Championing Success: Magic Johnson’s Winning Strategies

For me, I wanted to do two things right growing up. I wanted to play in the NBA and I wanted to be a businessman.

How much more successful would you be if you had lunch once a week with insanely successful entrepreneurs who share their biggest secrets on how they think and achieve success? Grab your seat at the table, cuz. This is Business Lunch with Roland Fraser and Ryan Dice. Welcome to another episode of Business Lunch. And today's a snackable episode with Roland where he's going to get into some more tactical strategies that you can start using to live a rich and happy life. If this is the first snackable episode you're hearing, I'd encourage you to go back and listen to some of the other episodes that Roland has put out. And if you want to get notified every time we release a new episode, go to the new businesslunchpodcast.com website and we'll send you detailed notes along with every episode. That's businesslunchpodcast.com www.businesslunchpodcast.com and you can sign up for the free email newsletter where you'll be able to get all the highlights and resources from the episodes.

Hey, man.

How you doing, bro?

I'm doing good. How's everybody out there?

Thank you so much for making your schedule work to come and hang out with us.

Well, I know my friend Snoop was supposed to be here and I said, hey, he couldn't make it. He was sick. So they said, magic, can you fill in? Roland called. I said, okay, I fill in for Snoop. I can't rap like him, but I can do some of the other things.

Yeah, I like it, I like it. I got a question for you. How did you or when did you know that there was life after basketball? Because you did everything basketball, and now you've almost, I don't know, eclipsed isn't the right word, but I mean, certainly matched in the entrepreneurial world. Were you kind of like, when did you see that basketball was going to lead to all this other stuff?

Well, Roland, I think that for me, I wanted to do two things right growing up. I wanted to play in the NBA and I wanted to be a businessman. So the best thing that happened to me, I was smart enough to befriend the owner of the Lakers, Dr. Jerry Buss, and I asked him to be my first mentor. And why I'm here on this stage today is because I got a lot of mentors, but he, he was the first one. He let me look at the Laker books on how the Lakers made money from the season ticket holders to the sponsorships, to radio, TV deals. And I think about that life lesson, that business lesson that he gave me really helped me to start my own business. And so mentors were the key to my success. But I knew from an early age I wanted to be in business. And one thing that really got me started early into business, Kareem Abdul Jabbar, probably the greatest center that's ever played in the NBA. His agent. Yeah, thanks. His agent took all his money. So when that happened, I said, I don't never want that to happen to me. And then this happened. So when that happened to Kareem, I went to Dr. Buss and he sent me to a guy named Michael Ovitz. At that time Michael Ovis started CAA was the biggest agent in the world. And I wanted him to represent me. And he had all the actors, directors, producers, writers, but he didn't have an athlete. So, Roland. I got to his office. I'm an early guy, so the meeting was at 2 o'.

Clock.

I got there at 1. And he made me wait till about 4, 4:30, right. And finally I went into his office. He said, why should I represent you? Most athletes spend more money than they make. They're not serious about becoming a businessman. He kicked me out of his office.

Now, did you think he was going to be like, man, I'm so excited to have you?

You know, privilege.

Exactly. Magic Johnson did not matter to Michael Ovitz. I went in six, nine. I came out your height. So three weeks later, he called me back and said, I heard, I did my research and I heard you're serious about becoming a businessman. This is what I want you to do. You read these 10 papers, Wall Street Journal, New York Times, on and on and on. And I'm a. When you come back, I'm going to quiz you. If you pass the test, I'm going to represent you. I passed the test. He represented me. And this is what he told me. Do you think you're the best basketball player? I said, yes. Then you got to hire the best lawyer, the best money manager, business manager, accountant, on and on. Always run with the best people. I went home the next day and fired everybody.

Really?

Yeah. Because I didn't have the right team in place to take me where I wanted to go. Now all of you got to make those same choices. Do you have the right team in place to take you where you want to go? And so for me, I got the right team in place. That's why I. Where I am today.

That's awesome. So you, you mentioned.

Thank you, thank you.

You mentioned mentors. How do you go? Because there's so many people that aren't qualified that are saying they are, and it's hard to kind of move through. How do you, how do you pick a mentor that you think is actually going to help a lot?

