ANA Conference: Magic Johnson to Launch Media Company

Sports Great and Urban Entrepreneur Will Push Wireless and Web Content

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LOS ANGELES ( -- Urban entrepreneur Earvin "Magic" Johnson will turn media entrepreneur in early 2007 with the launch of Magic New Media, he told more than 300 attendees at
Photo: Steve Raddock
Basketball great and urban entrepreneur Magic Johnson is expanding his business in a way that could ultimately make him a media mogul. | ALSO: Comment on this article in the 'Your Opinion' box below.

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the Association of National Advertisers' Multicultural Marketing Conference yesterday afternoon.

Wireless and web
Mr. Johnson, who is chairman-CEO of both Johnson Development Corp. and Magic Johnson Enterprises, said his new venture will include wireless and the web.

"Every company's looking for these eyeballs," Mr. Johnson said later in a brief interview with Advertising Age. "There's no urban play."

The new company's CEO is John Huffman, who was CEO of Real Hip-Hop, a mobile hip-hop community. Mr. Huffman said social networking is all about community, and that Mr. Johnson already has a strong urban community.

Zmagic ad agency
Earlier, Mr. Johnson formed an ad agency called Zmagic, a multicultural shop in which he has a 51% stake, with Fort Lauderdale, Fla.-based retail specialist Zimmerman, part of Omnicom Group. Zmagic, started in December 2005, is run by President Douglas Melville and Chief Operations Officer Barry Wade.

During his talk at the ANA conference, Mr. Johnson spoke about his 103 Starbucks outlets, 32 Burger King restaurants, AMC movie theaters, 12 gyms and other holdings in what he describes as "Urban America."

He stressed the importance of investing in urban media.

"It can't be from 20,000 feet; your marketing now has to be on the ground," he said. "Whether it's black radio, magazines, newspapers or street teams. And the budget can't be $100 million and here's $2 million for you. By 2014, half of Americans are going to be minorities. That's the way budgets are going to have to go. And you've got to get started now, not later. Somebody beat you in, we're going to stick with them."

No political plans
During a Q&A session afterward, Mr. Johnson was asked whether he might enter politics and run for public office. He said he has a strategy planned for his business that will take the next 10 years.

"It took me a long time to convince financial institutions, as well as corporate America, to invest in our communities," he said. He started about eight years ago with Starbucks and will have 125 Starbucks franchises by the end of 2007.

"We'll pay $4 for a cup of coffee," he said. "We just won't pay for the scones. We're still trying to figure out what that is."

Mr. Johnson said he makes a practice of not changing but tweaking the brands he invests in to resonate with Urban America's consumers. At Starbucks, for instance, he nixed the scones and added pound cake and peach cobbler instead. Out went the elevator music, replaced by R&B and Motown. And he added evening entertainment, such as jazz nights and comedy nights.

Burger Kings and Starbucks
He also "Magicizes" outlets, hanging his photo at his Burger Kings and Starbucks, and adding his name out front to Magic Johnson TGI Friday and Magic Johnson 24 Hour Fitness.

"Urban America is like a foreign country in a sense," he said.

When he opened a movie theater in Harlem, for instance, the food buyer couldn't understand why he wanted so many hot dogs and assured him that the theater had enough for a month. The hot dogs sold out on opening night.

"The buyer didn't know you're not going to have dinner then a movie," Mr. Johnson said. "We're going to have dinner right in the movie."

That's why he added quesadillas and fried chicken to the movie menu.

His continuing fame, after a 13-year career with the National Basketball Association, gives him a major edge in promoting his businesses.

Every time he appears on the "Tonight Show," he said, Jay Leno pulls out a Starbucks mug and asks how many Starbucks outlets he owns now.
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