Inside Magic Johnson’s Billion-Dollar Empire | EP #163

0:00I don't know if it folks really understand the depth and length of what you have done there.

0:12The first person ever to franchise Starbucks Burger King, 24 -hour fitness, TGI Friday, Best Buy, Fat Burger, Stakes in Sports teams, but Life Insurance TV networks in real estate. Where did that begin for you? My dream was to make it to the NBA. That was my only dream. You tell me I can't do something, I'm about to prove you wrong. It's been 30 years since you went public with your HIV diagnosis. Your wife was pregnant. Yes, with our son, EJ, I told her I could understand if you want to leave me. She stood up and smacked me right outside my head. True story. And she said, we're going to beat this together.

0:52There's a big debate right now in our political system about, you know, funding public research. We just got too many resources to not help people. This is not about Democrats, independence, or Republicans. This is not about that. It's about life. Now that's the moonshot, ladies and gentlemen. Everybody, welcome to moonshots. During this episode, I'm going to be speaking to an incredible moonshot entrepreneur. His name is Magic Johnson. You know him as the NBA All -Star. You know him as someone who's overcome AIDS. But did you know that he has bought into dozens of companies? He had the largest franchise at Starbucks.

1:38He's been into Best Buy, Burger King, and a multitude of other companies. We're going to talk about his life. We can talk about how he overcame AIDS, what that was like dealing with telling his wife, we'll talk about his career in sports and then his follow on career and buying sports teams. Mostly we'll talk about the incredible lessons he learned. Now this conversation takes place at the Lake Nona Impact Forum at an extraordinary conference in Lake Nona, Florida, it's where Falun Life has its headquarters. And every year the Lake Nona Impact Forum brings together incredible leaders from Jeff Bezos.

2:16And, President George W. Bush and other incredible world leaders. I'll ask my team to put a link to the Lake Noina Impact Forum in the show notes below. All right, let's jump into the episode with Magic Johnson. Thank you. Be there's a pleasure being here with you as well. Pleasure, you know, you give a new meaning to looking up to somebody. LAUGHTER Before we start, I just want to say congratulations to Gloria and Torani for putting on this event for 13 years. Bringing amazing people here every year. Let's give it up for them. Gloria.

2:52Beautiful. It is. It is beautiful. So I want to kick off with you multiple congratulations. What an extraordinary year it's been so far. And we're like just in it. First off, at the beginning of the year, our former President Biden, You gave you the presidential medal of honor here, the highest civilian honor you can get. Let's take a look at this b -roll here of that event. Magic Johnson.

3:28The President of Medal of Freedom is awarded to Urban Magic Johnson. With unmatched vision and versatility, Urban Magic Johnson drove the showtime era for the Los Angeles Lakers, five -time NBA champion, three -time MVP, 12 -time All -Star Olympic Gold Medalist, and a Naseveth Hall of Famer. His honesty about his HIV status shattered stigma and saved lives.

3:57The first retired athlete to build a true business empire, he champions underserved communities. With a legendary will and smile, magic Johnson Rose from the playground in Lansing, Michigan to become one of the most beloved athletes of our time. Oh! Oh! Oh! Oh! Oh!

4:24Oh!

4:28Does that... Amazing. Does that ever get old? Well, listen, it doesn't get old, but something like that is, um, You can't even describe the feeling. The greatest moment I had was when, you know, my mother, who was 89, got a chance to go to the White House and witness her son, her baby, get up there and get the metal of freedom. And so to hear her and see her smile and cry and be happy about this moment, And because the only thing I wanted to do and still the only thing I wanted to do in life is to really make my family, especially my parents feel good about what I've done in life. And so it was a great moment.

5:22My kids were there, of course, cookie. So it was just a great family moment. And I guess God is saying, hey, this is what happens when you understand your purpose. and that you give back to the communities, the underserved communities, and put people to work. And so I never thought I would receive a award for doing the things that's on my heart, but it was a blessed moment for me. That's beautiful. And I want to get into purpose. I want to get into family. But before we get there, another magical event, LA Dodgers, take it for the seventh win. What was that like? Well, it was an incredible moment.

6:11First, we're cookie and I, you know, us being the first African -American owners in Major League Baseball that is first important. And then second, what's important is that the fact that when we took over the Dodgers 12 years ago, So they were not where they are today, right? We built a really successful team that our fans just love. You know, everybody thought at that time when we paid $2 .2 billion for the Dodgers that we overpaid and that we were crazy. And now they see the two world series rings that I have. And we want our division every single season but once. And we're number one in attendance for 12 straight years that we've owned the team.

