Magic Johnson Talks About Books, Business, Barack and Basketball

FanHouse was recently fortunate enough to get some one-on-one time with NBA legend Magic Johnson. Magic was promoting his new book, "32 Ways to Be a Champion in Business", so when he came through New York, I got the chance to sit down with him in a back room at the NBA Store in midtown Manhattan.

But before jumping into the interview, I should set the stage by saying that the bulk of our conversation was about Magic Johnson the businessman, not Magic Johnson the sports legend. And trust me when I say that that's a good thing. Everyone already knows Magic as an athlete and a sports announcer. There's just not much new information to glean there. But boardroom Magic is another matter entirely. I was surprised at how outspoken and passionate Magic was when talking about things like the state of our faltering economy, and what his thoughts are on government bailouts for struggling corporations. In short, it's easy to see why Magic has been able to drum up nearly a billion dollars in investments for his various enterprises.

Oh, and another highlight to the interview was Magic talking about his support for Barack Obama and whether he's been in talks with the president-elect about a position on his staff. That's probably worth checking out too. Enjoy.

Randy Kim: What was more difficult for you, finding success in the business world or finding success as an athlete?
Magic Johnson: Definitely in the business world, finding success there, because in sports, the ball's in your hand and you're going to make something happen. You can control the tempo and the flow of a game. In business, you can do everything right and you still may not get the deal. It was hard to sell retailers and people on the fact that I wanted to invest in urban America. It took me a long time to convince different retailers to come in, so that's why it was hard. And still today, we have a lot going in, but not as many people as we should have investing in urban America. But they're finding out that they have to now in order to grow their bottom line and to grow their business.

RK: So it's obviously something you take a lot of pride in? Winning that battle and succeeding in business?
MJ: Oh yeah, I take great pride in it. I love what I do. Growing communities, like we've been able to do, has just been awesome, and putting over 40,000 people to work has been awesome. To bring Harlem back has been awesome. Look at South Central Los Angeles, look at 91 cities we've invested in, 22 states, that's bringing great pride to those communities. Prince George's County in Maryland; there was no investment going on there even though it was the No. 1 richest African-American community in the nation at that time. If you think about that, that doesn't make any sense. They have the disposable income, so somebody should have invested in this community. That's what it's all about. We built the No. 1 brand in urban America because of that pride, and the consumer and the customer base of those different cities have rewarded us with their loyalty and their trust.

RK: It's interesting for me to hear about the past for you, where you had your setbacks as a businessman. You had plenty of failures, so how did it feel when you broke through and you finally had success? Was that comparable to winning a title?
MJ: Oh yeah, it was even better than winning a title. I've won titles my whole life, so you understood very easily what that was about. But to win a business title, that was hard. Like you said, I had setbacks, but at the same time, I kept moving forward. I'm very competitive and I wanted to win, I wanted to be the best businessman that I could be. So finally, the theaters became successful, the Starbucks became successful, on and on, and the Urban Fund, which nobody thought I could do, but we proved them wrong with the first $300 million, and the second $600 million, and now, knock on wood, we'll have a billion dollars to build real estate and retail, both together. Nobody thought I'd be able to go out and raise a billion dollars. And then we have $500 million for our equity fund, so we're actually doing a great job, but the first time I really knew that we had arrived was after we got to 100 Starbucks. And then the second thing in big business is when we bought the TransAmerica building in downtown Los Angeles. Then everybody said, "Wow, this guy's for real." That's still the most recognized and well-known building in downtown Los Angeles. And Magic Johnson was a part of owning it. And they were like, "Oh, OK. This guy's legit."

'House Words Magic Johnson: "I could never imagine in my wildest dreams that America would be ready to vote for an African-American as president."

