Magic Johnson Sells Starbucks Shares
Basketball Hall-of-Famer Earvin "Magic" Johnson has sold his 50% stake in more than 100 urban Starbucks(SBUX) stores back to the company, Starbucks said Thursday. The news comes only three days after Johnson sold his minority stake in the Los Angeles Lakers to Dr. Patrick Soon-Shiong, a billionaire surgeon who's been a season-ticket holder for 25 years.
Through Magic Johnson Enterprises's Johnson Development Corp., Johnson in 1998 partnered with Starbucks in a joint venture, called Urban Coffee Opportunities, to open stores in underserved neighborhoods in Los Angeles, New York and Washington D.C.
"Together we opened several successful locations, including our Harlem store, which led the redevelopment of that now vibrant neighborhood," Starbucks CEO Howard Schultz said in a statement Thursday. "Thanks to this partnership, Starbucks has deepened our commitment to community development in urban areas and plans additional programs to sustain that commitment."
The company didn't disclose those stores' financials. But the Los Angeles Times, which got the news from an anonymous source Tuesday, put the combined value of Johnson's stake in Starbucks and the Lakers at about $100 million. The unnamed source called the sales "a good business decision."
Neither Starbucks nor the Lakers indicated why Johnson made the divestments. Since 1991, Johnson's extensive real estate investments have included shopping centers and movie theaters. In May, the Washington Hilton completed a $150 million renovation funded partly by Canyon-Johnson Urban Funds, in which Johnson is a partner.