7:11And I think that we've changed fan experience. and then we included everybody because we have a big Latino fan base. We have African Americans, we have of course whites and they all come together and cheer for this incredible team and so it's a melting pot and I'm just so proud of the fact that our guys are serious about baseball and that we could make the Dodger fans happy and they finally got a parade because when we won during We didn't get a parade. And so, but this year we had a great parade, and everybody was able to celebrate in Los Angeles what we accomplished. Well, as a fellow Angelino, thank you for all that you've done.

7:59Thank you. It is a great pride. Yeah, I'm sure you did. There are so many sides of you. And what you've accomplished and will accomplish, I'm here talking about longevity over these next couple of days. So I want to give you another 65 years of life here. After you left the game, and actually towards the end of your game career, you started pivoting into entrepreneurship, into business. And I don't know if folks really understand the depth and length of what you have done there. And I'm going to dive into these separately. But it's important to realize, this isn't like a one shot success here.

8:40We'll talk about Starbucks, the first person ever to franchise Starbucks. I want to hear that story. Because that, I mean, how you convince Howard Schultz to do that, we'll get there. Burger King. But beyond that, 24 -hour fitness, TGI Friday, Best Buy, Fat Burger. You go from there into, of course, buying, you know, steaks in sports teams, but life insurance, TV networks, and real estate. I mean, that's a conglomerate. I think you should be the magicians and conglomerate of companies here. What drove that desire? Was that innate interest in being an entrepreneur, building businesses? Where did that begin for you?

9:29Well, definitely back home and lasting. When in high school? Yes, because my dream was to make it to the NBA. That was my only and that started how early in terms of when I was a little kid right five six seven eight years old Clan basketball watching games with my father sitting on his lap or sitting beside him watching the NBA And I always wanted to emulate after watching that game I would run out on the basketball court and Emily will chamber them Bill Russell her Bob Coosie whoever was on TV at that time Did you voice that to your parents and your siblings? Everywhere we went, I had my ball.

10:10And my mom, it was dry, her crazy. We in the grocery store, I'm bouncing that ball all around. Did anybody tell you you couldn't do that or did anybody, do they sell you, you're gonna go for it? No, of course my parents didn't, and my brothers and sisters, I have six sisters, three brothers, they never said it. But outside of that, they said I could never make it. But I didn't, I've, I use that as fuel. Of course. I'm a very competitive dude. I've heard that. So you tell me I can't do something. I'm about to prove you wrong, right? And so I was driven by that. And so my parents always encouraged me, but they also said, if you don't get good grades, you can't play.

10:53So I knew I had to apply myself in the books as well. But this is what really changed my life. Please. We were driving my father and I saw these two African -American men and they had this beautiful Marseilles bin. I've never seen a Marseilles. So I'm like, Dad, what kind of car is that? And he said, that's a Marseilles bin. I said, oh, and I said, what? A black man is driving him, right? And he said, yeah, that's Greg Eden. And also his business partner is Joe Ferguson. and they own businesses in Lansing, Michigan. So I didn't know that we could do that, right? And so they owned all these buildings and car dealerships on and on and on.

11:41And I said, uh -oh, I want to meet them. And sure enough, my father set it up for me to say hi to them about 13, 14 years old. And then as I grew in terms of basketball, ball, they start coming to my games and then they said, let's go to lunch. I want to take you to lunch. So they took me to lunch and they explained what they do and I just at that moment my dreams changed from just being, want to make it to the NBA too. I want to be a businessman like those two guys. I think most of you know that the news media is delivering negative news to us all the time because we paid 10 times more attention to negative of news than positive news.

12:26For me, the only news worth while that's true and impacting humanity is the news of science and technology. And that's what I pay attention to. At every week I put out two blogs, one on AI and exponential tech and one on longevity. If this is of interest to you and it's available totally for free, please join me. Subscribe at dmandis .com slash subscribe. That's dmandis .com slash subscribe. All right. Let's go back to the episode. I think most people don't realize that that dream was simultaneous with your sports career. Yes, yes it was, but sports, it was probably 98 % and the dream of business was 2 % because I was still a young man at that time.

13:11Until I turned about 17 and I asked them to give me a job in the summer because when you have six other sisters and three other brothers, your parents can't give you no extra money. That's right. So my dad, my dad took me, he said, you want some money to go to the movies? All right, let me take you to the garage. And he introduced me to Mr. Rape, Mr. Lombard, and Mr. Sop. And he said, if you want some extra money, here's the three things that can help you get that, right? And so that allowed me to understand that I have to have a work ethic not only on the basketball court but outside of it. And that helped me to get ready.