RK: Yeah, I think the outsider's impression of your business success is that someone in your position had a lot of money to start with, so what's the big deal if his investments paid off? They probably don't know how much of a grind business has been for you. It's interesting that the nature of what you did as a player was running Showtime and making the game look easy. But your business experience is something that tapped into a different part of your personality: Get in there, grind it out, and keep going ...
MJ: ... Take your lumps and keep going. And stay disciplined. The main thing, even today, is I stay disciplined. I don't deviate outside of what I do. I'm still urban, urban, urban. A lot of times, bigger corporations hurt their own brand and their company by trying to be everything to everybody. And it doesn't always work.

RK: In the book, you touch upon a number of topics, from financing a start-up to protecting your brand. I was wondering which, personally, you found to be the most important? If you had to tell someone, "You know what? This is the one lesson that I've learned that applies most in business," which of those lessons most stands out to you?
MJ: Well, always make your business about the customer. I think that's the one that's really very critical. Also, too, when you're trying to acquire financing, you're going to get knocked down a lot, and people are going to say no a lot, but keep going. If you believe in your strategy, if you believe in your business plan, if you feel that you've done all your research and homework and you can really believe you can bring someone back a healthy return on their investment, I say keep going. But right now we're in a tough economic status in America, so financial institutions are going to be difficult places to raise money. So now it's probably going to have to be wealthy individuals (that give out financial backing) until we get back going strong, which should be in the next 18 months or so.

RK: Well, that's what I was going to touch upon next. How can America go back to being a champion in business and get its economy back on track?
MJ: Small business owners. We've got to invest in small business owners. We've got to invest and make sure that there are more and more entrepreneurs who will hire 100 people, or 50 people. Because again, that's what makes America go. Then, use some of the 700 billion dollars that they're giving to banks -- or whoever else they're giving this money to -- to invest in either corporations or small business owners who are going to use it to hire a lot of people, as well as make sure they're going to give the government a healthy return on its money. But if they make a mistake and only give the bailout funds to banks and the automotive industry, you're not creating new jobs that way. We've got to create new jobs. That's fine, you can invest in big corporations, but we've also got to save some of that money and invest in small businesses. I've already shown them the blueprint on how to do that in urban America; somebody else has to do the suburban side, because that's not what I do. Hopefully, that's what will happen.

RK: Your father was a GM assembly worker?
MJ: My brothers too.

RK: So where do you stand on bailouts for the automotive industry?
MJ: Well, I hope it can happen, but only if we have a great plan, like only if hybrids are a part of it, and only if small, incredible cars are a part of it. The big three automotive makers have to change their model and the way they do business. If they don't come up with a new way of doing business, then I think we should wait until they come up with the right strategy, because I want it to happen, but also too, I want the strategy to change. It has to start at the top. But then people in Michigan and Ohio and Tennessee and some of these states ... if those big three go bankrupt, it's going to wipe whole states out, and you can't recover from that.

RK: And that's something that new president Barack Obama faces. Moving on to politics, I know it was a big moment for you when he was elected. How would you compare it to the feelings you would get as a basketball player?
MJ: Not even close. (Laughs) When Obama won ... there will never be feelings like that again. It was so much more meaningful than winning a championship, because I think that, you know, this is history. This is something I never thought I'd see in my lifetime, and definitely in my parents' lifetimes, who lived in the south with racism and the whole thing, so to see them cry ... the day was so proud and so happy. Then for me, as an African-American businessman, just knowing the ups and downs that I had to go through just to get to where I am, I can just imagine what Obama had to go through. I could never imagine in my wildest dreams that America would be ready to vote for an African-American as president, and I was happy about America that they rose to the occasion and chose the best candidate, who happened to be African-American. It says a lot about, not just the country, but the world. The world celebrated. This is bigger than basketball, it's bigger than sports. We may not ever see this again, but you're always going to see championships and all that, but nothing like this.

RK: Are you going to Washington for Obama's inauguration?
MJ: Oh yeah, I went to Washington both times for President Clinton and I'll definitely go again this year.

