ken goes about his way, the leases, where we’re going to go and that whole thing.
I know business, I know numbers, but he knows leases, he knows how to deal with the developer. He gets a great sense of whether they want us there.
Q: Have you put sports behind you? No lingering dreams of owning or coaching an NBA team?
A: No, because I gave up my ownership now and I’m managing athletes. We’re going to sign a lot of basketball players. You can’t be both owner and manager. We’re going to manage you from A to Z.
Q: You said you were always interested in business. Give us a sense of when that started.
A: I guess back when I was cleaning offices as a young kid. I’ve always had a job, I’ve always worked. I’ve always been a person who asked a lot of questions. I never have thought I knew it all, nor do I think I know it all now. And I think that’s what’s made me a good businessman because I’ve talked to a lot of great businessmen. And I still do today.
My dad had a little company where he hauled trash and rubbish for people and I was always a part of that. And then that’s when I started hustling myself in terms of newspaper routes, doing lawns and shoveling snow and had my little account.
I went from college to pro and I said, “OK, I’ve got to concentrate on basketball.” And then I started going out with Dr. Buss a lot, going to lunch and talking to him and telling him my dreams and he took me step by step. He taught me all he could. Then I got with Lon (Rosen), he was my agent at first. I got mad one day. I said, “Why are all these people making money off my face on these T-shirts and I don’t get a dime?” That was my first real business, to get a license to make my own T-shirts, and then it finally went from my own to everybody in the NBA. Then I met with Michael Ovitz and that was my real, real true test of business.
Q: This was early on?
A: Yeah, I went to Lon and said I want to get into big business. So he said, “OK, let’s meet with a few people.”
So we come into the room (with Ovitz), and he’s sitting there and he says, “I’m a brutally honest person, so can you take that?” I said yeah. He says, “Well, athletes are dumb. Because they don’t care about anything other than sports or they don’t know anything other than sports.”
Then he says, “What makes you different than the rest of the athletes?” So I told him, “I’ve always had a passion for business and I will do what I have to do to be the best businessman.” He said, “I’ve heard that before.” I walked in 6 (feet) 9 (inches) and I’m leaving about 4 (feet) 9 (inches).
A couple weeks later, he brought us back. He says, “The same thing it took to make you a great basketball player is the same thing it’s gonna take to make you a good businessman. Are you willing to do that?” And I said yes.
He said, “I did some checking about you. You are different. They told me that you’re different from everybody else. I’ve decided to take you on. Here’s your homework.” He threw me one of your L.A. Business Journals, the Wall Street Journal, the Times business section, Fortune … He said, “From now on, forget that sports page. If you want to be a real businessman, these are the magazines you’re going to have to keep up with.”
Q: Are you involved with Michael Ovitz in putting together the NFL stadium proposal for Carson?
A: We’ll see. He’s got a vision and a dream. If he gets it, you’re going to see something unbelievable. I’ve been involved in those talks. Michael is the type of person who will designate the role. He’s very secretive and private.
Q: What did Ovitz say when you told him you wanted to go into theaters?
A: He loved it because at that time he was making the biggest movies in history. So he understood the business was a great business. We went to Mayor Riordan because we wanted to tell him what we were doing because he’s a businessman. He said, “That’s a great idea.”
Q: How’s your assessment of Richard Riordan’s performance as mayor?
A: I like the fact he was a businessman, so if I went to him and said we’re interested in being in the inner city, he understands that. So with that, I think he’s doing a good job. I think it’s too bad we’re going to lose him. I think he understands jobs.
Q: What’s your take on football? What’s going to happen?
A: We’re going to get a team. Now we just have to get a buyer. I thought maybe Mr. (Rupert) Murdoch was going to be that actual buyer. That still may happen, I don’t know. Maybe (former Dodgers owner Peter) O’Malley will jump into it. I don’t know that either. But football is going to definitely come to L.A.
Q: You don’t think it’s going to happen at the Coliseum?
A: The Coliseum is out, because the owners want the Super Bowl, they want a brand-new stadium. They’ve been adamant about it. They’re not changing, not wavering. See, the owners like L.A. They love L.A. This is where they want the Super Bowl. If we got a stadium, L.A. would get the Super Bowl every two years, I bet.
Q: Are you talking to Michael Ovitz and Rupert Murdoch about football?
A: I’m talking to everybody who’s going to make it happen because I want to be part of it. I’m the biggest football fan out here, and we need minority participation. We need somebody who can go out and sell tickets to the fans, and that could be me. I’m going to pay my price to get in the group, whoever that is. I hope that I get that opportunity.
Q: Are you seeking a stake in both the stadium and the team?
A: I would love to be part of the stadium, but a lot of times they try to just keep the stadium to themselves, which is understandable. I’d just like a piece of the team. It’d be unbelievable. But that’s a couple of years off.