The more up to date figure is closer to $450 million, but who’s counting? This article is about two sets of equally important facts to consider when looking how Shaquille O’Neal managed to accumulate a net worth in excess of $400 million.
The first set of facts are what are known as the financials. A sizeable chunk of his money was made playing in the NBA, but no for a single team. He was shopped around the league after he was initially signed by the Orlando Magic in 1992 for $3 million. By the 1995 season that figure had jumped to $5.7 million. So the start of his NBA career did not have a significant impact on his current net worth.
At the end of his forth professional year, O’Neal became a free agent and was thrown what was then largest contract available to a player by the Los Angeles Lakers – $120 million over a 7 year commitment, with the option to move on after playing 3 years for the Lakers. The Magic were unable to match the Tinsel Town offer, and not only did O’Neal join the Lakers but added a completely different benefit: the ability to get noticed by millions of faithful Laker fans and the media exposure that would follow. In 1995, the idea of brand was limited to a very small number of players; Michael Jordan, for example. By the time O’Neal would retire the importance of sports branding was enormous both professionally and financially.
After fulfilling his 7 year deal with the Lakers, internal feuds with teammate Kobe Bryant would result in O’Neal moving to the Miami Heat, signing a 3 year deal for $67 million. He would go on to play for the Phoenix Suns and the Cleveland Cavaliers for roughly the same $20 million a year over the next 3 seasons, giving him a grand total NBA salary of $292,198,327 for his career.
That total accounts for about 75% of his total net worth.
After leaving the NBA he focused on marketing affordable clothing and jewelry under his unique brand name. Among the most popular items were his shoes, which can be had for a retail price of less than $20, that thus far have sold more than 100 million pairs. He also has a jewelry collection that is available at moderately priced Zales that range between $100 and $300 per piece.
The idea behind the value of a Shaquille O’Neal brand was not recognized earlier, but now he has realized its complete value and has made a move to maximize its contribution to his total net worth. That move came in reaching a deal with the Authentic Brands Group, giving them the exclusive rights to manage his brand for the rest of his life. The estimates of the value of that deal rocketed his total net worth by a minimum of $230 million.
That is how the estimated current net worth of Shaquille O’Neal is arrived at for this article.
This last revenue generator of branding is essential to understanding how O’Neal was able to dramatically raise his net worth after his playing career ended. Being talented helps, but even if you are an average player with a marketable brand you can amass a considerable net worth. For example, tennis player Kei Nishikori of Japan only made $3.9 million on the tennis circuit but added $39.3 million to his value based on endorsements. The current estimate of his net worth is $46 million.
Presuming O’Neal was taxed on a hefty portion of his NBA earnings in his early years, then got himself a quality tax accountant and investment counsel, and spent some of what was left over on enjoying a millionaire lifestyle, it is safe to say that the majority of his current net worth was achieved by maintain his brand throughout his playing career and afterwards. His playing career, meaning the actual time he had to work to earn a living, netted him less than one-third of his current net worth – at best. The rest came from what is called today “passive income.” The essential idea behind passive income is to let someone else do the hard work of selling and you reap the financial benefits.
This is not a criticism of the way Shaquille O’Neal or anyone else has amassed a considerable fortune. What it is should be a lesson to everyone who aspires to have a hefty sum available after they are tired of working. Find a way to establish a personal or business brand and start to accumulate passive income from that brand sooner than later. You will not likely find O’Neal’s name being gossiped about on social media or elsewhere for losing all the money he had made as a professional basketball player now or in the future. We can be amazed at his net worth, but we can use his methodology and start working to duplicate his success.