The $5 Billion Mistake Magic Johnson Made By Turning Down Nike

In the late 1970s, a young Magic Johnson had the world at his feet. Fresh off a national championship with Michigan State and preparing to enter the NBA as the first overall pick, Magic was already a star in the making. But one business decision early in his career would go down as one of the biggest financial “what ifs” in sports history.

When Magic entered the league in 1979, Nike was still an up-and-coming athletic brand—far from the global powerhouse it is today. Back then, Nike couldn’t afford to offer massive cash deals to players like Converse and Adidas could. Instead, Nike offered Magic something different: a modest cash payment and stock options in the company.

Magic, unsure about the value of stock at the time, turned it down. Instead, he signed with Converse, which offered him $100,000 a year in cash—a solid deal for a rookie at the time.

But that decision came with an unimaginable price tag.

The shares Nike offered him back then would be worth over $5 billion today. That’s right—had Magic accepted Nike’s stock deal, he would’ve earned more from that one decision than from his entire NBA career, business ventures, and investments combined.

Magic has spoken openly about the choice, admitting that he didn’t fully understand the concept of stock ownership at the time. “I didn’t know what stocks were,” he once said in an interview. “I’d rather have the money.”

It’s a story that serves as both a cautionary tale and a lesson in financial literacy—reminding athletes and entrepreneurs alike that sometimes, the biggest opportunities aren’t in the cash you can see, but in the equity you can’t.

Still, Magic Johnson went on to become a billionaire in his own right through smart business moves, including ownership stakes in the Los Angeles Dodgers, LAFC, and countless other ventures. But the Nike deal that got away remains one of the most legendary missed opportunities in sports history.

The $5 billion mistake that even Magic couldn’t dribble past.