The Man Behind Brand Shaq
At 2 a.m. on July 18, the Shaq Inc. brain trust was settling into a ninth-floor suite in Atlanta's Westin Peachtree Plaza. Unofficial chairman of this two-man marketing powerhouse, basketball superstar Shaquille O'Neal, was making his way up from the Olympic Village. Working the phones between Orlando and Los Angeles, Leonard Armato, O'Neal's agent, was doing what he does best: stoking the earning potential of the most famous 7-footer in America.
By 2:30 a.m., the 24-year-old O'Neal was undoubtedly among the wealthiest as well. A six-day bidding war between the Orlando Magic and Los Angeles Lakers had won O'Neal a seven-year deal with the Lakers worth an estimated $120 million. For Armato, a low-key, Brooklyn-born lawyer, it's just the latest piece of a marketing blitz designed to make his backboard-smashing client the most ubiquitous brand name in sports.
From the moment O'Neal joined the National Basketball Assn. as its top draft choice in 1992, Armato has promoted the quiet giant like a shiny new car model. In all, Shaq will earn a staggering $20 million this year by pumping products for the likes of PepsiCo, Reebok International, Neilson Cadbury, and Spalding. But Shaq Inc. is far more than a typical sports promo machine. Indeed, you can catch the 300-pounder on his rap label, interactive game, Web site, or in his two movies. "It's multimedia marketing of a brand that happens to be Shaquille O'Neal," says Armato. "Walt Disney started with a mouse and created an entertainment empire. We're starting with one of the world's great basketball players."
GROUND RULES. Armato drives tough deals. Even before O'Neal played his first pro game, the agent won him a lucrative Reebok International Ltd. contract by pitting Reebok against rival Nike Inc. And to be a part of Team Shaq, companies have to play by Armato's rules. That means using the O'Neal-trademarked logo on Shaq products, paying Shaq a royalty, and cross-promoting him. In concert with Disney's July 17 release of Kazaam, in which O'Neal plays a genie, Neilson Cadbury put a picture of him in costume on a Mr. Big candy bar, PepsiCo's Taco Bell unit offered Kazaam products with kids meals, and Reebok launched a Kazaam sneaker line. Such deals have made Armato a star sports agent, even though he only represents a handful of clients. O'Neal alone keeps him busy. On top of collecting his fee for negotiating deals, he is executive producer of Kazaam and runs Shaq's TWIsM record label.
GOOD TIMING. Armato, a onetime guard who averaged 12.8 points a game on the University of the Pacific hoop team, got his start working with sports companies as an outside lawyer for apparel maker Fila Sport and sneaker company L.A. Gear Inc. in the mid-'80s. He helped guide Laker great Kareem Abdul-Jabbar out of near-bankruptcy in 1987, partially by signing him to a sneaker deal with L.A. Gear. Armato also showed a knack for timing: He signed O'Neal's college coach, Louisiana State University's Dale Brown, to an L.A. Gear contract shortly before Brown introduced him to Shaq.
Armato's negotiating tactics are hard-edged. A few years back, he had client Brian Shaw jilt the Boston Celtics and play a season in Italy, only to return to the Celtics the following year for a hefty salary hike. But some of Armato's deals haven't panned out as well for the companies involved. A "Shaq Attack" clothing line that Armato pressured Reebok to launch, for instance, hasn't sold particularly well, says Reebok Executive Vice-President Tom Carmody.
Still, O'Neal does sell sneakers. So Carmody will be among the executives who trek to Los Angeles in September when Armato convenes his annual "Shaq summit" of O'Neal marketing partners. Armato is already preparing Shaq's next film, a joint venture with producer Quincy Jones based on the DC Comics character Steel. A rap clothing line is also coming. "When you take a star of Shaq's magnitude and bring him to Los Angeles, the possibilities are endless," says Magic Johnson's agent, Lon Rosen.
What next? A Shaq TV show? Or Saturday morning cartoon? Armato isn't saying. But once Shaq hits the world's entertainment capital, expect the slam-dunk deals to proliferate.