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

On June twenty sixth, nineteen eighty one, Magic Johnson of the LA Laker signs a historic contract lasting twenty five years, something that will never be seen again as NBA contract rules have vastly changed, But we're going to dive into the story behind this contract today on Daily Sports History. Welcome to Daily Sports History. I'm Ethan reees your guy to a rapid deep dive into sports history every day. And the trivia question to listen out for today is how many championships was Matgis Johnson on the Lakers payroll? Four? Now, when we talk about NBA contracts or professional sports contracts in general, 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 eighteen ninety eight, which is only seven years after basketball was created, and it was mainly focused on the Northeast around New York, New Jersey, Philadelphia, Delaware area and it only lasted till nineteen oh four, but it showed that there was a want for this as there is today as the highest contract today is worth over three hundred million dollars by the Boston Solfs. Jalen Brown who's going to be passed this summer by his teammate Jason Tatum. So now players are making over fifty million dollars and Magic Johnson, one of the greatest players to ever live, only made forty thousand dollars in his career. Now there's many reasons for this, one being it was in the eighties and nineties when he played. So inflation has played a big role, but also TV contracts has played the biggest role in the growth of basketball contracts. As more these TV networks pay to show basketball games, the more revenue that the teams are having. As previously revenue really just came from fans buying tickets or merchandise. Now they're getting money from TV that they didn't get before. They did get some, but it wasn't like it was before, as when the NBA first started in nineteen forty six, the highest player was Joe Fuchs of the Philadelphia Warriors, and he made only eight thousand dollars, which today would be roughly one hundred and fourteen thousand dollars. 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 the TV market. Ten years later, in nineteen fifty six, the highest paid contract was twenty five thousand dollars by Bob Coosey of the Boston Celtics, which today's value was roughly two hundred and eighty six thousand dollars. So you can see in a decade the league and sport had grown even more. Then you fast forward to this nineteen sixty six season. Just a decade later, Bill Russell NBA play and the first NBA player in the league to make over one hundred thousand dollars a year, and today that would average just under a million dollars a year at nine hundred and sixty nine thousand, and a decade later, Kareem aldu Jabbar is the highest played player in the league, making over six hundred and fifty thousand dollars a year, which today would be roughly three point five million dollars. And now is when we come closer to our story today about Magic Johnson. So in the nineteen seventy nine eighty 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 four hundred and sixty thousand dollars a year. Then, after two seasons with the LA Lakers, he was offered a new contract by the LA Lakers, who a year earlier gave Kareem out Jabbar a contract that averaged one million dollars per year, and that following year, Magic Johnson signed a contract for twenty five years. Magic was young, but the chances of him even playing for twenty five years was unlikely. But the reason why he was offered this contract it was twenty five years for twenty five million dollars. Easy, Matt there, it's one million dollars. And the reason was the owner of the Lakers, Jerry Buss, 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 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 Larry Bird, who's the biggest rival for Magic Johnson throughout his career and 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. 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. 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 nineteen eighty one to two thousand and six. 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 two point five million dollars in nineteen eighty four through nineteen eighty seven. And he that wasn't and that wasn't the only time he was the highest player in the league because in nineteen ninety four ninety five, he was also giving a fourteen million dollar contract to show support for all the times he did not get paid. This was after he retired due to HIV, and this was him returning to the Magic to play for half a season. But this was also a great time as it helped jump multiple other contracts, as in nineteen ninety four, the highest paid player made five was David Robinson and he made five point seven million dollars, and in nineteen ninety four Magic made fourteen point six million dollars and it never dropped below that, so it was a huge jump. It also included TV rights and everything like that. But it was great, great for the league and players as they were making more money being more the face of the league, being more of the face of the teams, and Magic really stuck to that. He's dabbled in other sporting events, owning part of the of the Dodgers, and you know, being rumored to own other things, but he's always been part of the Lakers. He's since he retired in nineteen ninety one due to HIV, he coached the Lakers. He's been an advisor to the Lakers. He returned to play for the Lakers in nineteen ninety four nineteen ninety five. 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, 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, you know, with the different races and extensions and all that. His twenty five years started in nineteen eighty four and went to the two thousand and nine twenty ten season, which is crazy because he retired officially in nineteen ninety five and still was making a million dollars every year after he retired from the Lakers til twenty ten, which included which when he played he won five NBA championships, and when he was retired, still on the salary gap, the team won five more NBA championships with Shaq and Kobe and Kobe and Pau Gasol. So in total, Magic was on the payroll for ten different NBA championships, getting close to Bill Russells eleven. Now this was a unique contract to try to get a player, which the contract eventually by twenty ten 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 twenty ten season. But it showed the forethought by Jerry Buss 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. 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 seen what role he would have with the Lakers, but they knew they wanted him around for life, and that's what they did. It's a unique contract, and there are many other unique contracts we'll go into later in future episodes. But it shows that sometimes it's not all about the money. At the time, twenty five million dollars was the largest contract in the NBA, not including per year value, but it was the longevity and the forethought 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. If you enjoyed this topic, please let a friend know. Hit that little share triangle 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. 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 ten, five as a player and five when he was retired.