13:56So I met them when I was 17 and asked them to give me a job. They gave me a job. They owned an office building, seven floors. And I had to clean it after five o 'clock on Friday between Friday and Sunday. So Peter, this looked really, again, changed my life. So I cleaned the first six floors, but the CEO's office was on the seventh floor. And I'm a big believer if you don't dream it, you can't become it. So I would bust in the CEO's office like I was pretending I was him. And I would go up to his desk recline to see it all the way back and put my feet up on his desk. I would hit the intercom button like I had a assistant out front, you know, I think of some name like Ruby Can you bring me some coffee and donuts in the day's paper?

14:46And for hours I was sitting there dreaming that I was a businessman and I was the CEO Well look what happened God put me in this position and here I am now over almost 50 years later I am the CEO of my own business and so that changed my life You know, people talk about visualizing success and importance and even in sports as well. Is that always been something that has been a go -to tool for you? Yeah, well for me it's being smart at basketball. I just didn't play the game. I was smart at the game. Sure. There's a lot of guys that are more athletic than me. And Larry Bird, right? We both can't only jump this high.

15:32But nobody was smarter than both of us. There was more people, other people that could run faster than us. But they were not smarter than us. So I've always leaned toward making sure that I was smarter at the game, just like I leaned toward now, being smarter at business. And so that carried me a long way having high basketball IQ and making sure that I was competitive, I was disciplined. I enjoyed the process of winning as well as losing. You had to enjoy the process. And then Larry Burr, I got to give him credit. He made me a better basketball player, man. It's nice to have something in the computer.

16:22Yeah, I hate that belong here, dude, but he... But I got given credit. He really helped me and I think I helped him. And what the people should really know out here is that game Michigan State versus Indiana State is still the number one watch basketball game of all time. That's 40 something years later, right? It's amazing. You figure someone be able to do better job by now. Yeah, yeah. Now Peter, I'm not a sit in the seat do so I like to be down. Is that okay? Yeah, I like to be with the people I don't like to sit. So I'm gonna take the question. All right, because that's my thing. I didn't come all the way to Orlando just to sit in a white chair.

17:07You know what? You know what? So let's go back to that moment when you're approaching Howard Schultz about Starbucks. Now it's one of the iconic companies on the planet. It's nice to have a legal drug you can sell people. And that's probably what it is. I swear, I get more money to Starbucks than I, you know, it's insane. I had good old app. So you walk into his office tell us a story of how you got to get the first franchise and ultimately Oh, and 125 stores, which I bet you wish you still own them. Yeah, well not really Where the stock is today no I'm not a guy that go backwards. I want you to know that about me You know when I do something I sell it.

18:02I'm done and keep moving I'm never going to be going backwards. Only one time I went backwards. And can I tell you that story? I would walk into Alquist. We'll come back to Howard's. So Larry Bird and I were the best two basketball players in college basketball at that time. And so when I won the National Championship against Larry Bird, all of the, I gotta always add that.

18:31The three shoe companies came to recruit me. So at that time it was Adidas Converse and then this new company called Nike. I heard that. So Converse offered me the most money and then Adidas. And then this blonde hair dude, long hair, came in from Oregon and said, hey, I can't offer you what converse can offer you cash wise but I can offer you stock.

19:07I wish I was that Irving, disurven Johnson. When you grow up poor you take the most money. Peter. They just ran analytics about how much money my stock would be worth. Today, a billion five, if I would have took that stock in 1979 all the way to now. And that's something, but again, I don't look backwards. So, I mean, just to put this in perspective, when the numbers I looked up, when you left the game, you had a net worth around 40 million. And today, it's at least according to the various LLMs, it's about 1 .6 billion. You had a 40x increase. Not bad. Not bad. Not bad. I'm going to have a little bit more.

20:10I'm not going to go through that. So, we're playing Seattle. And I always like to know who's sitting on the floor of the game from opponents because in case I want to meet somebody. So they said, oh man, Howard Schoes sits and comes to the Seattle Supersonic Games. And I was like, I asked their PR person, what seat does Howard Schoes sit in? So I can go over and say hi to him and introduce myself. So he told me the number. I ran over there and said hi. I'm Irving Johnson. I would like to next time that we come back to Seattle, I'd like to come and take you to lunch. And he said, well, that'll be great, but you don't have to take me.

