Johnson, Robert L.

views updated

Johnson, Robert L.

(1946-)
Black Entertainment Television

Overview

Robert L. Johnson established the first and only firm that provides basic cable television programming by and about blacks. The founder, chairman, and chief executive officer of Black Entertainment Television, he took BET to the stock market in 1991, making it the first black owned firm to join the New York Stock Exchange. The BET Network created a new genre in television, with 24–hour programming targeted to African–American consumers that reach 90 percent of all black households with cable and air in 65 million homes in the country. Johnson is also the founder, chairman, and CEO of BET Holdings II, Inc., now a division of Viacom, and the first African–American owned and operated media and entertainment company created specifically for African–American interests. BET is made up of Black Entertainment Television; BET On Jazz: The Jazz Channel, the only 24–hour jazz programming service; BET Books, publisher of African–American themed romance novels under the name Arabesque Books; BET International, reaching 3 million subscribers in 66 countries worldwide; and BET Pictures, producer of documentaries and television movies that air on BET networks. BET also owns a large stake in BET.com, the online African–American themed Internet site, and an interest in two XM Satellite Radio channels that play Urban Adult Contemporary and Jazz formats.

Personal Life

Described as intensely ambitious and foresighted, Johnson has also been characterized as gregarious, easygoing, graceful, personal, bright, and articulate. He wears a thick gold bracelet and custom shirts and usually works 15 hours a day during his six–day work week. On January 19, 1969, Johnson married Sheila Crump Johnson, now the BET's executive vice president for corporate affairs, with whom he has a daughter, Paige, and a son, Brett. Johnson and his family live in Washington, D.C., and on the family's 163–acre farm in Virginia.

In addition to his business ventures, Johnson also founded the Metropolitan Cable Club in 1981, a forum for the exchange of information in the telecommunications industry, and served as its president and later a member of its board. He currently serves on the boards of US Airways, Hilton Hotels Corp., General Mills, United Negro College Fund, National Cable Television Association (NCTA), and the American Film Institute. He is also a member of the Board of Governors for the Rock and Roll Hall of Fame and the Brookings Institute. He was named by President Bush in 2001 to serve on a 16–member commission to overhaul the Social Security Program. Among his numerous awards are the President's Award from the NCTA (1982); the NAACP's Image Award (1982); the Capitol Press Club's Pioneer Award (1984); the Business of the Year Award from the Washington, D.C., Chamber of Commerce (1985); the Executive Leadership Council Award (1992); the Turner Broadcasting Trumpet Award (1993); Broadcast & Cable Magazine's Hall of Fame Award (1997); CTAM's Grand Tam Award; Cablevision Magazine's 20/20 Vision Award; National Women's Political Caucus' Good Guys Award; and a Distinguished Alumni Award from Princeton University.

Robert Louis Johnson was born on April 8, 1946, in Hickory, Mississippi, a rural town 25 miles west of Meridian. The Johnson family moved to the industrial farming town of Freeport, Illinois, where both parents worked in local factories to provide for their large family. Johnson and his siblings were taught to be self–sufficient. As the ninth of ten children, Johnson told Beverly Smith in a 1992 interview on CNN's Pinnacle that he had "a lot of brothers and sisters that I could sort of pick on if I had to for whatever information."

Johnson hoped to become a fighter pilot in the U.S. Air Force but could not meet the physical requirements and concentrated instead on his studies and on college. A good student in high school, he graduated with honors in history and entered the University of Illinois on an academic scholarship, graduating in 1968 with a bachelor's degree in history. Although he lacked the usual qualifications, Johnson was considered a worthy enough risk to be admitted to Princeton University's Woodrow Wilson School of Public and International Affairs in 1969. He graduated sixth in his class in 1972 with a master's degree in public administration.

While at Princeton, Johnson established connections that led to a job as press secretary for the Corporation for Public Broadcasting. After joining the U.S. Army Reserve during the Vietnam War, he became public affairs officer at the Corporation for Public Broadcasting. Johnson then worked as director of communications for the Washington Urban League, press aide for the District of Columbia's city councilman Sterling Tucker, and press secretary for Walter Fauntroy, the District's nonvoting delegate to Congress. From 1976 to 1979, Johnson was vice-president of government relations for the National Cable and Television Association (NCTA).

