the summer before i entered college, magic johnson signed a 25 year $25 million contract. i was livid and surprised. no one had ever made that kind of money in the nba. my thought was that no one who plays basketball should make that kind of money. and magic johnson was (and still is) one of my favorite players.
that was the moment the nba solidified itself as a business first and a sport second.
back in 1981, there were no salary caps, contract rules to sign a player. dr jerry buss, the owner, of the lakers was an astute businessman. he gambled on magic’s playing ability and personality. buss thought that magic would bring back much more than 25 million dollars in 25 years. in other words, it would be profitable to lock magic up with the lakers for that amount. dr buss was right and his investment paid off for himself and the lakers.
from 1981 to 2020, the revenue steams for the nba has evolved as well. player salaries are tied to the revenue that comes in. the terms are very complicated– full time lawyers make a good living breaking down the current contracts!
yesterday, giannis antetokounmpo (aka the greek freak) signed a five year $228 million contract with the milwaukee bucks. i cheered when i heard it! the greek freak signed a “super max” level contract– very few players qualify for this kind of money. imagine: $228 million for five years! we cannot even imagine how that translates into one’s personal life.
i heard a reporter ask a player one day if he was worth his significant, newly signed contract. he responded, “it is not how much you’re worth, it’s how much you can negotiate.” he nailed it perfectly.
the nba has had an effective union for decades. the union’s negotiations over the years has kept up with the financial changes in the league. as the nba flourished, the players flourished financially. as with all for-profit businesses, management wants to keep as much money as possible for their side. in the nba, player’s salaries are about 53% of the nba revenue. money is driven my the market: the players make more because the league is making more.
in the private sector, where ever management can keep out collective bargaining from employees, business will use their advantage and leverage to keep salaries as low as possible– even against the law
that is why comparisons of nba players salaries to teachers and nurses fall short. revenue stream and union effectiveness are totally different. why do people cheer when tom cruise signs a $20 million deal to make a movie and then bemoan athletes like giannis?
the nba is a sport but is run primarily an entertainment business.
why do so many blue collar and service workers struggle financially? one main reason is that without a union, they have no collective bargaining power to have greater financial compensation for their work in the private sector. “union” can turn into a dirty word mostly because of slick marketing campaigns and fear tactics by management. companies would make less money for themselves if their employees made more money.
each person is made in the image and likeness of God and has inherent dignity –it’s not what you’re (financially) worth. in the private sector, people earn what they can negotiate. and for those business without unions, they usually get exploited financially. people who cannot even negotiate can only take what is given to them in salary or hourly wage.
benefits are a related area of compensation.
until we get more union representation, blue collar and service workers at big companies like amazon and walmart will continue to receive less than they ought.
for anyone who strives for systematic change, just pay is an essential area in terms of the dignity of both work and workers. in catholic social teaching, these are areas justice and love.
until then, i will cheer the greek freak on the basketball court and marvel the strength of a union that enables one to make over $45 million a year to dribble and shoot a round ball into a metal hoop.
Obviously, I’m out of the MBA loop because I’ve not heard of this greek freak! But if you say he’s worth his $228 million contract, I’ll believe you! What’s interesting these days is, will Giannis Antetokounmpo ever become a household name like Magic Johnson? Sports and entertainment have become so saturated, it’s difficult for a real “star” to emerge.
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good question. yes, conditions because of the internet are different today than in jordan’s time. but… lebron and kobe bryant’s popularity is global because of the internet. but since jordan dominated the 90s without equal, his legacy is set