How did Lakers legend, Magic Johnson miss out on a $5 billion contract with Nike?

When Magic Johnson joined the NBA in 1979 after his victory over Larry Bird in the national student finals, he received sponsorship offers from three brands: Converse, Adidas, and Nike.

Like Magic itself, Nike was just a new face at that time and could not convince the Lakers' talent. The defender nods to Converse, a decision that's not so financially stellar in the long run.

"Converse offered me the most money," Johnson said on the "All the Smoke" podcast. "You know, when you grow up in poverty, you get real cash, the more cash the better."

"[Nike co-founder] Phil Knight walked in and said, 'Hey, I can't make the same offer in terms of cash, but I can offer stock'.

"I don't know anything about it," the Lakers legend confided. "My family didn't understand the financial background. That's what sometimes hurts us to this day."

"I skipped that stock. Now, when I recalculate, the number Phil suggested could be $4 billion to $5 billion. 45 years have passed since that day."

Magic earned just $40 million in salary as a player, and has since added hundreds of millions more in the business world since retiring in 1991.

In other words, the Lakers legend could have made more than five times his current net worth in purely passive income if he nodded in Nike stock.

It's easy to see why Johnson didn't take the deal with Nike at the time. That is a gamble. No one knew that Nike would become the money printer it is today. And at the age of 20, Magic simply didn't have the necessary financial literacy.

Michael Jordan also received an unconventional offer to Nike as a rookie in 1984, when he received a commission on the sales of shoes bearing his name.

Nike had to get creative with its offers to compete with the older company. The creation of Phil Knight and his partner has created an empire - along with regret for Magic Johnson.