Magic Johnson Survived Jordan and Bird. But a Starbucks Boardroom Nearly Broke Him… Until He Pulled Off the Deal No One Saw Coming

When Earvin “Magic” Johnson reflects on his most challenging business moments, he doesn’t immediately think of competing against basketball legends Larry Bird and Michael Jordan. Instead, the 65-year-old entrepreneur points to a boardroom in 1998 where he faced skeptical Starbucks shareholders who would ultimately greenlight a deal that transformed his post-NBA career.

The Art of the Deal

Speaking in May on “The Deal” with Alex Rodriguez and Jason Kelly at the Milken Institute Global Conference, Johnson revealed that convincing Starbucks investors to expand into underserved urban communities represented his most daunting professional challenge.

“The hardest thing I thought I was gonna do was play against Larry Bird and Michael Jordan,” Johnson explained to the live Beverly Hills audience.

Adding, “The hardest thing was to go before the [Starbucks] board and then go into a movie theater packed with good shareholders and try to convince them this is a great move for Starbucks.”

The stakes couldn’t have been higher. Johnson, who had retired from the Lakers following his HIV diagnosis in 1991, was seeking to establish credibility in the business world through Magic Johnson Enterprises. His vision centered on proving that underserved communities represented untapped market opportunities rather than risky investments.

Johnson’s strategy proved ingenious.

Rather than relying solely on presentations and projections, he invited then-Starbucks CEO Howard Schultz to experience one of his Magic Johnson Theatres firsthand. The theaters, which Johnson claimed were among the 10 highest-grossing in the nation, served as his proof of concept for urban market potential.

The gambit worked. Starbucks agreed to form Urban Coffee Opportunities, a rare 50/50 partnership that would become Johnson’s signature business achievement. Over 12 years, the collaboration opened 125 Starbucks locations across 40 markets, including major cities like Los Angeles, New York, Chicago, and Atlanta. Johnson eventually sold his stake in 2010, but the impact extended far beyond financial returns.

“That deal changed everything,” Johnson said to CNBC in 2018, emphasizing how the partnership provided crucial validation for his business acumen.

He continued, “We built 125 stores. We made that deal happen and that’s what really put me on a path of success. It showed everybody that I could drive ROI in urban America.”

The Starbucks success became Johnson’s calling card, demonstrating that former athletes could transition successfully from sports to serious business ventures. This credibility proved essential for subsequent deals, including his current role as part of Josh Harris’s ownership group for the Washington Commanders, which Johnson describes as “the greatest deal I’ve ever done.”

Johnson’s influence on the Commanders extends beyond financial investment. Drawing from his dual perspective as both former player and team owner with the Lakers and Los Angeles Dodgers, he focuses on organizational accountability and franchise identity.

“My job is to hold everybody accountable,” he explained, emphasizing the importance of establishing clear organizational values.

The Starbucks partnership also created a template for Johnson’s approach to urban development and community investment. His success in proving the viability of underserved markets helped reshape how major corporations viewed expansion strategies, contributing to broader economic development in communities that mainstream retailers had overlooked.

Today, with a business portfolio valued at $1.2 billion, Johnson has illustrated how challenging conventional wisdom and demonstrating market potential can create transformative business opportunities that truly change everything.