Why Magic Johnson Rejected $5B of Nike Stock 📈 😲
Plus the NBA links up with Kim Kardashian and the Las Vegas Sphere takes over sport.
Welcome to Athletic Interest.
Earvin “Magic” Johnson Jr. has just joined a very exclusive club in sports, the Athlete Billionaire Club. Despite screwing up the biggest deal of his career.
According to Forbes, Johnson now has a net worth of more than $1.2 Billion and joins Tiger Woods, Lebron James, and Michael Jordan in their list of athlete billionaires.
On the surface, the news that a big-name athlete has made lots of money is not exactly exciting or unexpected. We now live in a world where footballers are being offered the GDP of a small nation to transfer clubs. That being said, Johnson’s rise to billionaire status is interesting for two reasons:
He didn’t really earn that much money from Basketball.
He could have been worth 5x this amount many years ago but made a huge mistake…
First off, Johnson only made around $40 million ($110m adjusted for inflation) during his decade-plus NBA career. While this is still a life-changing amount, it’s important to note that Lebron has made almost $500m from his NBA career and hasn’t retired yet. Johnson had to make the rest of his fortune through strategic investments. He now has stakes in several sports franchises including NFL’s Washington Commanders and MLB’s Los Angeles Dodgers. He also has a controlling stake in EquiTrust, a life insurance company that makes up most of his wealth.
But Johnson could have become a Billionaire many years ago, in fact, he could have been worth more than $5 Billion without even breaking a sweat.
After winning the NBA title in his rookie season, Johnson received sponsorship offers from Converse, Adidas, and Nike. Converse offered the most money, $100k per year, while the fledgling Nike brand could only offer 100k shares (valued at 18 cents each) and $1 for every shoe sold.
Johnson took the instant cash and has since expressed his regret. According to his own calculations, the Nike stock alone would be worth $5 Billion today. He can ask Michael Jordan how much extra the royalty deal might have earned him.
🔮 🎲 One thing that most of us in the Athletic Interest office have been fascinated with recently is the Las Vegas Sphere.
Ever since we witnessed the cool visuals, we wondered how this technology could be used for sports, and it looks like we finally have an answer…
TNT Sports, a broadcaster of the NBA and NHL in the U.S., has just teamed up with Cosm to create immersive broadcasts of selected games that are inspired by the Las Vegas Sphere.
New venues will be constructed in Las Vegas and Dallas that include wraparound 8k screens and space for 2k spectators.
It is no surprise that the sporting world has been inspired by the Sphere. It allows broadcasters to get their fans closer to that live experience while keeping them as consumers. For sports like UFC, Boxing or WWE the Sphere could also be a perfect venue to elevate the live experience.
👙 🏀 The NBA has just signed an underwear deal with Kim Kardashian.
You may not have been expecting to read this, and we certainly weren’t expecting to write this, but it’s happening. Kim Kardashian’s Skims underwear brand is the official underwear partner of the NBA, WNBA and USA Basketball.
We are sure you have many questions, and we will try our best to provide some answers.
Yes, Skims is predominantly a female underwear brand. No, it’s not normal for sporting series to have underwear partners. That being said, this is a smart move for both sides.
Skims has just introduced its first male line and will see the NBA’s massive young and male audience (70% male) as the perfect target group. We already know that sport sells, and having NBA stars in Skims products will instantly normalise the idea with younger men. Skims can also take inspiration from Lululemon. The company has pivoted towards the male market recently and seen a 60% increase in sales of men’s products compared to just a 37% increase for its female lines.
For the NBA, the attraction is actually the opposite. The league is a little concerned that its audience is predominantly male and sees association with Kim Kardashian as the perfect way to encourage a younger female demographic. Just ask the NFL what association with Taylor Swift has done for its demographics.
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