The Magic Touch

Earvin Johnson has worked his wizardry on his urban movie theater chain. But will his mastery continue as he seeks to become the country's leading entertainment entrepreneur?

partner Loews Cineplex Entertainment; JDC Las Vegas, the parent company of Johnson’s Westland Plaza, a 235,000-square-foot retail mall in West Las Vegas; Johnson/MacFarlane, a partnership with the California Public Employees Retirement System (CalPERS) that allowed Johnson to purchase several retail complexes in Los Angeles; and lastly, Starbucks and T.G.I. Friday’s, two of the newest partnerships under JDC.

Want more? OK. There’s Magic Johnson Entertainment (MJE). Formed in 1997, this entity develops and produces television and cable TV programs, the latest of which was Passing Glory, a critically acclaimed Turner Network Television film. Johnson was its executive producer. In March, MJE partnered with Blackboard Entertainment to form New Children’s Venture, which will create, produce and distribute a new brand of children’s educational multimedia products. Magic Johnson Management Group manages television and film stars, and counts among its performers Vivica Fox, Beverly Johnson and comedian Steve Harvey. Magic Johnson Productions promotes tours, concerts and boxing events, and then there’s Magic Johnson Music, a budding record label. In his spare time, Johnson hooked up with Janet Jackson and Jheryl Busby last year to purchase a controlling interest in Los Angeles-based Founders National Bank (No. 16 on the be banks list with $100 million in assets).

In all, JDC properties were responsible for $25.4 million in gross sales in 1998. But with Johnson’s current success comes a new question. Is the 39-year-old entrepreneur in danger of extending his business too far, too fast?

“People say I’m growing too fast. I say everything is working together. We’re growing, but not so fast that it’s not manageable,” Johnson says. “And as long as I have knowledgeable people working with me, I’m not worried about branching out.”

As an example, Johnson points to his separate deals with T.G.I. Friday’s and Starbucks. What some might see as an overextension, he views as an opportunity at cross-promotion. “I can promote my Friday’s and Starbucks in the movie theaters and do the same thing in those venues promoting the theaters. We have 1.8 million [people who go] through our theater doors every year in Los Angeles. The goal is to get a lot of that same audience to go to your eateries. Then, on the music side of it, it works because we can play our artists in those same theaters or restaurants. There’s great synergy, and it all works together.”

Industry analysts agree. Debbie A. Smith, vice president of public affairs and emerging markets with the Washington, D.C.-based International Franchise Association, believes Johnson has tapped into a winning strategy.

“He’s created a great venue for family entertainment, and the entities work hand in hand. You get to go out to a movie and then share a cup of coffee or a meal with your family,” says Smith.
Smith adds that Johnson will face competition from other eateries just like any other franchiser, “but Magic being who he is, his name alone will help attract customers. He’s a proven businessman making good business decisions. As long as he continues to understand the industries that he’s in,

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