Shaquille O’Neal, the NBA legend who has successfully transitioned into a business mogul, has shared a crucial piece of advice with Luka Dončić, a rising star in the league. This advice, which O’Neal himself received from Magic Johnson, centers around the importance of financial prudence and investment. Johnson had once advised O’Neal to start owning assets, a lesson that O’Neal is now passing on to Dončić as the young Mavericks star stands on the brink of securing an extraordinarily lucrative contract that could surpass $100 million annually.
The context for this advice comes amid a changing landscape in the NBA, where recent broadcasting deals with major networks like NBC Sports, ESPN, and Amazon are driving up player salaries. As contracts become more substantial, players are faced with the challenge of managing their finances wisely to avoid common pitfalls. O’Neal’s guidance is particularly pertinent given that a significant number of athletes face financial difficulties shortly after retirement. Studies show that between 65% and 70% of athletes are financially strained just 3-4 years after their careers end. O’Neal’s own experiences with his stepfather, Philip Harrison—a former drill sergeant who instilled in him the discipline to avoid negative influences and manage his finances—have shaped his approach to wealth management.
On a recent appearance on “The Pat McAfee Show,” O’Neal recommended that Dončić consider deferring a large portion of his salary to protect his financial future. Specifically, O’Neal suggested that Dončić request a smaller portion of his earnings upfront, such as $20 million, and defer the remaining $80 million to a time after his playing career. This strategy, O’Neal explained, would account for the reduction in value due to taxes and the potential financial mismanagement common among athletes who suddenly come into significant wealth.
O’Neal’s advice reflects a broader concern about financial literacy among young NBA players, who may not always fully grasp the long-term implications of their earnings. As O’Neal pointed out, the NBA’s recent contract structure and media rights deals are creating unprecedented salary expectations, and players like Dončić are expected to handle substantial sums of money. O’Neal’s own experience underscores the importance of being cautious and strategic with such wealth, advising Dončić to consider long-term investment strategies rather than immediate consumption.
Looking at Dončić’s current contract situation, he is under a five-year, $215.2 million agreement with the Dallas Mavericks, entering the third year of his rookie extension. The Mavericks are likely to offer him a maximum extension when the opportunity arises, especially given his impressive performance statistics, including an average of 33.9 points, 9.2 rebounds, and 9.8 assists per game last season. Dončić’s potential future earnings are significant, with projections suggesting that his salary could reach as high as $78.8 million by 2031, depending on cap increases and annual raises. With continued growth in his performance and the league’s financial landscape, his next contract could exceed $500 million, making O’Neal’s advice even more relevant.
In summary, Shaquille O’Neal’s advice to Luka Dončić highlights the critical need for young athletes to manage their finances wisely as they approach potentially groundbreaking contracts. O’Neal’s own journey through financial management and investment serves as a valuable guide for Dončić and other players facing similar opportunities. The emphasis on deferring a substantial portion of earnings and focusing on long-term financial security underscores the importance of strategic planning in the face of lucrative but potentially fleeting careers in professional sports.
