O’Neal’s Empire and Bottom Line Should Get Bigger

The Forum isn’t exactly Hollywood, but the move by basketball star Shaquille O’Neal to the Los Angeles Lakers, nonetheless, puts him near ground zero of the entertainment and product-endorsement rackets and can only help his off-court empire, marketing experts say.

“If Steven Spielberg wants to come down to the Laker locker room, you better believe that Shaq will be there with his arm extended . . . in friendship,” says Brian Murphy, publisher of Sports Marketing Letter of Westport, Conn.

If O’Neal’s health and image remain good and the Lakers win, the $120 million that the Lakers will pay him over seven years could prove to be small change compared with his income from movies, music and endorsements. Already, at an estimated $17-million-plus last year, he is second only to fellow hoopster Michael Jordan among athlete-entrepreneurs.

That’s because O’Neal, with his budding off-court ventures, embodies as well as any athlete the multimedia melding of sports and entertainment careers that so many sports figures and their agents shoot for. O’Neal has already appeared in movies, cut rap recordings and starred on the Internet.

Apart from his basketball achievements, O’Neal’s appeal to corporate America flows from a winning, approachable, “gentle giant” image and personality that has been described as part Bambi and part Terminator.

But if the upside is great, so is the potential downside. O’Neal’s huge salary--it works out to more than $17 million a year--brings with it high fan expectations and the risk of losing commercial appeal if the Lakers fail to win, said University of Oregon sports marketing expert Rick Burton.

“When people are almost forced to look at you, their expectations are raised,” Burton said. “And if the Lakers win, they will bask in the reflected glory. If they lose, people will probably distance themselves from him.”

Last year, O’Neal’s $17 million from entertainment and endorsement deals, as estimated by Forbes magazine, was nearly triple his $5.7-million salary from the Orlando Magic. Jordan of the Chicago Bulls raked in an estimated $30 million off the court in 1995.

In Los Angeles, the 7-foot-1-inch center enters the second-largest media market and the entertainment capital of the world. He has the opportunity to impress and pitch to a much wider circle of fans and consumers than in Orlando.

O’Neal’s box office appeal is now being tested. His second motion picture, “Kazaam,” in which he plays a genie, was released Wednesday. He is set to play the starring role in “Steel,” an action hero tale that begins shooting next month and that is based on a DC Comics character called John Henry Irons.

His asking price for movies is currently in the $4-million range. But if “Steel” is a hit, the ancillary revenues from toys, cartoons and the like based on Irons could be enormous. His screen debut, in “Blue Chips” with Nick Nolte, came in 1994.

O’Neal’s first rap compact disc, “Shaq Diesel” on the Jive label, sold more than 1 million copies, and his second, “Shaq Fu: Da Return,” sold more than 500,000, also on Jive. This fall, he will release a third rap CD, this one on his own label, Twism (for The World Is Mine).

Meanwhile, O’Neal has cut an impressive swath through the endorsement game, with contracts that include Pepsi, Taco Bell, Spalding, Reebok and Kenner toys. His shoe contract alone is thought to be worth $4 million a year. This fall, he will roll out his personal line of sportswear, also called Twism.

“He is extraordinarily marketable,” said Murphy of Sports Marketing Letter. “He has a personality, face, intelligence and ability to communicate, which makes him distinct among his peers.”

Sports marketing experts say O’Neal has been shrewdly managed by Santa Monica sports agent and attorney Leonard Armato, who signed him four years ago after O’Neal was drafted by the Magic.

Armato steered O’Neal to companies like Pepsi and Reebok, where he could be the leading star on the marketing roster. Armato also got the companies to work together on cross-marketing deals involving O’Neal. Thus, Shaq, as his “Kazaam” movie character, has turned up in Reebok and Taco Bell commercials and on Mr. Big candy bar wrapping.

Armato explained, in marketing-speak: “Our overall marketing strategy was to settle on an image which represents the essence of what Shaq is and make sure the creative exploitations of that image are unified.”

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In-GENIE-ous Ventures

Last year, Shaquille O’Neal made an estimated $17 million from his off-court entertainment and endorsement deals, nearly three times his $5.7-million salary from the Orlando Magic. If his health remains good, his image stays clean and the Lakers win, business can only improve.

Movies: “Blue Chips” (1994); “Kazaam” 1996; “Steel” (to begin shooting next month; scheduled for a 1997 release).

Music: Two rap albums: “Shaq Diesel,” which sold more than 1 million copies, and “Shaq Fu: Da Return,” both on the Jive label. This fall, he will release a rap CD on his own label, Twism, which stands for The World Is Mine.

Apparel: Reebok shoes and Shaq Attaq line of apparel; his Twism clothing line will roll out a casual sportswear line in department and specialty stores in September.

Food: Pepsi soft drinks and PepsiCo-owned restaurants Taco Bell, KFC and Pizza Hut; Mr. Big candy bar and Shaq Bar energy bar sold through Amway distributors.

Television: Host of “Nickelodeon Sports Theater,” a children’s cable TV show.

Restaurants: All Star Cafe, a restaurant chain that is a subsidiary of Planet Hollywood, now open in Cancun, Mexico, and New York City; also a partner in Shaq’s Place, an entertainment nightclub at Universal Studios, Orlando, Fla.

Sporting goods: Spalding basketballs and backboards.

Toys and collectibles: Kenner Toys has rights to license his action figure; Score Board Inc. markets his autographed memorabilia and trading cards.

Electronics: Sportsline USA has an Internet World Wide Web site called Shaq World; Tiger Electronics sells O’Neal’s hand-held game line.

Earnings: O’Neal is No. 5 in Forbe’s 1995 list of top-earning athletes. The four above him: Michael Jordan, Mike Tyson, Deion Sanders and Riddick Bowe.