Magic facing a new kind of pressure to perform

Yes, the guy is a sports icon, an inspiration, a success in many facets of business. In 2009, Forbes estimated his net worth to be $500 million, much of that coming from his holding company, Magic Johnson Enterprises. And that's the point: Up to now most all of Johnson's success has been based on real estate and franchise investments that don't really involve day-to-day operations - and which don't come close to having the visibility of the Dodgers. Here's some backstory from Forbes:

The company currently oversees 16 business partnerships, ranging from public speaking deals with electronics retailer Best Buy and Aon Enterprises, to franchise deals with TGI Fridays and a 51/49 partnership with catering giant Sodexo for SodexoMagic LLC. Johnson and his staff have never publicly divulged financial terms of the relationships. The relationships include public appearances or co-branding efforts, such as Johnson's 12 signature 24-Hour Fitness Clubs. Magic Johnson Enterprises is also involved in a real estate partnership, Canyon Johnson Urban Funds, alongside Canyon Capital Realty. The partnership oversees a series of private equity real estate funds whose investors are public and private pensions and family foundations. The company currently oversees 50 residential and commercial properties, and claims it has overseen $4 billion in building, including projects in Brooklyn and Washington DC.

Nothing wrong with any of these ventures, but they're not the same as owning a piece of the Dodgers - and actually participating in the franchise. This time, he'll be effectively fronting a business whose customer base is passionate about its product - and he will quickly discover that there's a big difference between smiling for the cameras at ribbon cutting ceremonies and dealing with complaints about stadium security or Dodger dogs or some unsuccessful trade. Now obviously, the guy has a massive amount of goodwill going for him. That's what makes this deal so enticing. But at some point, it still comes down to winning and providing a good fan experience - and that's a tall order for any executive.

On another front, ESPN is reporting that the Dodger sale includes a 50 percent stake in the parking lots, which are said to have a value of $300 million. Current owner Frank McCourt will keep the other half.

[Controlling owner Mark] Walter said he understood the concerns, but insisted that McCourt will only have an "economic interest" in the land and not any control or influence over it. "Frank's not involved in the team, baseball, any of that," Walter said. "What Frank does have is an economic interest in land, but we control the parking and all the fan experience and that's of the utmost importance to us."

Earlier today, I was on KPCC's "Airtalk" with Larry Mantle and discussed the deal. Other guests were KPCC business blogger Matt DeBord, the LAT's David Wharton and Nick Roman, managing editor KPCC.


More by Mark Lacter:
American-US Air settlement with DOJ includes small tweak at LAX
Socal housing market going nowhere fast
Amazon keeps pushing for faster L.A. delivery
Another rugged quarter for Tribune Co. papers
How does Stanford compete with the big boys?
Those awful infographics that promise to explain and only distort
Best to low-ball today's employment report
Further fallout from airport shootings
Crazy opening for Twitter*
Should Twitter be valued at $18 billion?
Recent Celebrity stories:
Conrad Murray released from LA county jail this morning
AEG not liable in Michael Jackson's death, jury rules
Bob Hope estate in Toluca Lake listed for $27.5 million
Streisand, Tom Cruise take in Anne Frank preview
Sarah Silverman's touching obituary for her beloved Duck

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Mark Lacter
Mark Lacter created the LA Biz Observed blog in 2006. He posted until the day before his death on Nov. 13, 2013.
 
Mark Lacter, business writer and editor was 59
The multi-talented Mark Lacter
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