Five years before Michael Jordan signed with Nike and paved the way for what would become a multibillion-dollar sneaker empire, the then-fledgling company approached another basketball legend.
To his long-lasting regret, however, Magic Johnson turned Nike down, choosing instead to sign with Converse. The former offered him stock options, the latter cash. Nineteen years old at the time, the budding baller lacked the financial savvy, and sound counsel, to thoroughly parse the opportunity and went for the guaranteed money.
HBO’s new drama “Winning Time: The Rise of the Lakers Dynasty” portrayed this missed opportunity last week. In the show’s telling, Nike co-founder Phil Knight personally offered Johnson a dollar for every pair sold, “100,000 in stock options” and his name prominently emblazoned on a basketball shoe not dissimilar to the Air Force 1 high-top silhouette. Converse, meanwhile, gave him $100,000 a year. According to “Winning Time,” Johnson missed out on $5.2 billion.
Exactly how much the Lakers star actually lost out on is unclear. The show, which has previously played fast and loose with the facts, states that Nike’s stock was 18 cents in 1979, when in reality it went public the following year at $22. Since its founding, it has undergone seven 2-for-1 stock splits, which brings its split-adjusted IPO price to 18 cents. Whether “Winning Time” correctly accounts for these splits is uncertain, but seems unlikely given Knight’s character explicitly says the stock options he is offering Johnson are “18 cents a share” “right now.”
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Though the exact amount Johnson lost out on is uncertain—he very likely would have sold stock over the years, not to mention there is no way of knowing exactly how many Magic sneakers Nike would have sold—it is true that Knight offered him stock when he pitched him on a potential Nike deal in 1979. At least, Johnson has said as much publicly on multiple occasions.
In one video that got some attention on Twitter in the wake of last week’s “Winning Time” episode, Johnson states that he “would’ve been a trillionaire by now.” This would be impossible on Nike stock alone, given the company’s market cap currently sits at $209 billion.
In a 2017 interview with Ellen DeGeneres, Johnson recalled how, when he came out of college in 1979, “all the shoe companies came after [him].” While the others offered him money, Knight, who didn’t have the funds to match the deals proposed by his larger competitors, said he would give Johnson “a lot of stocks,” the former Laker recalled.
“I didn’t know nothing about stocks,” he added. “I’m from the inner city. We [didn’t] know about stocks, at that time. Boy did I make a mistake. I’m still kicking myself. Every time I’m in a Nike store I get mad, right? I could’ve been making money off of everybody buying Nikes right now.”