Shaquille O'Neal has never had a cup of coffee—and it caused one of his biggest business mistakes

Shaquille O'Neal
Isaiah Trickey | FilmMagic | Getty Images

NBA hall-of-famer Shaquille O'Neal, has done a lot in his life — he won four NBA championships, three NBA final MVP awards and played for six different NBA teams over the course of almost two decades, and now he's a successful investor and businessman.

But one thing he's never done is drink coffee, and his lack of affinity for lattes caused him to make one of his biggest investments mistakes of his life.

"My biggest mistake was not investing in Starbucks," O'Neal tells CNBC Make It. "I had the opportunity before Magic Johnson but I told Howard Schultz that black people don't drink coffee because I never seen anyone in my family drink coffee," he says, referring to Starbucks' former CEO. (In his house, says O'Neal, it was always sweet tea or hot chocolate.)

Magic Johnson, who retired a year before O'Neal was drafted in the NBA in 1992, and returning only for a short stint in 1996, did form a partnership with Schultz in 1998. Johnson struck a deal with Schultz to develop a chain of more than 100 Starbucks locations in underserved communities in the U.S.

Johnson later said the partnership was game-changer and "really stamped [him] as serious businessman," during in an episode of "Kneading Dough" last year.

The deal was also fruitful for him: In 2010, after a 12-year partnership with the coffee chain, Johnson sold his 50% stake back to Starbucks in a deal that reportedly netted him an estimated $70 million.

O'Neal says it still stings every time, he sees a Starbucks.

But since then, O'Neal has built a sprawling business empire of restaurant franchises, fitness gyms, car washes and big partnerships with Papa John's and Carnival Cruise to name a few. In fact, post-NBA the hall-of-famer has been making more money through his investments each year than he did during his best year on the court.

He also says he made a big investment of his own in recent years, calling it his "best one" yet.

In 2015, O'Neal sold the rights to his future business endeavors (like merchandise and endorsements) to Authentic Brands Group (ABG) for an undisclosed amount. Under the deal, O'Neal became a business partner in the private company, which has a portfolio that includes more than 50 customer brands and as well as celebrity licenses, like those of Marilyn Monroe, Elvis Presley, Muhammad Ali and Michael Jackson.

ABG recently acquired Sports Illustrated for $110 million and O'Neal hinted that the group could be eyeing to buy Reebok next. As a former spokesperson of the brand, O'Neal says he would love to turn the sneaker brand around and bring it back to basketball — if Adidas, its owner, wanted to sell it.

But despite missing out on Starbucks and a few other missteps along the way, O"Neal says he always follows one simple rule when deciding whether to invest or or not, something he learned from the world's richest man, Jeff Bezos.

"When you are investing you need to think like a missionary. You want to help people. If you think like a mercenary and go in for the kill, it shows lack of mercy. So I started investing in things that is going to change people's lives and it is always a win."

As for why he doesn't need any coffee or caffeine to get him through the day, O'Neal says "energy has always been mental" for him.

"Energy for me has always been about tapping into your adrenaline," he says. "I conserve my energy [when I'm home] and only tap into it when its needed."

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