Monday, October 20, 2008

Magic Johnson Is Still A Superstar

Former NBA great Magic Johnson was the keynote speaker at the opening of the AFP conference. Although I am a big NBA basketball fan, I was only lukewarm interested in attending his speech. With crisis brewing all around, the last thing I needed was to hear Magic describe how his no look passes always hit their man. Was I in for a surprise. Magic has got to be one of the most interesting business success stories going and the kind of role model urban youth need.

I always knew that Magic had launched a few move theatres after he retired from the NBA, but I never realized he is a mogul.

He owns 119 Starbucks, a bunch of 24 Hour Fitness operations, he supplies beef to half the Burger Kings in the United States and he raised a billion dollars just before the markets turned down, so he has a billion dollars cash on the sideline waiting for further declines in real estate, before he plunges in.

The billion dollar money raise was probably the most fascinating story Magic told. He actually had commitments for two billion, but felt he only had enough interesting projects for a billion dollars, so he turned the other billion down. "It's not often that a black man gets to turn down a billion dollars," said Magic.

Key to the billion dollar money raise story was the journey leading up to it. Although he was successful with his Magic Johnson Movie Theatres, he couldn't get funding for his real estate project. Magic said he was turned down by all 10 banks he approached. "They sure did want my autograph and to take pictures with me, but they weren't giving out any money," said Magic.

Finally, he found one finance source that after four meetings financed him to the tune of $50 million. He successfully managed that money and was then able to raise $200 million. His return on that money was over 30% annualized, which then got him $800 million that he returned over 20% annualized, which then led to the billion dollar raise.

Magic claims that his secret is to over deliver. He certainly did it as far as his speech was concerned. Watching him on stage was like watching him in his LA Laker days. He has a command of the stage, equal to that of his command of the basketball court.

Towards to the end I was thinking, you know he isn't telling just a series of jokes like Bill Cosby, he isn't doing any singing like Sammy Davis Jr. once did, but somehow he has elevated his speech to the degree that he has the audience at peak interest. By the time he walked off the stage, he had an audience of cheering fans. This is one special guy.

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