RK: I saw the interview you did with Larry King the day after Obama won, and, well, there's been the notion that you potentially could have a position with Obama's staff ...
MJ: (Laughs) I knew this was coming! Thanks a lot! (Laughs)

RK: The entire interview has been leading up to this one moment! So I have to ask: Have there been any talks with Obama's people about a position with his staff?
MJ: (Laughs) No, no talks. I think that I could better serve president elect Obama from the private sector. Just from the business side. He's going to have an urban policy and an urban agenda, and whomever he appoints, I can help, because he's going to need help. Again, I have the blueprint, I know what to do and how to do it, and how to make it happen, so I think that's better for me. And I would never want to be really involved in politics in that way, whether it's running for mayor or governor, even though in Los Angeles they're trying to get me to run some time, but I'm not going to do that. I'm happy where I am. I'd rather work with the mayors, governors and presidents and not be in a cabinet position. And I'd also like to work with Obama's HIV and AIDS commission, whoever ends up taking that job, I'd like to work with them as well. So on two fronts: urban America and HIV and AIDS.

RK: Well, Charles Barkley says he's going to run for governor in Alabama in 2014. Will you support him?
MJ: I would support him 150 percent. I would raise money for him, I would go in the state and go around and campaign for him. I went to Sacramento and was one of the first ones to campaign for (former NBA player) Kevin Johnson for mayor, and so I would definitely do that for Charles. Charles is very smart. I think that he's outspoken, but they shouldn't hold that against him because he tells the truth a lot of the time, although sometimes people don't like hearing the truth. (Laughs) But I think that if he ran he'd do a sensational job.

'House Words Magic Johnson: "The big three automotive makers have to change their model and the way they do business. If they don't come up with a new way of doing business, then I think we should wait until they come up with the right strategy."

RK: Maybe a few basketball questions now. This is random, but it's come up in a lot of the coverage that we've done: If you were starting a team, would you start with Chris Paul or LeBron James?
MJ: Um, wow. I think I'd probably start with LeBron in the sense that he's much like myself. Even though I think it's very very close. I love Chris. But LeBron, because of his size, you know, the whole freak of nature thing. I'd definitely have to go with LeBron.

RK: How do the Lakers go on to become champions of the NBA this season?
MJ: Defense. It starts on the defensive end and playing more physical basketball. Boston just out-physical-ed the Lakers, and the (Lakers') defense was really poor, and that's why Boston won. This year, the Lakers have to focus in on their defense and being more of a physical team. Andrew Bynum will provide both of those factors, though.

RK: And one more, what are your thoughts on the Iverson trade?
MJ: I think that at the end of the day it's going to prove to be a good move for both teams. Just like now, you see both guys helping their teams. Most of the time you say, Is it going to be an even trade? This one will be. The local kid goes home in Chauncey Billups, and now you're probably going to see Carmelo be more comfortable because he'll be the first option, and the second option. (Laughs) And I think for him and his game, he's going to grow from that. And you've got a guy in Billups who's going to make big shots for Denver. The local kid comes home, he went to the University of Colorado, and he's got a world championship ring; it's going to be great for the whole city and the whole state of Colorado to have Billups come back. What a story. Allen Iverson, meanwhile, goes to Detroit, where they needed him because he's a breakdown guy at the end of the shot clock. They don't have good one-on-one players; they have good team players that use screens, but you beat them when you get to the playoffs because nobody on that team can take you off the dribble. Now they have one of the best ever at taking people off the dribble. That makes Detroit more explosive, and also more exciting to watch. Even though Detroit was successful, you didn't really like watching them. They were a grind-it-out team, but now they're up and down and more exciting, so I think that that's good for Detroit and good for basketball. He's a good fit in Detroit and in Michigan. Billups was tough, but Allen is tough in a different way, so it makes it great. And also, too, it puts some life in that team. They were lifeless. So now you can see them being like, 'Oh, OK. Allen's here and he's playing like this? OK, I gotta run more. I gotta play harder.' Things change when you get that sparkplug and he's that sparkplug.

RK: Thanks for your time, Magic.
MJ: It's been my pleasure.