Shaquille O’Neal has made millions on basketball, restaurants and early investments in technology companies. But one of his biggest business regrets involves a company he could have partnered with decades ago — Starbucks. Before Magic Johnson turned Starbucks locations in underserved communities into a major business venture, O’Neal had an opportunity to work with the coffee giant’s former CEO, Howard Schultz. He passed, convinced the idea wouldn’t work for a reason that had everything to do with what he grew up seeing at home. : Kevin O’ Leary calls this ‘the best side hustle there is’ for turning $0 into $10,000 in 30 days The NBA legend wasn’t sold on coffee O’Neal recalled Schultz approaching him about opening Starbucks franchises in African-American communities, he said on “In Depth with Graham Bensinger” in 2015. “So Howard comes and says, ‘Shaq, I wanna give you the opportunity to go in with me and open up these Starbucks franchises in African American communities,’” O’Neal said during the interview. He explained that he wouldn’t endorse a product unless he believed in it. Then came the response that would follow him for years. “So I looked in the great Howard Schultz’s face and said, ‘Black people don’t drink coffee, sir. I don’t think it’s gonna work,’” O’Neal recalled. Schultz was taken aback, but the two remained friends. O’Neal later acknowledged the decision was one of his worst business mistakes. The story wasn’t new. In his 2011 autobiography, “Shaq Uncut,” O’Neal also described the meeting and explained why he dismissed the opportunity. “The truth was,” he wrote, “I’d never seen black people drink coffee. I thought it was a white person’s drink. Years later, O’Neal was even more direct about what the missed opportunity meant financially. More Restaurants: 52-year-old international restaurant chain closing all locations 46-year-old casual dining chain closes underperforming locations Classic burger chain has closed down all its restaurants “My biggest mistake was not investing in Starbucks,” O’Neal told CNBC Make It in 2019. He explained that the opportunity came before Magic Johnson’s partnership with Schultz. O’Neal said his thinking was based on his own household, where coffee wasn’t a regular drink. Sweet tea and hot chocolate were more familiar. Shaq wasn’t passionate about Starbucks, but he owned many franchises, including Auntie Anne’s, Papa John’s, Five Guys, and more. Paras Griffin / Getty Images Magic Johnson saw the opportunity Shaq missed Johnson moved forward with Starbucks in 1998, forming a partnership with Schultz to develop more than 100 locations in underserved communities across the U.S, CNBC Make It reported in 2018. The venture, called Urban Coffee Opportunities, helped expand Starbucks into neighborhoods that had been overlooked by traditional retail development. Starbucks eventually bought out Johnson’s interest in 2010. Reports put the value of the transaction at approximately $75 million, although the exact financial terms weren’t publicly disclosed. Johnson later described the partnership as a turning point in his business career. During an episode of the series Kneading Dough, he said the deal helped establish him as a serious businessman. For O’Neal, the comparison was difficult to ignore. He had the opportunity before Johnson but walked away because he couldn’t picture the product succeeding among customers whose habits he hadn’t fully understood. Shaq found plenty of other investments Passing on Starbucks didn’t keep O’Neal from building a substantial business portfolio. He invested in Google during its early days and later described wishing he had invested more. He also became an investor in Ring after trying its home security cameras himself. Amazon acquired Ring in 2018 for more than $1 billion. O’Neal has also built a sizable presence in franchising. His past business interests have included Five Guys, Auntie Anne’s, Krispy Kreme and 24 Hour Fitness. In 2018, he co-founded Big Chicken, a fast-casual restaurant brand inspired by his mother’s cooking. He also operates nine Papa John’s locations in the Atlanta area through a joint venture. His business interests extend into licensing and brand partnerships as well. O’Neal has held equity in Authentic Brands Group, which manages his name and likeness, and has taken on a leadership role with Reebok Basketball. The $500 million fortune and one costly assumption O’Neal’s estimated net worth is approximately $500 million, according to Celebrity Net Worth. His fortune reflects more than his NBA earnings, which totaled roughly $292 million in playing salaries. Endorsements, licensing, real estate and business investments have also contributed. The Starbucks story offers a different kind of investing lesson than his successful bets on Google and Ring. O’Neal has often relied on personal experience when evaluating businesses. That approach helped him recognize products he liked and understood, but it also led him to dismiss an opportunity because his own household didn’t drink coffee. Johnson’s success showed what could happen when the idea was tested against a broader customer base. For someone who built a fortune by recognizing opportunities outside basketball, Starbucks remains a reminder that sometimes the biggest mistake isn’t making a bad investment. It’s passing on one before giving the idea a chance. Related: :
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