Shaq Says Seeing 50 People in Elvis Shirts Made Him Ask, ‘How the Hell Is He Still Making Money?’ Then He Invested in the Company That Owns Elvis

Near the end of his playing career, Shaq took a walk down Hollywood Boulevard and came back with a business plan. "I seen about 50 people walk around in Elvis shirts. So, now I get pissed off,” he told an audience at the Milken Institute Global Conference in May. “I'm like, ‘Elvis has been passed away for a long time. How the hell is he still making money?’” The question, he said, “made me do my research,” and the research changed how he gets paid.

Underneath the joke was a fear he has talked about for years. “For the NBA, five years after retirement, 70% of athletes have nothing. No income coming in,” he said on the same stage, sitting beside Tom Brady. The most commonly cited source of this number is a 2009 Sports Illustrated estimate that 60% of former NBA players were broke within five years of retiring. The number has been disputed, but the overall concept isn't unheard of: There have been multiple accounts of homeless NFL and NBA players, lottery winners who spend it all, and many other initially well-off individuals who go broke. Shaq's future focus comes from the instruction his late father drilled into him: “He said, 'Don't lose your mother's house.'” It is the same instinct Charlie Munger described when he told young people to secure the first $100,000 before anything else: protect the base, then take the swings.

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The research led him to Jamie Salter, the founder of Authentic Brands Group, the licensing company that buys the names of famous people and brands and rents them out. “I told him I said, 'Jamie, I want to live forever,'” Shaq said. The result was a restructuring of his income. “My business was 100% endorsements. Now it's 50% endorsement, 50% licensing.” The difference matters. An endorsement pays him to promote somebody else's product and ends when the contract does. A license puts his name on a product and pays a royalty on every unit sold, whether or not he ever shows up.

Then he did something the licensing deal did not require. “I told Jamie I said, 'Jamie, I'm rich. You going to write me a lot of checks. I want to invest this check in your company cuz I want to be part of a winning team.' And Jamie accepted,” he said. “I think it was one of the best decisions of my life, and it all stems from me not losing my mother's house.” In other words, the company that pays him licensing income is a company he owns a piece of, and the checks it writes him went back into it. In an August Boardroom interview, Salter described Shaq as the second-largest individual investor in Authentic Brands after Salter himself. 

That is where the Elvis shirts come back. Authentic Brands bought a majority stake in Elvis Presley Enterprises in 2013, taking control of the licensing of Presley's name and likeness. The same company owns or controls the Reebok, Champion, Marilyn Monroe, Muhammad Ali, and Sports Illustrated brands, among dozens of others, and Salter has put its annual retail sales at roughly $42 billion. So the man who got annoyed that a singer who has been dead since 1977 was still collecting on T-shirts went and bought into the company collecting on them. In 2015, reports at the time said Authentic Brands also acquired a majority interest in Shaq's name-and-likeness rights, which is the structural reason his income is now half licensing.

The Milken appearance also produced a line to his sons that has already made the rounds and that Barchart has covered before: he is rich, they are not, and the money is not being handed down. The Elvis story is the quieter half of the same philosophy. It is less about what he spends and more about where the money comes from when he is not working, which is the thing the 70% figure, however shaky, is really about.

Americans' fascination with celebrity wealth usually fixes on the spending: the cars, the houses, and the White Castle runs. Shaq's answer to his own question on Hollywood Boulevard was duller and more durable than any of that. A dead man still gets paid because somebody owns the brand. In 2015, he decided to be that somebody.

On the date of publication, Caleb Naysmith did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.