Cisco Reaches Multi-Year Deal With Magic Johnson Enterprises

By Eric Fisher, Staff Writer, SportsBusiness Journal

Magic Johnson Enterprises Strikes Deal With Cisco

Cisco has struck a multi-year partnership with Magic Johnson Enterprises in which the technology outfit will supply the former NBA star’s company a variety of its high-end products including a desktop-based video-conferencing solution, wireless connectivity and a new data network across MJE’s 22-state operation. While not directly a sports-related deployment to match recent deals with the Yankees, among others, the Cisco-MJE alignment is still a direct result of Cisco’s existing alignment with the NBA and arrives as Johnson is preparing a cross-country tour to promote his new book, “32 Ways To Be A Champion In Business.” “I saw what the NBA was doing and I jumped right on it,” said Johnson, who participated from L.A. in a TelePresence-based briefing of the Cisco alignment with reporters in N.Y., San Jose and Boston. “Things for us are now happening a lot quicker and more efficiently, we’ve gone to a whole different level operationally.”

CONTINUES TO DIVERSIFY PORTFOLIO: MJE has continued to diversify its portfolio with recent entries into supplying meat for Burger King restaurants and a workforce training operation joining prior holdings with Starbucks and 24-Hour Fitness franchises, and his urban-oriented private equity fund, among others. Johnson said the economy has taken an impact on several of those elements, with same-store sales at his Starbucks locations in decline and his 24-Hour Fitness locations shifting to a membership model with no down payments upon joining and month-to-month payments. Still, he said his average per cap sales at his Starbucks locations are $4.68, $0.06 above the company average, while his 24-Hour Fitness locations also remain above company averages for membership totals. The Canyon Johnson Urban Fund raised $1B in additional capital in April, several months before the economic decline began to worsen precipitously. “You have to adjust in this economy -- simple as that,” Johnson said. “We’ve been doing that and will continue to do that. But we’re fortunate to be diversified like we are, and things like our meat business are great because more people are eating fast food than ever.”

MISSING SEATTLE: Johnson also had sharp words regarding the departure of the Sonics for Oklahoma City, while not directly referencing team Owner Clay Bennett, league Commissioner David Stern, or the bitter, unsuccessful efforts to replace KeyArena. “That really hurt the league. The Sonics were so loved there,” Johnson said. “I remember playing in the Kingdome when it was completely filled. ... Seattle shouldn’t have lost that franchise, but it did. And I see relocation happening [in the NBA] at least a couple more times,” he said, citing the economy and new, unfilled arenas such as the Sprint Center in K.C. as potential factors. Johnson in '02 briefly pursued purchasing a minority stake in the Sonics with then-Owner and Starbucks Chair & CEO Howard Schultz.