Abdul-Jabbar Learns a New Game : Laker Superstar, Partners Moving Into Hotel Business

Instead of reserving court-side seats to see Kareem Abdul-Jabbar, fans of the Lakers’ superstar center soon may have to reserve pool-side rooms--at one of his hotels.

With his expected retirement just two seasons off, Abdul-Jabbar--and a contingent of six current and former professional basketball players from outside Los Angeles--is negotiating to purchase the Inn of Laguna for about $4 million and recently purchased the Balboa Inn for $4.2 million.

The group also has bought a 13-story hotel in Birmingham, Ala., for $1 million, and is revamping a splashy $1.4-million restaurant in Newport Beach and building a sprawling, $22-million health club in Los Angeles.

Estimated $2 Million a Year

Abdul-Jabbar, believed to be among the world’s highest-paid professional athletes at an estimated $2 million per season, owns about 20% of each of the group’s investments. Although fans have long marveled at Abdul-Jabbar’s proficiency on the court, few are familiar with where he has invested his basketball earnings. And there has been speculation recently that financial need has fueled the 38-year-old Abdul-Jabbar’s decision to play another season or two.

That, however, does not appear to be the case. In a recent pre-practice interview at the offices of his agent, Thomas M. Collins, the reflective athlete-turning-businessman openly discussed many of his investments. To date, they total at least $7.5 million. And more are on the way, Collins said.

Among them, Abdul-Jabbar seemed most proud of a record company he plans to create within the next month. He would be president and sole owner.

Abdul-Jabbar, a longtime jazz enthusiast, said the company, Skyline Records, already is negotiating with MCA Records Inc. for distribution rights. Abdul-Jabbar said Skyline not only will introduce new jazz artists but also will reissue old recordings.

It has become increasingly common, agents and business managers say, for athletes like Abdul-Jabbar and his basketball associates to personally follow their finances.

“As horror stories about bad investments have permeated the sports industry, athletes are taking a much greater degree of caution,” said Carl Schiefer, president of the Schiefer Agency, a Laguna Hills sports marketing company that represents a number of athletes, including Angels pitcher Don Sutton and three members of the Houston Astros baseball team.

Despite all his honors and accomplishments, Abdul-Jabbar--a six-time NBA Most Valuable Player and 15-time All Star in his 17 years in the league--said he still struggles with decisions on investing his money. “But in the end,” he said, “you’ve gotta trust someone.”

That someone is Collins, the driving force behind Abdul-Jabbar’s recent spurt of investments in hotels and other properties. “You only get so many chances to make good investments,” said Abdul-Jabbar. “How many beach properties do you find available on the California coast?” The Balboa Inn is the only beachfront hotel in Newport Beach.

With his days in the NBA numbered, Abdul-Jabbar, who has played in the league longer than any other player, said he is “sharply defining” his financial goals. “Not only am I paying a lot closer attention to my finances, but I’ve tried to assume a lot more control over investment decisions,” Abdul-Jabbar said.

Abdul-Jabbar, who is a Muslim, readily admits that some religious-related investments that he made in the late 1970s “were like something out of Amos ‘n’ Andy.” He would not detail those investments.

Also, the jury is still out on an exercise product, “All-Pro Heavyrope,”--a $30, weighted jump rope--that All-Pro Enterprises Inc. introduced last year. Not only does Abdul-Jabbar endorse the product, but he is an investor in the company, which is owned by Collins. Abdul-Jabbar has at least one other major personal investment--he owns a half-dozen Arabian horses, primarily used for breeding, that are valued at more than $200,000 each.

But Abdul-Jabbar’s largest investments are through the investment group managed by Collins. Recently, as key properties have become available, the rate of these investments has accelerated.

Offers Pending

“We’re very interested in commercial property on the Balboa Peninsula,” said Collins, who has been Abdul-Jabbar’s agent and business manager for nine years. “We have some other offers pending in that area,” he said, declining to be more specific.

In addition to Abdul-Jabbar, other members of the investment group include Ralph Sampson of the Houston Rockets, Terry Cummings of the Milwaukee Bucks, Alex English of the Denver Nuggets and Brad Davis of the Dallas Mavericks. Former Laker Charlie Scott and Rudy Hackett, who plays professional basketball in Italy, also are in the group, as are Collins; Danny Cox, a Tustin management consultant, and Joni Eareckson, a Los Angeles Christian recording artist.

The group’s largest ongoing project is the conversion of an empty building on Santa Monica Boulevard near Sepulveda into a 100,000-square-foot health club. The membership club, scheduled to open in December, 1986, will be called Sports Club L.A. It is a joint venture of Abdul-Jabbar’s group, Sports Connection health club chain owner Michael Talla of Los Angeles and Brookside Savings & Loan Assn. of Pasadena.

Besides exercise equipment, the club will offer members a restaurant, an auto detailing service and a child-care center with closed-circuit television so parents can watch their children being attended.

The investment group also has purchased the Baer’s Lair restaurant in Newport Beach for $1 million. A $400,000 renovation is under way, and the restaurant is scheduled to reopen under a new name before the end of the year.

But the focus of the group’s investments appears to be older hotels, those already certified by government agencies as historical landmarks. Investors who improve such structures can qualify for special tax breaks, said George G. Short, an attorney for the investment group.

Interested in Architecture

There also are personal reasons for the hotel investments. “I’ve always been interested in architecture,” said Abdul-Jabbar, who was raised in New York. He said he used to marvel at Manhattan landmarks like the Chrysler Building and the Empire State Building.

At the Balboa Inn, which was purchased in April and is scheduled to reopen in December, the investment group has pumped nearly $2 million into renovations of the Spanish colonial revival building. The finer suites at the beachfront hotel will include fireplaces, concierge service and even bath robes hanging in the closets--and will cost $280 nightly, Collins said.

The group also is spending nearly $5 million to renovate the 60-year-old Redmont Hotel in Birmingham and plans to double the size of the 30-year-old Inn of Laguna from the current 37 rooms to 74.

As owners, the basketball stars plan to be occasional guests at their hotels. But because of their unusual heights--Abdul-Jabbar and Sampson both are over 7 feet tall--some of the rooms are being specially modified into “Owners Suites” with larger doors, taller ceilings and even extra-long beds.

The group has retained Griswold’s, a Costa Mesa management company, to manage some of its hotels. Griswold’s now operates the 260-room Griswold’s Hotel in Fullerton and the 280-room Hotel Claremont.

The investment group also has interests in oil and gas leasing and drilling in Texas and, said Collins, also is talking with Ford Motor Co. about opening some auto dealerships.

But the bread and butter behind these investments is basketball. And when the World Champion Lakers open their 1985-86 season Saturday night in San Antonio against the Spurs, Abdul-Jabbar said, he will concentrate on basketball. Two years from now, however, “I expect to have an office at my record company,” Abdul-Jabbar said. “But I probably won’t wear a tie to work.”