POST-GAME SHOW
By Sylvester Monroe/Los Angeles
In the N.B.A., Earvin ("Magic") Johnson's skill with a basketball was matched only by his leadership. Johnson fronted the Los Angeles Lakers' "Showtime" offense, directing the team to the N.B.A. finals nine times in 13 seasons, winning five championships. He was the league MVP three times. After learning he was HIV positive, Johnson became a forceful advocate for AIDS education and raised millions for research. The man gets things done.
As a businessman, Johnson is showing the same kind of all-star potential. The opening of the 12-screen Magic Theatre movie complex next to the flagging Greenbriar Mall in predominantly black southwest Atlanta is the latest deal to establish the former hoop sorcerer as a force in inner-city economic development. Magic movie marquees are going up in Houston and Cleveland, Ohio, and Johnson has announced plans for 14 new multiplexes in 10 other cities over the next two years.
His company, Johnson Development, also owns and develops shopping centers in "underserved" areas (meaning, no conventional company wants to invest there) of Las Vegas and Los Angeles. Magic is elevating his game too. Backed by a $150 million commitment from the California Public Employees' Retirement System, the nation's largest pension fund, Johnson plans to extend his real estate empire to poor communities in the rest of California and elsewhere.
Like any other star athlete, Johnson has done a ton of endorsements; now his own money is on the line. He and Sony are partners in the $8 million-plus theater investment, including the Magic Theatre at the Baldwin Hills Crenshaw Plaza in South Central Los Angeles, a top-grossing movie house. "Everybody in Hollywood said it wouldn't work," Johnson says of the L.A. deal. "They laughed at us, and they laughed at Sony. Now they want to know how they can help." The theater's success has given an assist to other businesses there. Like Greenbriar, the mall had been struggling, with occupancy languishing between 65% and 70%. Since the theater opened in 1995, occupancy has recovered to 98%, and tenants report 30% to 70% increases in sales over the past 18 months. Before the Atlanta theater opened, Johnson was getting calls from businesses such as TGIFridays and Starbucks seeking sites near the theater. "I've got guys calling me left and right wanting to invest," he says, laughing.
He's also basking in a warm glow of goodwill for having created employment. Along with 850 construction spots, the theaters have created roughly 100 permanent jobs in each city. "This isn't a program," says Lawrence Ruisi, president of Sony Retail Entertainment, the New York City-based parent of Sony Theaters, which had long been interested in trying to develop movie theaters in minority areas but lacked the entree. "It's a real business that makes economic sense." But Sony couldn't pull off any deals until Johnson and his business partner, venture capitalist Ken Lombard, now president of Johnson Development, approached with one in 1993. Says Ruisi: "We have the expertise in building and operating theaters. What we didn't really have was a great way to get to those markets. When we spoke to Ken and Earvin, it was the perfect balance."
For a retired jock and a guy who left Michigan State after his sophomore year, Johnson brings a sophisticated business mind to the game. "The Magic Theatres work because we do our homework," says Johnson, who was always interested in business while he was playing ball. "I don't know everything, but I get caught up on what I don't know." He's got some fancy tutoring too. Among those who help him brush up on balance-sheet analysis is former Walt Disney Co. president Michael Ovitz, a close friend. Adds Lombard: "Earvin is a tremendous businessman. He has the same level of vision that he had on the court and the same control in knowing when to pull the trigger and when not to."
This heads-up approach got its impetus early in his hoop career when he witnessed the fleecing of fellow Laker Kareem Abdul-Jabbar, who lost millions to unscrupulous financial advisers in the 1980s. Johnson dumped his own advisers and started demanding monthly statements from his new ones. He realized that Magic Johnson was a brand name as well as his own, and that he wasn't benefiting from it. So he became the first active N.B.A. player to be a league licensee. "I just kept seeing all these people wearing my T shirts, and I was not getting a dime from it," he says. From that came "Magic's 32," a store selling his T shirts and other merchandise. He later bought a Pepsi Cola distributorship with Black Enterprise publisher Earl Graves. He has since sold Graves his interest. Johnson's basketball and business skills --he owns a piece of the Lakers--have made him worth more than $100 million.
Johnson isn't all business. For fun (O.K., and for profit) he leads a traveling basketball show called the Magic Johnson All-Stars around the world like a rock tour, playing exhibition games against foreign basketball teams. And since he lives in L.A., it was only natural for him to get into entertainment. He has signed a production deal with Fox Family Films, and is wrapping up another to act as host on a syndicated talk show for Twentieth Television. Johnson will be co-executive producer of the talk show with his longtime agent, Lon Rosen. Once again it will be showtime for Magic--and once again he'll be running the show.