Introduction
It might resemble that there is nothing in common between sports and business. Reasonably, it is a joint statement because to build a prosperous business career; it is not required to have excellent physical development. On the other hand, a successful athlete does not need to have a mathematical mind and develop logical and expressive skills. However, these are different strains that complement one another and help achieve progress. Sports not only increase the productivity of work but also motivates further achievements.
It is a well-known fact that people who accomplish high results rise as many times as they fall. One of the best examples that demonstrates the direct relationship between competition and business is Earvin Magic Johnson. This research work aims to study his experience as one of the most striking examples of how sport helps one achieve their goals and realize their dreams. His current entrepreneurial activity and his former glittering basketball career inspire many people around the world. Even the most critical failure is not a reason to stop halfway but rather an incentive to analyze and strategize, and Johnson’s life experience confirms this assumption.
Review of Literature
Overview of the Sport Entrepreneur
Earvin Johnson was a truly versatile former basketball player, managing to excel athletically and entrepreneurially. At over two meters tall, he was almost the only one in the world with an excellent ball-handling technique, which made the leading guards suspicious. He could effectively act as a striker, struggling under both boards for rebounds, and finished his attacks with accurate shots from all positions. Magic Johnson led his team to nine NBA Finals appearances and five NBA championships in his twelve years with the Los Angeles Lakers’ (McKenzie-Murray, 2017). He was named the best regular-season player three times and the most prominent Finals basketball member during that time. However, he had to stop his career because being tested positive for HIV.
The illness was the beginning of a new phase of his life: entrepreneurship. Today, Johnson has more than $500,000,000 in the capital, owns parts of the ‘Lakers’ and ‘Los Angeles Dodgers,’ and is the CEO of ‘Magic Johnson Enterprises’ (McKenzie-Murray, 2017). The competitiveness that has made him an NBA star contributes to his success in the business world. However, his position goes far beyond the process of making money. He wants to impact not only in well-known markets but also in the cities where the minority community is prevalent. Johnson’s ventures have demonstrated how lucrative it can be to attract movie theaters, cafes, and other services to underserved cities. Moreover, his essential contribution was the creation of a foundation that provides free HIV/AIDS testing.
Superstar status contributed to Johnson’s pivot from basketball to business, but once he became an entrepreneur, his actual accomplishments, not his title, began to be valued. The time spent on the basketball court gave him helpful lessons about focus, strategy, and discipline. He also wasted a lot of time communicating with top business experts and suffered a few setbacks and difficulties (Walker & Garett, 2016). However, that did not hold him from giving up halfway to a prosperous entrepreneurial career, and he is already one of the most thriving businessmen.
Upbringing and History of Sport Entrepreneurs
Earvin was born in an impoverished family in Lansing, Michigan. In his childhood, he played on the basketball court for weeks, and it soon became clear to the Johnson family who the youngest son was growing up to be. One day, when he was 12 years old, he went to the court and bet a staggering $200 at the time, suggesting that he could beat the sixteen-year-old master of the street (Walker & Garett, 2016). At that moment, no one believed in him; however, the future top point guard kept quiet and only repeated his father’s words about basketball strategy. He won on a dry spell, and that was the beginning of Johnson’s overwhelming basketball campaign.
In another game for the school, he did something phenomenal, scoring 36 points, grabbing 18 rebounds, and handing out 16 assists. It impressed a sports journalist, who immediately gave Earvin the nickname ‘Magic’ (Moussavi, 2017). After graduating from high school, Johnson enrolled at Michigan College. As soon as he came to the first practice, he immediately became the team’s leader. The Los Angeles ‘Lakers’ club later selected Earvin as a team member. Twelve times he was chosen to the ‘All-Star’ team, and the constant duels with Larry Bird did not cease and gave the fans a great show. In four seasons, Johnson was able to take the NBA’s ‘Most Valuable Player’ title three times, despite rising star Michael Jordan. However, he had to cut his magnificent career short because of HIV. Nevertheless, his popularity among his supporters did not decrease. Later, he was elected to the ‘All-Star Game’ again, and it seemed to be the player’s final farewell to the great game.
Earvin made a sensational return to the ‘Lakers’ in 1996; under him, the team won twenty-nine games out of forty and made the playoffs from fourth place. Despite the rapid and successful comeback, there were not only victories but also failures. After one of the losing games, Magic announced their final retirement from the sport (Moussavi, 2017). However, this was not the end of a successful career for Johnson, and he began a new path in the business world.
Challenges Faced by the Entrepreneur
After a medical examination before the 1991-92 NBA season, Johnson reported that he had a positive HIV test. On November 7, 1991, a sportsman publicly announced that he would retire immediately at a news conference. Thus, the first challenge for the star was to end his sports career and search for new projects. The athlete was later offered to coach the ‘Lakers,’ initially club playing excellently, winning five of his first six games under Johnson but later losing the next five games. Johnson announced that he would step down as a trainer at the end of the season. Although he was still returning to the coaching profession, it was a failure. Subsequently, the athlete decided to create business and investment in cinemas, and people began to criticize him and assume that such an expense was not reasonable (Wolny, 2017). Therefore, the third challenge for the businessman was the condemnation of his decisions by others. In fact, cinemas began to Johnson profit quickly. Then he heard statements that he did not know to commence a business and earned it only because of his popularity as a basketball player.
Apart from criticism and disapproval from others, Johnson financed the business at his own expense because he could not interest investors. Additionally, the challenge for him was that banks did not provide loans for five years of running successful enterprises, such as cinemas and Starbucks. Only in the sixth year was Johnson ready to attract investment for company development (Castleman et al., 2016). Thus, despite the fact that the star is one of the most successful businessmen, he faced many difficulties at the beginning of his enterprise career.
