"When you grow up broke, you take the money" - Magic Johnson expresses remorse over declining $5.2 billion worth Nike stock
Magic Johnson once made a decision that wound up costing him billions in Nike stock. At the time, Converse was the dominant sneaker brand for basketball players, while Nike was primarily a track and field company. It wasn't until the signing of Michael Jordan, who was a rookie in 1984-85, that Nike started to step out of Converse's shadow.
Given the landscape of the shoe market at the time, Johnson, the No. 1 pick in the 1979 draft, passed on an offer from Nike. While he's certainly done well for himself since then thanks to his smart financial maneuvering, it's hard not to wonder what if in regards to Johnson joining Nike.
On "All The Smoke," Matt Barnes and Stephen Jackson spoke about the decision from 1995 that still haunts Magic Johnson to this day. Barnes said the Nike deal would have landed Johnson $5.2 billion in company stock.
Johnson then discussed his reasoning:
"So, here I am, just winning the national championship (with Michigan State) against Larry Bird, and three companies came in – Converse, Adidas and Nike. Nike was just a year or two old (the Bruin and Blazer were the company's first basketball products in 1972). Converse offered me the most money. So. you know, when you grow up broke, you take the money.
"(Nike founder) Phil Knight came in and said, 'Hey, I can't offer you the same type of money, but I can offer you stock.' I didn't know nothing about it, and my family didn't come from money. See, that's one thing that hurt us sometimes. When you don't come from money, you don't know what – I didn't even know what stocks was."
Magic missed on a once-in-a-lifetime opportunity with Nike. 😳
Luckily for him, everything turned out alright.
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As Barnes and Jackson pointed out, Johnson has done well for himself despite passing on the stock options.
Looking at the details of Magic Johnson's potential deal with Nike
Although Magic Johnson passed on the deal with Nike, looking back, it's hard to comprehend just how much money he passed up on.
According to CassiusLife, Johnson was offered $1 for every pair of Nike shoes sold, and 100,000 shares of Nike stock. At the time, Nike stock was worth $0.18 cents a share, meaning Johnson would have had about $18,000 in stock.
While that certainly was a lot of money at the time, it doesn't compare to the $12-plus million the 100,000 shares would be worth today. In addition, with $1 royalty for every shoe sold, Johnson would have been raking in the money hand over fist.
While promoting his 'They Call Me Magic' series last year, the Hall of Famer joked about the situation, saying the success of Air Jordans would have made him rich.
"It kills me every single time I think about that," Johnson said. "Man, Michael Jordan would have been making me so much money,”
Of course, Johnson is estimated as being worth $620 million right now, largely in part due to his Magic Johnson Enterprises. Since 1995, Johnson has continued to invest his money in numerous endeavors, including restaurants and entertainment venues.