I think, Roland, you just said it. You know, first, are they qualified to be one?

Right.

And then will they tell you the truth? And I wanted everybody who was going to be honest with me because I really wanted to learn business. I knew the pick and roll, I knew the jump shot, I knew the no look pass. That's easy. That comes easy to me, basketball. But I had to first take self evaluation of myself and say, I don't know business. So please let me get some mentors to teach me business. Peter Gruber, who is one of the Golden State warriors owners, Mandalay Entertainment right now, also one of the Dodger owners, he became a mentor of mine. He was running Sony at that time, and I built Magic Johnson theaters in the inner cities and he was running Sony. So we did the deal and I asked him to also mentor me. Now we own six companies together, you know, and so it's amazing that mentors can also become your business partners. So just get people who are going somewhere, you're trying to go somewhere, and that they're going to be honest with you and help you along your journey and walk in life, in business and outside of business.

So you did, you started like a lot of the early investing that you did was urban, where franchises were afraid to go. And you kind of, you did some really cool things, including negotiating with the gangs to hang out at your theaters and not, not kill each other.

That's right.

Are you still doing that? Because I know you took that up to like the scales of billions and billions. Are you still doing that?

Yeah, we're still doing some of it, yes. Not as much anymore, but we're still doing urban redevelopment, urban investing. I've invested in a lot of urban companies, but now my portfolio is huge. When you think about the Dodgers, yeah, We won the World Series last season. Yeah. And you think about all the sports teams. When you think about the valuation of sports teams now, it's amazing, Right? Think about what Jerry Jones paid for the Dallas Cowboys and Now it's worth 5 billion. And he only paid like 175 million for the team. Right. And the same thing for our Dodgers, what we paid for them, 2 billion. Now Forbes just said we're worth 4 billion and growing. So I'm into that. The WNBA, the Sparks, MLS.

Esports.

Esports. We got Team Liquid.

Yeah, we got.

Actually, we're the best team in esports right now. And so it's really great. And so those are the things that I'm investing in. And they got high returns. And when you think about sports teams, they got multiple revenue streams. That's very important to me. And so I'm excited about my company. And also to diversify, you know, in different sectors. And that's great, too.

Any, like crypto, nft, that kind of stuff?

Yeah, nft. Yeah, we're entering into that space. Matter of fact, I got four contracts on my desk right now. Just got to pick one. But we're vetted. We've been vetting all the companies and trying to decide the best way to go. And so, yes.

How do you evaluate new opportunities when you're looking at things like that?

Well, Roland got a team of people who first vet not only the deal, but who brought the deal, who are going to be involved, like the principals. So we want to vet them, vet the deal. Look at five years running, what the revenues were and are and then what we project, what they could be. Right. And how can I add value to those deals? So that's what I look at. And if I like the people, because I'm too old now to not to be married to somebody I don't like, you know, and the same with a lot of entrepreneurs, right? Because that's a big part of it. When you partners, you're gonna be married to each other for at least five, seven, eight years, you know, and so that's important to me. And then who's managing the company? That's very important. That's what I look at when I buy companies. I look at the management team as well. And so not only the P and ls, but you got to look at who's managing the company and have they done a great job. So if not, then you got to get rid of them, bring in a whole new management team, and hopefully, you know, those revenues will go up and you get the sustainability and the growth that you're looking for.

When you're looking to do something, are you long term buffet like or saying, well, this will be good for a while and then I'd like to exit. Cause I know you've had lots of acquisitions and lots of exits. What's your philosophy when you're kind of going into something?

I'm an exit man.

All right. I like it.

I like that. Three to five Year plan.

Nice.

I don't fall in love with nothing. I want to build it, grow it and sell it and say good luck to the next people. You know, that's how I look at it. Now there are some long term plays, you know, I mean, the Dodgers are long term play, right. And so my financial services business, even though three people wanted to buy us already, we've owned a business for about almost four years now. When I bought, we were at 14 billion EquiTrust and now we're at 23 billion this year. And so we've been growing it by a billion every year. Doing a great job.

It'll pick up, don't worry.

Yeah, yeah, let's hope so anyway.

That's great.

When.

And do you do a lot of work with partners, right?

