The sale of the Los Angeles Dodgers this spring for $2.15 billion brought Los Angeles Laker legend Earvin “Magic” Johnson back into the sports spotlight — this time from the owner’s box. Control still rests with Guggenheim Partners CEO Mark Walter, but Magic’s still a major part of the plan.
But the entry into MLB ownership isn’t Johnson’s first business rodeo. In fact, Magic’s business acumen puts him squarely on my list of the best athlete-entrepreneurs in the history of sports. Here’s a look at my top five:
After playing 12 seasons in the NBA for both the Milwaukee Bucks and Los Angeles Clippers, the Louisville native retired from basketball in 1987. While playing, Bridgeman also worked in public relations for Howard Johnson.
Upon Bridgeman’s retirement, he bought five Wendy’s (NASDAQ:WEN) locations. Since then, Bridgeman has gone on to build a restaurant holding company with annual revenues of $511 million, operating 160 Wendy’s restaurants in five states and 103 Chili’s in seven states. So successful is Bridgeman that Manna Inc., his holding company, is listed by Black Enterprise magazine as the seventh-largest black-owned industrial/service company in the nation.
You don’t hear much from the former boxer and nemesis of both Joe Frazier and Muhammad Ali these days. It seems he’s enjoying getting older. In an interesting interview in The Wall Street Journal in June, the former boxing great talked about his love of German shepherds and horseback riding.
One of the fiercest competitors in the ring, George Foreman made a business deal in 1999 that ranks right up there as one of the best ever. At the time, Foreman was promoting the George Foreman Grill and other products for Salton Inc., and in return they paid him a royalty of 60% of the profits from the sale of his products. Foreman was getting as much as $4.5 million a month in royalty payments. Because George Foreman’s products accounted for 55% of its $506 million in annual revenue, Salton offered to buy the rights to use his name in perpetuity for $127.5 million in cash and $10 million in stock. Shortly thereafter, the bottom fell out on revenues and Salton never fully recovered. The grill is now owned by Spectrum Brands (NYSE:SPB).
Speculation has the former Dallas quarterback’s net worth pegged at $600 million. That seems a tad high. The deal to sell his real estate company in 2008 was for $613 million in cash plus $114 million in possible performance payouts. However, the late Richard Rainwater acquired 20% of the company in 1999, and it’s unknown what percentage of the Staubach Company was owned by the man himself and what percentage by other employees.
As a football player, Staubach didn’t make a whole lot, so he worked in real estate in the offseason to make ends meet. What was unique about Staubach’s company was it represented the tenant rather than the landlord — a relatively rare concept in 1982, when he established the business. CNBC sports business reporter Darren Rovell calls Staubach the “most successful athlete-businessman of all-time.” My top nod goes elsewhere, but Staubach’s right up there.
In 2009, Forbes estimated the former Laker’s net worth at $500 million. Johnson gained notoriety as a businessman when he partnered with Starbucks (NASDAQ:SBUX) in 1998 to open coffee shops in underserved urban neighborhoods in Los Angeles, New York and Washington, D.C. Twelve years later, Magic Johnson Enterprises sold its 50% interest in the 100-plus coffee shops back to Starbucks for a nice profit.
A big part of Johnson’s business history is partnering with well-known brands to create job opportunities in ethnically diverse urban communities. Very early on in his business career, Johnson realized he couldn’t do it alone and with the help of some very astute partners, has built an organization every athlete who wants to go into business for themselves should aspire to. Magic finishes in a close second because of all he has done to revive neighborhoods.
Before Roger Penske became the owner of a successful racing team, he himself was a race car driver for seven years until he retired in 1965 to concentrate on operating a Chevrolet dealership in Philadelphia. Today, Penske is the head of Penske Corporation in Bloomfield Hills, Mich. The company has its hands in many different industries, including automotive sales, truck rentals and leasing and many other businesses.
Penske Corporation’s most prominent investment is Penske Automotive Group (NYSE:PAG), where it’s the largest shareholder with 34% of the company. In 1988, Penske partnered with General Electric (NYSE:GE) to operate Penske Truck Leasing, a business with more than 200,000 vehicles across North America. As good as Penske is as a team owner, he’s even better as an entrepreneur, which accounts for his net worth of $1.1 billion, according to Forbes.
As of this writing, Will Ashworth did not hold a position in any of the aforementioned securities.