Shaquille O’Neal still remembers the sting of his first Los Angeles Lakers season, when a headline contract quickly shrank, leaving him stunned by how $20 million in earnings became far less once California taxes and fees took their share.
Joining the Lakers in 1996 was a defining career move for the NBA ace, who signed a seven year, $120 million deal, at the time among the richest in NBA history, and expected financial security to follow instantly.
Instead, the reality of playing in California hit fast, as state taxes, entertainment levies, and federal deductions carved deep into his earnings, quickly turning a dream salary into a sobering financial lesson.
“So, my first year with the Lakers, I made $20 million,” Shaq told Jade Flury. “And I thought I was netting $20 million, but when I got the check, it was 10.9.”
“Yeah, 10.9 California, half of it gone. So then I had to pay entertainment tax, that was like another $4 million.
“So I probably only netted, probably I want to say $7 to $8 million out of the 20.”
That meant roughly $13 million disappeared in taxes alone, a harsh introduction to the financial realities of stardom, especially for athletes earning their income in high tax states.
California’s tax structure remains one of the toughest in the country, with a top rate of 13.3 percent, a figure that continues to influence where players prefer to sign contracts.
When federal taxes, agent fees, and so called jock taxes across road games are added, elite NBA players can see nearly half of their salaries vanish before reaching their bank accounts.
For O’Neal, the experience reshaped how he viewed money, contracts, and long term planning, transforming early frustration into a foundation for financial education.
“That money is easy to disappear,” Shaq added. “You have to teach yourself about business. Teach yourself about investing. Teach yourself how to save.”
How O’Neal transformed his financial situation around
The shock of losing millions in his first Lakers season pushed O’Neal to rethink how athletes handle money, realizing that earning power alone means little without education and discipline.
Over time, he became deeply involved in learning business fundamentals, studying ownership models, franchising, and long term investing, rather than relying only on endorsement checks.
This shift allowed Shaq to view his NBA salary as seed capital, not spending money, an approach that helped him build wealth long after his playing days ended.
His openness about financial mistakes also made him a cautionary voice for younger players, warning them that headline contracts rarely reflect what actually lands in their accounts.
Away from finances, O’Neal has also shown a willingness to be candid about personal growth, including changes in his outlook on relationships and life priorities.
“I think a lot of people put the word ‘qualities’ on it. Just want her to be nice. Okay, personality, that’s what matters. Just nice,” Shaq explained.
Born in Newark in 1972, O’Neal rose through discipline and talent, dominating at LSU before a legendary NBA career that included four championships and lasting cultural impact.
Today, Shaq‘s story blends success with caution, proving that even generational wealth can feel fragile, and that the $13 million lesson from Los Angeles still shapes how he sees money.
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