20:58I'm going to take you. I said, OK, yeah, you got more money than me. I get it. So came back to Seattle. We got together with him. And we had an amazing lunch. and I said, Howard, I built Magic Johnson theaters and they're doing very well. We surprised everybody in the inner cities of America. Everybody thought no way they could be successful. Well, my first theater came in top 10 highest growths and theaters in the nation. Extraordinary. So it proved everybody wrong that you can invest in the inner cities and make money. Howard, I gave him the information about that. So he said, let's get together the next time you come back.

21:41So I went back up to Seattle. Sure enough we talked about. I told him I think Starbucks would perform very well in the inner cities. Latinos and African Americans, we like coffee too, right? And sure enough, he said, let's take a look at it and see how you operate your movie theaters. He came down on a Friday waiting to Houston's first movie was coming out way next hell and I had 500 black women wrapped around the floor to get in to see this movie and we sold out every theater. And he said, wow, he saw the cash register ringing, making a lot of money. And then he finally got inside and said, wow, you know, this is great.

22:29And I forgot to tell him that we go to the movies a little different than everybody else. And as soon as the movie started, every woman in there started talking to the screen, girl, why you still with him, dumb him, and sure enough, he pulled me out and said, magic, I never had a movie going to experience white lightness. You got to deal. Now, why did I get to deal? Couple of things. He saw what happened at the theater. Also, I drove him around the community. He saw these beautiful homes in urban America well kept and some successful people living in those homes, right? And then I had to go before the board, they signed off, and then the shareholders meeting probably the thing that I was most nervous about was the shareholders they signed off.

23:24And so, sure enough, I built 125 Starbucks in 40 different markets across America and they all were very, very successful. I sold them all back to Howard. And so we created so many job opportunities. And then the last thing, I think that was one of the most important things. I mean, you brought jobs to the markets and care about it. And that's been a consistent part of your life over and over and over again. Breaking job opportunity as well as giving suppliers, women owned and minority owned firms, given them those suppliers contracts to deliver goods to us as creating opportunities. Let's give it up for that.

24:08And the only thing I had to change out was the music.

24:16You know, it wasn't going to work what they were playing in the industry. So I had to bring in Lionel Richie, Irfan and Fire, Michael Jackson. And so we had the tweaked. So you always understand your customer and how you can over -deliver to that customer. So we go on from there to Burger King, to T .J .F. Friday, to Best Boy. What are the characteristics of a company that you would say, okay, I want to own a stake or I want to promote that company? Well, I think those were things that Burger King is the headquarters in Miami, it was a situation where the owner had to get out. And so I can get the pennies on the dollar.

24:58I picked up about 40 of them. I was able to take the bottom line of these burger kings and drive them up and sure enough, I just resold them, made a lot of money reselling them. I would say the fitness was more that minorities needed that because we didn't have no fitness clubs in our community. So it was a good thing to make sure that we had access to fitness clubs. They were making a lot of money as well, but it changed people's lives. But people sighed the whole thing. People's connection to those opened it up as something that was accessible. That's right. And it proved to Fortune 500 companies that they can come in to urban America and make money.

25:46That's also why I did it. And so I sold those back to 24 -hour fitness. And you know, so I'm all about how can I change urban America? How can I create jobs in those same communities that I grew up in? and then show people that people color can be successful businessmen and women. And I was able to do that. And after these as well. Would you say that's your moonshot to really impact the communities around the world up level them? Oh yeah, for sure, for sure. And we've been able to do just that through all the different businesses. And even real estate and Detroit, I mean, you went heavy on trying in the revitalization of Detroit.

26:35Yeah, not in Detroit, of course, but Los Angeles all over the country now. I had a real estate fund. We did 300 million, then we did 600 million, then we raised a billion dollars to again, it's all about real estate. How do we make sure that we either build hotels or build different businesses in those communities? And but they all had to win, because it's not just enough for me to build them, but they have to be successful, because I want other minorities to come behind me. And I was able to do that open up institutional capital to other minorities, because they turned me down five times. Okay.

27:18So when I went up to Seattle to raise money, people turned me down, because they didn't believe in urban America. So I knew I had to be successful. Everybody, Peter here, if you're enjoying this episode, please help me get the message of abundance out to the world. We're truly living during the most extraordinary time ever in human history and I want to get this mindset out to everyone. Please subscribe and follow wherever you get your podcasts and turn on notifications so we can let you know when the next episode is being dropped. All right back to our episode. Let's pivot to the Washington commanders.