Magic Johnson has made billions since retiring from the NBA, but one deal with Starbucks “changed everything” for the business visionary.
Johnson appeared on Bloomberg’s The Deal with Alex Rodriguez and Jason Kelly to talk about his rise in the business world.
“My movie theaters was crushing it in the inner cities. It showed people you can make money doing business in the inner cities of America,” Johnson said in the interview.
Even with those qualifications, Johnson said he had a mighty task of getting then-Starbucks CEO Howard Schultz to invest in his idea of putting more of the coffee chain’s locations in underserved communities.
“The hardest thing I thought I was gonna do was play against Larry Bird and Michael Jordan. The hardest thing was to go before the [Starbucks] board and then go into a movie theater packed with good shareholders and try to convince them this is a great move for Starbucks,” explained Johnson.
Luckily for Johnson, his persuasion skills matched his basketball abilities. The entrepreneur secured the deal to own a stake in 125 Starbucks locations. However, the move not only elevated his net worth but also proved the viability of investing in urban areas.
“That deal changed everything,” said Johnson in 2018, according to CNBC. “We built 125 stores. We made that deal happen, and that’s what really put me on a path of success.…It showed everybody that I could drive ROI in urban America.”
He added, “…My company was able to provide jobs and access to these retailers who were not coming in before, but now they hit a home run when we partnered, and they came into the inner city.”
Although Johnson sold the theaters and his stake in Starbucks a few years later, its success helped establish the 65-year-old as a powerhouse in business. It also encouraged companies to consider diverse, underrepresented areas for growth opportunities.
“I became the first person to ever own Starbucks outside of Starbucks,” Johnson said. “We built 125 in 40 different markets across America. They all did extremely well. And that really gave me, first of all, the stamp of approval. It gave me the track record that I needed of success so I can move on to something else.”
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