In 1979, 20-year-old Earvin Johnson from Lansing, Michigan had a very important decision to make as Converse, Adidas, and Puma eagerly pursued the young prospectโs signature for a shoe deal. In present day, Magic Johnson wishes he gave a second look to the dark horse in the equation: Nike.
It was his rookie year on basketballโs marquee team, the Los Angeles Lakers, alongside the best player in the world at the time, Kareem Abdul-Jabbar, and โ between the flashy playing style and his big smile โ every brand seemingly wanted some of the Magic.
If you have read the exceptional biography Shoe Dog by Nike co-founder Phil Knight, youโd be familiar with its humble beginnings as a fringe competitor in the basketball shoe market shortly before it would change the face of sports. If episode 6 of HBOโs Winning Time is anything to go by, the ambitious Knight eagerly pitched a signature shoe to Magic in exchange for stock in the company.
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The first Nike IPO sold their shares for around 18 cents each. If you bought just one share in 1980, it would have turned into 128 shares and that one share would be worth nearly US$12,000 (AU$16,200) in the present day. It is estimated that the Magic Johnson Nike deal would have amounted to around US$5.2 billion (AU$7 billion).
Hindsight is 20/20. Magic Johnson proceeded to accept the far safer option of US$100,000 (AU$134,700) from Converse, which was the dominant shoe in the market and was already linked to Magicโs basketball idol Julius Irving (โDr Jโ). This, for the early 1980s, was a lot of money to be made here.
While the signature shoe part of the deal is likely a bit of embellishment from HBO, the rest of this exchange is almost entirely true. As Magic himself explained:
โWhen I first came out of college, all the shoe companies came after me โ and this guy, Phil Knight, who had just started Nike. All the other companies offered me money, but they couldnโt offer me money because they just started.
โSo he said, โStock. Iโm going to give you a lot of stock.โ I didnโt know anything about stock. Iโm from the inner city. We donโt know about stocks.
โBoy, did I make a mistakeโฆ Iโm still kicking myself. Every time Iโm in a Nike Store, I get mad. I could have been making money off of everybody buying Nikes right now.โ
If we ever get to a season 9 of Winning Time, we will see that Magicโs divorce from Converse was a pretty messy one. Around a decade into their partnership, Magic explained to the Baltimore Sun that he planned to leave Converse after participating in the Olympics.
โConverse as a company is stuck in the 60s and 70s. They think the Chuck Taylor [sneaker] days are still here,โ Johnson said after U.S. Olympics Basketball team practice.
โIโve never really been happy with them. Nike and Reebok pour money into advertising; Iโve been trying to get out for years.โ
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โItโs been 12 unhappy years,โ he continued.
โIโm calling them all the time, telling them how bad the company is.โ
Nike probably doesnโt have any hard feelings about a missed opportunity with Magic Johnson, as they ended up signing some hotshot new college basketball player named Michael that would be wearing Nikeโs shoes in the NCAA finals and in the NBA just four years later. We all know how that turned out for them.
To add insult to injury: Nike would eventually acquire Converse for around US$309 million (AU$416 million) in 2003.
Itโs hard to feel too sorry for Magic, though. He still went on to start Magic Johnson Enterprises which has seen him invest in everything from fast food locations, to professional sports to real estate. MJE has holdings of around US$1 billion (AU$1.3 billion); Johnson himself is worth around US$600 million (AU$807 million) and is considered to be one of the wealthiest athletes in the world.
Still, though. Damn.
