Forbes magazine has declared basketball star Magic Johnson a billionaire, decades after he lost out on a Nike deal that could have netted him $5 billion. 

The business magazine estimated Johnson's wealth to be $1.2 billion, most of which is from his investments in sports franchises and other companies. 

It said that Johnson, whose real name is Earvin Johnson, made around $40 million during his career as a basketball player, during which he starred for the legendary 1980s LA Lakers team.

But Johnson passed up an early opportunity to make billions, he revealed in a recent interview, when in 1979 he declined an offer to be paid in shares by Nike before the company became one of the world's biggest brands. 

"My family didn't come from money, that's one thing that hurt us sometimes. When you don't come from money, you don't know. I didn't even know what stocks [were] at that time," Johnson told the All The Smoke podcast earlier in the year. 

Instead, said Johnson, he accepted a sponsorship deal with Converse, that paid him $100,000 a year upfront. 

The Nike deal would've seen Johnson paid $1 for every pair of trainers sold and 100,000 shares in company stock.

Back then, Nike shares were worth around 18 cents each, while today they are valued at around $100, so a shares deal would've been hugely more profitable long term. 

"So I passed on the stocks. Can you imagine? 45 years, $5 billion that stock would have been worth today," Johnson said.

Forbes said that Johson has invested in LA sports franchises the WNBA's Los Angeles Sparks, MLB's Los Angeles Dodgers, and the MLS' LAFC. He also has investments in companies including Iowa-based life insurance company EquiTrust, and PepsiCo. 

He is the 4th sports star to be declared a billionaire by the magazine, after NBA stars Michael Jordan and LeBron James, and golfer Tiger Woods.

Johnson retired in 1991 after being diagnosed with HIV, then briefly returned to the game before retiring for good in 1996.