Magic Johnson's 25-Year, $25 Million Deal

A rookie who won it all

Earvin "Magic" Johnson arrived in Los Angeles as the top pick in 1979, a 6 foot 9 point guard with a huge smile and no-look passes. In his rookie season he started at center in the clinching game of the 1980 Finals with Kareem Abdul-Jabbar out injured, scored 42 points and was named Finals MVP. He was 20 years old.

Before all that, Magic grew up in Lansing, Michigan, where a local sportswriter gave him the nickname after a high school game. He won a college title at Michigan State in 1979, beating Larry Bird's Indiana State, just before turning pro.

One million a year for 25 years

In 1981 Lakers owner Jerry Buss rewarded him with a contract unlike anything in sports: 25 years for 25 million dollars, roughly a million a year. At the time it was described as the longest contract in professional sports. Buss saw Magic as a partner as much as a player, and the deal was designed to keep him tied to the franchise long after his playing days.

The deal caused friction. Some teammates, including Kareem, were reportedly unhappy that a second-year player had locked in that kind of security. Magic answered with titles.

Showtime pays off

Magic won five championships with the Lakers, three regular season MVP awards and three Finals MVPs. His rivalry with Larry Bird helped lift the league out of a slump and onto prime time television.

In November 1991 he shocked the world by announcing he was HIV positive and retiring. He still played in the 1992 All-Star Game and won gold with the Dream Team.

The business second act

Magic studied Buss up close and used those lessons to build Magic Johnson Enterprises, investing in movie theaters, restaurants and services in neighborhoods many big companies ignored. He later joined ownership groups that bought the Los Angeles Dodgers in 2012 and the Washington Commanders in 2023, along with stakes in other teams.

The 25-year contract made headlines. What he did after the game made him a model for every athlete who wants to own, not just earn.

He has also partnered with big brands on projects that brought coffee shops and fitness clubs to underserved communities, and he became one of the most sought-after voices in sports business.

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