Yeah, because I like partners. Because we both bring expertise to the table and we can come together and we'll spell out the roles. Hey, you do these things, I do these things and then let's go make it happen. So I like it. I started my business in partnership, so.

I enjoy them when, when you're looking at doing something like a deal with somebody and maybe a friend is involved. Have you worked with friends and family in the business?

No, no, no, no. I pay my friends and family to stay away. I think, I think my son, you know, I work with my, my son, of course. But listen, it's still about an expertise. It's about what are you bringing to the table, right? And we have to look at that because what we found out, if you think about small business owners, most times family and friends are the ones who cause you to fail, right? Because you know, they're not showing up on time or they, you know, not doing their, pulling their weight, not doing their job. And so I like the fact that you got both of your sons working with you and for you and same thing with me, you know, you want to work with your family, but there you have to spell out role for them. And they must deliver. Matter of fact, I'm gonna take that back. They must over deliver. There's not enough in the marketplace today for all of us out here just to deliver anymore. We gotta over deliver. Especially you think about your clients, your customers. Because the marketplace is saturated now, right? And so you gotta make sure you over deliver so you can get the retention that you're looking for. The reason my business has been successful is because we over delivered in the inner cities to our customers. I have the number one brand in urban America, so they're loyal to my brand. They Trust my brand. And, and that's what it's all about. Because we over delivered to them.

You said that very often you find opportunities in problems. Tell us a little bit about that.

Well, I think that, you know, just like now people look at. Because during this Covid time, I'm aggressive. During COVID I'm looking for companies to buy. And so when I think about problems, that's what I'm talking about. Or companies that had problems driving revenue or, you know, being successful, I can look at that company and with my brand and the ability to say, hey, I know we can make that business profitable. So let's buy in low and then, you know, drive the revenue up and then exit at a high number. And we've done that number of times. And so that's what I'm talking about. When I talk about problems.

That's great. And you also said it's good to find the future. What does that mean?

Well, so right now I'm into infrastructure, right? So right now they figured that's a $20 trillion opportunity in the next 10 to 15 years. Why? Because all our infrastructure is old here in America and around the world. Basically, when I came in from the airport, the street I was supposed to come down, a water main had busted. Why? Because them pipes are old. You go in la, pipes are old. You see it happening all the time. The rail system, airports, colleges, on and on and on. It's just old. So I looked at it and said, I gotta jump in early. So I started my company before all this happened. And we're getting deals all across America right now. So when I think about opportunity, I think you got to be ahead of it, right? And so I've been ahead of this infrastructure opportunity. And we, we did LaGuardia Airport, the Denver airport, I can't mention another one we won. But on and on and on was it. You can't mention this one. I'm in the quiet period, but I'm aggressive during this time and I like that. There's a lot of great deals. What's interesting is a lot of capital out there is just finding the right deals.

Speaking of capital, I know you said that when you first were trying to get your businesses going, you were going to use other people's money. You went to multiple banks and it was, we love you, we need to have you come back and sign this one thing and you do it. And then crickets or yeah, it didn't work out. And then you went a whole different route. Would you kind of share your evolution? Because I know there's a lot of people here that would love to take advantage of opportunities, but they don't have the capital to do it. Would you kind of share that? Because you got a great story?

Well, I'd like to get up, too. You know, I'm a walk person.

So.

