Magic Johnson's Unprecedented 25-Year Contract with the Lakers

[00:00:00] On June 26, 1981, Magic Johnson of the LA Laker signs a historic contract last year, 20, 5 years, something that will never be seen again as NBA contract rules have vastly changed. We're going to dive into the story behind this contract today on Daily Sports History. Welcome to Daily Sports History.

[00:00:31] I'm Ethan Reese, your guide to a rapid deep dive into sports history every day. In the trivia question to listen out for today is how many championships was matches Johnson on the Lakers payroll for? Now when we talk about NBA contracts or professional sports contracts in general,

[00:00:52] that means that the players are being paid to play the game. In the very first professional basketball league was the National Basketball League, which started in 1898, which is only seven years after basketball was created.

[00:01:08] And it was mainly focused on the northeast around New York, New Jersey, Philadelphia, Delaware area. And it only lasted until 1904, but it showed that there was a want for this.

[00:01:20] As there is today, as the highest contract today is worth over $300 million by the Boston Substance Day of the Brown. Who's going to be passed this summer by his teammate, Jason Tatum.

[00:01:32] So now players are making over $50 million in Magic Johnson one of the greatest players to ever live only made $40,000 in his career. Now there's many reasons for this. One being, it was in the 80s and 90s when he played.

[00:01:46] So inflation has played a big role, but also TV contracts has played the biggest role in the growth of basketball contracts.

[00:01:55] As more these TV networks pay to show the basketball games, the more revenue that the teams are having as previously revenue really just came from France buying tickets or merchandise. Now they're getting money from TV that they didn't get before.

[00:02:10] They did get some, but it wasn't like it was before. As when the NBA first started in 1946, the highest player was Joe Fuchs of the Philadelphia Warrers and he made only $8,000. Which today would be roughly $114,000.

[00:02:27] Still a great wage that many of us would love to have, but it just shows you how far we'd come, not just with inflation, but with also deals in TV market.

[00:02:38] Ten years later, in 1956 the highest paid contract was $25,000 by Bob Kuzzi of the Boston Celtics, which today's value is roughly $286,000. So you can see in the decade that League Ansport had grown even more.

[00:02:54] Then he fast forward to this 1966 season just a decade later, Bill Russell NBA player and the first NBA player in the league to make over $100,000 a year. And today that would average just under a million dollars a year at $969,000.

[00:03:10] And a decade later, Karim Al-Dujubar is the highest played player in the league making over $650,000 a year. Which today would be roughly $3.5 million. And now is when we come closer to our story today about Magic Johnson.

[00:03:30] So in the 1979 80 season two players earned a million dollars for the first time in Moses Malone and Bill Walton. And this was also the very first year Magic Johnson played at the NBA, where he signed a four-year contract averaging $460,000 a year.

[00:03:49] Then after two seasons with the LA Lakers, he was offered a new contract by the LA Lakers who a year earlier gave Karim Al-Dujubar a contract that average $1 million per year. And that following year, Magic Johnson signed a contract for $25 years.

[00:04:12] Magic was young but the chances of him even playing for 25 years was unlikely. But the reason why he was offered this contract, it was $25 years for $25 million. Easy math there, it's $1 million.

[00:04:26] And the reason was, the owner of the Lakers Jerry Bus had already won a championship with Magic. Had already had success with him and saw him as the face of the franchise for life, which is unusual. Because it doesn't happen very much.

[00:04:42] If you think about some of the greatest players of all time, Michael Jordan, when we think of Michael Jordan, we think of the Chicago Bulls. But he also played for the Washington Wizards and owned the team in Charlotte for multiple years.

[00:04:55] Larry Bird, who's the biggest rival for Magic Johnson throughout his career in even in college. Yes, he played his entire career with the Celtics. But where did he go after his career was over? He went to the Indiana Pacers.

[00:05:09] He coached with the Pacers and was in the front office for multiple years. So to stick with the team not only through playing, but after playing is not very common, but Jerry wanted him to be with the team even after he played.

[00:05:24] He said whether it was coaching, whether it was GM, whether it was scouting, whatever it was. When he was done playing, he wanted to continue paying him to be part of the franchise forever. And so when he signed this contract, this went all the way from 1981 to 2006.

[00:05:44] Now there were some changes to his contract throughout the years. See three years later, he was already underpaid and they made some adjustments to his contract to make him the highest paid player. In the league, making $2.5 million to 1984 through 1987.

[00:05:59] And that wasn't the only time he was the highest player in the league. Because in 1994, 95, he was also giving a $14 million contract to show support for all the times he did not get paid.

[00:06:13] This was after your time due to HIV and this was him returning to the magic to play for half a season. But there was also a great time as it helped jump multiple other contracts.

[00:06:24] As in 1994, the highest paid player made five was David Robinson and he made $5.7 million. In 1994, magic made 14.6 million dollars. And it never dropped below that. So it was a huge jump. It would also include a TV ride to everything like that.

[00:06:42] But it was great for the league in players as they were making more money, being more the face of the league, being more the face of the teams. And magic really stuck to that.

[00:06:51] He's dabbled in other sporting events, his owning part of the of the Dodgers and being rumored to own other things. But he's always been part of the Lakers. Since he retired in 1991 due to HIV, he coached the Lakers. He's been an advisor to the Lakers.

[00:07:07] He returned to play for the Lakers in 1994-1995. He's been the president of the basketball operations for them as well, basically the leader of organizing the team. So he's been involved with the Lakers throughout. So this contract even though it sounds crazy and with inflation was really downgraded,

[00:07:24] it was a great steal as he always was a part of it. And the unique thing is with all this unique, with all the changes through his contract, with the different raises and extensions and all that.

[00:07:36] His 25 years started in 1984 and went to the 2009-2010 season, which is crazy because he retired, officially in 1995. Still, he was making a million dollars every year after he retired from the Lakers until 2010. Which included, when he played, he won five NBA championships.

[00:07:55] And when he was retired, still on the salary cap, the team won five more NBA championships. With Shack and Kobe and Kobe and Paul Gassault. So in total, Magic was on the payroll for 10 different NBA championships. Getting close to Bill Russell's 11.

[00:08:13] Now this was a unique contract to try to get a player, which the contract eventually by 2010 standards was low for any player, but he wasn't a player. And he was also making more than two other players on the roster in that 2010 season.

[00:08:30] But it showed the fourth up by Jerry Bus to keep the face of the franchise with them for life, which he has been. Whenever anything happens with the Lakers, Magic is there to talk about it.

[00:08:43] Yes, they couldn't have seen that he was going to retire due to HIV. They couldn't have seen all the things that happened. They couldn't have seen what role he would have with the Lakers. But they knew they wanted him around for life and that's what they did.

[00:08:57] It's a unique contract. And there are many other unique contracts that we'll go into later in future episodes. But it shows that sometimes it's not all about the money. At the time, $25 million was the largest contract in the NBA, not including per year value.

[00:09:12] But it was the longevity and the fourth thought to see we want this guy with us forever. And he's done that when many other players have not, especially in recent years. I want to thank you for listening to this episode.

[00:09:25] If you enjoyed this topic, please let a friend know, hit that little share, try and go button wherever you're listening, and send it to a buddy, say, hey, check this out. And let's talk about the other crazy contracts that we all love.

[00:09:39] And come back tomorrow for more Daily Sports History. And did you catch the answer to today's trivia question? How many titles was Magic Johnson on the payroll for? And the answer is 10. 5 is a player and 5 when he was retired.