Failures of the Entrepreneur
Despite the success of the athlete’s business and investment, his company has had some difficulties. Johnson’s first attempt at a business was a high-quality sporting goods store named ‘Magic 32’, which failed just a year later and cost him $ 200,000. This experience taught him to pay attention to customers and learn what products they needed. Nevertheless, in 1997, Magic Johnson Entertainment, Johnson’s production company, signed a contract with Fox (Fortune. n.d.). In 1998, Johnson held a late-night talk show described as ‘Magic Hour,’ but the program was rejected two months later due to low ratings.
Johnson was invited to coach the ‘Lakers’ in 1994 and employed for two years as club president. Before the 2018 season, he promised to leave his post if the team did not present a decent result under his leadership. As a result, the ‘Lakers’ had a poor record of 35-47, so the athlete retained his promise and resigned from his job. Although there have been discussions that Johnson left too early and should not take previous defeats as a failure of his policy. The training he did in the team pointed to the fact that the ‘Lakers’ gained 22 victories and only three falls. It is worth mentioning that a stable and prosperous business that has worked effectively for many years also suffers. The number of visitors to its ‘Starbucks stores is declining as many consumers perceive ‘Starbucks’ as a luxury. Clients can afford to buy coffee only once a week (Rothaermel, 2017). Thus, sales decreased by 9 percent, but Johnson had previously faced difficulties, which did not prevent him. Therefore, the athlete believes that ‘Starbucks’ will quickly regain its market position.
Successes of the Entrepreneur
The Los Angeles, ‘Lakers’ former player founded ‘Magic Johnson Enterprises’ in 1987, later becoming a significant investment and asset management organization. Most former athletes went bankrupt on mistaken investments funded in venture capital, dubious or outright fraudulent projects. Magic has taken a different, and perhaps the surest, path. His investments are either franchises, partnerships with large, market-leading companies, or investments in sports clubs (Cross & Fouke, 2019). This reasonable strategy has led him to his current business success.
Earvin targeted a narrow audience to latch on to opportunities that others were missing. Johnson estimated that minorities also spend a lot of money every year, although they do not have the services they require. For any leisure activities: movies, restaurants, matches — they had to go to another part of town (Cross & Fouke, 2019). That was the reason why Magic started outfitting movie theaters in troubled neighborhoods. It seemed to others that people in those places were not willing to spend money on entertainment. However, the first cinema beat all revenue projections and became one of the city’s most profitable.
Nowadays, Johnson owns a chain of theaters, fast-food restaurants, one of the largest catering companies in the world, a movie studio, and a major advertising company. He also invested in Marvel Experience, a mobile theme park dedicated to the superheroes of the Marvel universe. Magic became a co-owner of another women’s NBA team, the Los Angeles Sparks’, and led the baseball team for a record $2.15 billion at the time (Cross & Fouke, 2019). Earvin invested in ‘Starbucks’ and ‘TGI Fridays’ restaurants, fitness centers, sportswear lines (he was the first in the NBA to promote his brand), and TV channels. Additionally, because of his background in basketball, he coached and owned the ‘Lakers,’ bought and sold other sports clubs, worked as a commentator, and hosted TV shows.
Future Endeavors of the Entrepreneur
Johnson’s future plans relate to his sporting past and business industry. The athlete stated that he still wants to be a team ambassador and provide free consulting services. Considering that only he can convince professionals like Kawhi Leonard to play for Los Angeles. In addition to working with the team, Johnson continues his HIV philanthropic activity and still runs Magic Johnson Enterprises. He recently invested in ‘aXiomatic eSports,’ which owns the successful Team Liquid. An important initiative for Magic Johnson in cooperation with MBE Capital Partners. It offers $ 100 million in loans to companies owned by minorities and women (Magic Johnson’s essential advice for startups and thriving post-pandemic, 2021). The reserves will be shared through the Small Business Administration Salary Protection Program. This will help keep the business afloat during a pandemic.
Johnson recently began working with the detergent giant Ecolab and his program, ‘#TakeBackYourSocialLife,’ a campaign to support the return of businesses in the food and hospitality industries. Organizations that adopt and adhere to high standards and practices are audited and then rewarded. In the year since the program’s launch, more than 22,000 Ecolab Science-certified seals have been presented to businesses in North America, including some personally from Magic Johnson. Thus, it encourages business owners to adhere to the criteria of cleanliness and integrity. Nevertheless, the world leader in licensed sporting goods, ‘ Fanatics’, recently announced the appointment of Erwin Magic Johnson to his board (Magic Johnson Enterprises, n.d.). One of the most professional basketball players in history, he has created a successful entrepreneurial portfolio in sports, business, and technology. Johnson joins Mindy Grossman, CEO of WW International, and Jerry Storch, founder, and CEO of Storch Advisors. Thus, the future prospects for the development of the athlete’s business are multidisciplinary and exciting.
Conclusion
Thus, Johnson’s athletic career was highly successful until he accepted that he had HIV. After that, the superstar left the team but returned as a coach and owner of the club. It is essential that his business not only includes the club but also sports shops that sell premium quality goods. However, the first ventures in the market of Magic were not successful; he was not provided with credit, so he financed projects from his savings. Moreover, the first store was not profitable, which caused high losses. Despite this, the difficulties hardened the athlete; he learned from his mistakes and was able to build a prosperous corporation. As a result, its cinemas, restaurants, and cafes are now resounding popular among ordinary people. Thus, it can be argued that Johnson, as a businessman, is no less successful than an athlete
References
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