You would think that being Magic Johnson, that people say, oh, here's a lot of money. And that wasn't the case. Matter of fact, Magic Johnson worked against me, and they said, oh, we want your picture and your autograph, but we don't want to give you the money. And so I got turned down seven to eight times from banks about getting capital because I wanted growth and sustainability. And the only way I could do that is to use other people's money. And so I had a track record of success, too. When I think about all the things I was doing, we made money, but still, people were not ready to invest in urban America. In the inner cities of America. Just look at this. African Americans got a $1.5 trillion spending power. Latinos got another $1.5 trillion spending power. That's $3 trillion of disposable income. And that's why I invested in urban America. It's the spending power that nobody was going after. But in order for my business to take off, when I landed the Starbucks deal and that deal, everybody thought, no way that I could get Starbucks to come into urban America. Well, I did. Howard Schultz and I did a deal, but I needed capital to build 125 Starbucks. And those eight, nine banks turned me down. So finally I went up to Seattle. I'm sorry, to Sacramento, to the pension funds. They turned me down three years in a row. But finally, the fourth year, Calpers said, okay, I believe in you, so I'm gonna give you $50 million. And if you're successful with the 50, you can come back and get 100 more million, right? And so I invested in a shopping center in the inner cities, bought it for $22 million, 40% occupied, took it up to 100% occupied, resold the center for 48 million, took the 26 million profit up to Sacramento. They said, oh, I guess you do no business. So that's what got me started. And then I was able to get access to capital. But this has been. I busted through doors and walls for a lot of minors, even sitting in this audience today, where we couldn't get capital and still sometimes still can't because of the color of our skin, unfortunately. But we just want an equal opportunity. And then once we get that we got to over deliver and we gotta make sure we make our business become successful so we can not only have more access to capital, but also another one can walk in the door behind you. And that's very, very important. Okay, so I want to tell you the Starbucks story real quick. Is that okay, Roland?

Sir.

And I know we're supposed to get off in a minute. How much we got? We still got time.

That's your countdown.

Okay, cool. So Roland gave me. Let's give it up for Roland because him and his. I've been in business for over 30 years and I quite haven't read a bio quite like Roland's this dude, man. The success that he's had and he gets to share that with all of you. I hope you guys been taking notes because it's important. This brother has been amazing and I like his partners too. And so this is what happened. I go up to Seattle, knock on Howard Schultz door, chairman, CEO of Starbucks, and I said, look, minorities, we like coffee too. We want some of that good coffee. But we have to drive 45 to a half hour to an hour outside our community to get some coffee. Starbucks. So I said, if you build them in our community, they're going to be very, very successful.

Can I interrupt for just a half a second? You found that out by actually getting out and asking people at Starbucks, right?

That's right, because that's. You were close to the customer, you had first party data.

That's just so smart.

Yes. I also got out in the community, asked them what did they want. And everybody I talked to wanted a Starbucks to come into the inner cities. And so we did the deal. He came down, this is the funny part, he came down to see my movie theaters and see how I managed my theaters. That was going to be if he gonna decide to do the deal or not. And thank God, Whitney Houston's first movie was coming out, Waiting Exhale. So I had 5,000 black women wrapped around the corner to come see this movie Friday night. So he walks up and he said, man, what's going on here? You know? And I said, wayne Exhale's coming out, so every theater is sold out. And he came in, he had to see how we managed the theater, see how we got the people in and out of the concession stand into the theater. We did it at an amazing rate. And then we went in to see the movie. The movie pops up about 20 minutes in. See, we go to movies different than everybody else. So we start talking to the screen. Girl, why you still with him? You should dump him. And Howard elbowed me. Hey, come on out into the lobby. So we went out to the lobby. He said, magic. I haven't had a movie going experience quite like this. Guess what? That got me the deal. Now, I told you this story. Because of this, sometimes you got to take people to the deal. See, he had to come to urban America to see the rooftops, to see how people went to the movies. Because what he saw was people, if they spent $14, $10 to go to the movies, they're going to spend the money necessary to go to Starbucks. So it worked out great. We built 125. And the great thing is the headline rolling in the LA Times said, no way minorities have paid $3 for a cup of coffee. Thomas, we'll pay $3 for a cup of coffee. We quite don't know what scones are, though. So I had to take the scones out of my Starbucks, put in sweet potato pie, peach cobbler, things that resonate with the urban consumer. Now get this. They said it would never work, right? My per caps were higher than his per caps. Per customer. Yes. That's what made us successful. Stand up, Thomas. Go ahead, do the selfies. Turn around. Turn around first. All right, hold on one second. What's your favorite music group? My favorite music group? Yes. Oh, shoot. Favorite music group? Oh, man. Come on, just one. I hate myself. Sophie Tucker. Who? Sophie Tucker. Sophie Tucker. So he likes Sophie Tucker. Now they play music in. In the Starbucks. So I had to take Sophie Tucker out of my Starbucks. Michael Jackson, Prince, Beyonce, Jay Z, Snoop. Now, why did I say that? Because that's my customer base. Why did I say that? Because that makes me over deliver to my customer base. Now, you all are entrepreneurs. Do you know your customer? And then will you in return over deliver to them? So guess what happened because of that? They all became my brand ambassadors. They went out and sold my business for me.

