Magic Johnson Explains Why He Turned Down Nike Stock

Magic Johnson's sneaker deal with Converse cost him $5.2 billion with Nike.

As a second-generation Los Angeles Lakers fan, Magic Johnson is unassailable in my family. As a point guard, head coach, talk show host, and businessman, Johnson can do no wrong in my eyes. 

However, the Hall of Famer did make one financially costly error before ever stepping foot on an NBA court. In 1979, Johnson turned down a sneaker deal from Nike that included stock in the company, which is now valued at $5.2 billion.

In a recent interview on the All The Smoke podcast, former NBA players and cohosts Matt Barnes and Stephen Jackson asked Johnson about his ill-fated decision to sign with Converse instead of Nike.

Magic missed on a once-in-a-lifetime opportunity with Nike. 😳

Luckily for him, everything turned out alright.

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Johnson explained with a laugh, "So, here I am, just winning the National Championship against Larry Bird, and three companies came in; Converse, adidas, and Nike. Nike was just a year or two old. Converse offered me the most money."

Johnson continued, "So you know when you grow up broke, take the money. Phil Knight came in and said, 'Hey, I can't offer you the same type of money. But I can offer you stock'."

Johnson then playfully put his hands on his head in frustration before concluding, "My family didn't come from money. That hurt us sometimes when you don't come from money. I didn't even know what stocks was at that time. So, I passed on the stocks. Can you imagine? Forty-five years and $5 billion of stock."

As Barnes and Jackson pointed out, Johnson ended up doing well for himself. Johnson wore the Converse Weapon sneakers during his playing days and starred beside Bird in national ad campaigns. Since retiring from the NBA, Johnson has become a billionaire and philanthropist. We'll chalk this decision up as an extremely rare loss for the Lakers legend.

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