Right?

So that's what I'm talking about when I'm talking about over deliver. All right, let's give him a hand.

Listen, I know Magic was kind enough to fly in. He actually came in. He has to be in Seattle in about two and a half hours. It's a two and a half hour flight. That's how cool you are for coming in. Let's give him a huge hand.

Thank you. Thank you. Good luck. Good luck to everybody. Hold the music. Hold the music.

Hold the.

Hold the music. All right, nothing in your hands. Let's go. Everything out your hands. No phone in your hand. Nothing. Put it in your pocket or in your seat real quick. All right. When you go home, did you learn a lot? And if you learned a lot since you've been here these last two days, clap two times. Oh, no, no, it wasn't that good. That means you didn't learn a lot. All right, we gonna try this again. If you learned a lot, and you're gonna apply what you have learned these last couple days, when you get home, clap two times, okay? Oh, no, no. Two time, not. Not four times. If you ready to conquer the world, your business gonna be off the charts. When you get home, you're gonna have amazing 20, 22. Clap six times. Nice, nice, nice, nice. Okay, if Roland is amazing, this conference is amazing. Clap 10 times. Now, if you gonna end up like Roland in the Magic man, your business gonna be, let's say in two years, you gonna be like crazy. Cause see, I always set goals. I always set goals. See, you gotta set goals and then try to accomplish your goal. Don't let anybody distract you from going after your goal. So you gotta say, hey, in three years, I'm gonna be here. Two years, I wanna be here. That's what I do. If you gonna do that, and you love the Magic man and rolling. You know what number I wear? Number 32. You gotta clap 32 times.

Go. Hey, Roland Frazier here. If you're looking for a way to grow your business exponentially to get more customers and ultimately increase your wealth, this. There's no faster way to do it than to acquire other businesses that already have the customers, products, services, teams and media that you want. If you want to double your sales, just acquire a company that has the same sales as yours. It sounds simple, but far too many people end up starting new businesses that fail and forget that they could skip all the hard stuff and just acquire one that already exists. There's a reason why private equity firms, family offices, big companies like Apple, Google, and some of the smartest entrepreneurs on the planet do. Do not start new businesses from scratch. They acquire already successful businesses, and when they do it, they instantly increase their sales, their profits. If they want market share, they increase that they can get new products and services to offer, all instantly. Hey, look, 90% of new businesses fail. 90%. Why not acquire an already successful business and increase your chances of success by 900%. What most people don't realize is you can acquire highly profitable businesses with no money out of your own pocket in pretty much any country in the world, regardless of your credit, and without having to go find a bunch of investors. Or needing any experience. Look, I've been acquiring businesses for over 30 years now and I cover the whole process in my EPIC Investing Strategy training and I want to give it to you 100% free. Just visit businesslaunchpodcast.com EPIC to get your free access to my EPIC investing training right now while it's available. Hey, Roland Frazier here. If you're looking for a way to grow your business exponentially to get more customers and ultimately increase your wealth, there's no faster way to do it than to acquire other businesses that already have the customers, products, services, teams and media that you want. If you want to double your sales, just acquire a company that has the same sales as yours. It sounds simple, but far too many people end up starting new businesses that fail and forget that they could skip all the hard stuff and just acquire one that already exists. There's a reason why private equity firms, family offices, big companies like Apple, Google, and some of the smartest entrepreneurs on the planet do not start new businesses from scratch. They acquire already successful businesses and when they do it, they instantly increase their sales, their profits. If they want market share, they increase that they can get new products and services to offer, all instantly. Hey look, 90% of new businesses fail. 90%. Why not acquire an already successful business and increase your chances of success by 900%? What most people don't realize is you can acquire highly profitable businesses with no money out of your own pocket in pretty much any country in the world, regardless of your credit, and without having to go find a bunch of investors or needing any experience. Look, I've been acquiring businesses for over 30 years now and I cover the whole process in my EPIC Investing Strategy training and I want to give it to you 100% free. Just visit businesslunchpodcast.com epic to get your free access to my EPIC investing training right now while it's available.