Career Details

While at NCTA, Johnson developed the idea of starting a cable network company to promote black characters, thought, and philosophy primarily for African Americans. According to the A. C. Nielsen ratings, black viewers watched an average of 70 hours of television per week—compared to 48 hours for whites—but in the late 1970s no networks carried programming specifically for blacks, nor were blacks shown in powerful, dominant roles. He persuaded his NCTA supervisor to promise him a $15,000 consulting contract, which he used to secure a matching loan from the National Bank of Washington. He then borrowed $320,000 from John C. Malone, head of Denver-based Tele–Communications Inc. (TCI), one of the nation's largest builders of cable systems. Malone and TCI also paid him $180,000 for a 20 percent share in the new network.

On January 25, 1980, Black Entertainment Television, which Johnson created from the basement of his home, made its debut on cable with A Visit to the Chief's Son, a two–hour movie with an all-black cast that drew an audience of 3.8 million homes in 350 markets. At first, BET kept expenses low by showing low–cost programs that would appeal specifically to blacks, using such black film subjects as Lady Sings the Blues. Free music videos from record companies were aired by 1982, and BET soon added black stars, talk shows with black hosts and guests, and black college sports.

BET struggled with several consecutive years of losses. In 1982, Johnson took on a new partner, Taft Broadcasting Company. In 1984 Home Box Office, a cable subsidiary of Time Incorporated (now Time Warner), invested in BET because of its 24–hour telecasting and 7.6 million subscribers. In spite of phenomenal growth, by 1989 BET was still the smallest and least carried of all cable networks. The company also faced legal setbacks from competitors. Johnson began another cable venture in 1984, District Cablevision Incorporated, intended to wire homes and serve the District of Columbia. TCI owned 75 percent of the new company, however, and competitors filed suit to prevent a monopoly, causing more financial pressure. By 1986, the financial burden was eased, but BET did not pay back its investors until 1989.

Johnson then established BET Holdings II Incorporated, the parent company of BET, and on October 30, 1991, BET became the first black–owned corporation listed on the New York Stock Exchange. Although by then three other black firms had gone public with their stock, none had remained on the public market or had been listed by the NYSE. According to Current Biography, the day BET was listed, investors "bid the price up to more than $23 a share, and BET (which reported $9 million in earnings in 1991) had acquired a market value of $475 million." Then Johnson sold 375,000 of his own shares and, in a single day, earned $6.4 million. His net worth after 11 years of work from the increased value of his controlling interest reached more than $104 million. Although the company lost some ground when investors questioned his subscriber count, BET sold some of its stock, clarified the number of subscribers, and later recovered some of its losses. Commenting on his financial progress, the Network Journal for June 30, 1995, quoted Johnson's statement to CNN: "Black people will become powerful in this country when they obtain power through control of economic wealth."

Chronology: Robert L. Johnson

1946: Born.

1976: Served as vice president of government relations for the National Cable and Television Association (NCTA).

1980: Johnson's Black Entertainment Television debuted on cable.

1991: BET became the first black–owned corporation listed on the New York Stock Exchange.

1995: Moved company to a new $15 million building in Washington's northern industrial corridor.

1996: BET launched the nation's first black–controlled cable movie premium channel, BET Movies/STARZ!3.

1998: Founded BET Pictures II and BET Arabesque Films.

1998: Took company private at $1.3 billion valuation.

2001: BET acquired by Viacom for $3 billion.

2001: BET.com voted Best African–American Community Site by Yahoo! Internet Life magazine.

In 1991 BET also acquired controlling interest in Emerge: Black America's News Magazine, which is aimed at young adults, and began publishing YSB (Young Sisters and Brothers), which appeals to adolescents. BET also established a radio network in 1994 which provides news and music to urban stations nationwide.

The company took a bold step in 1995 by moving its 350 employees to a new $15 million building in Washington's northern industrial corridor. In April of 1995, Johnson added a 50,000 square–foot film and video production facility, one of the largest of its kind on the east coast. In the Network Journal for June 30, 1985, Tony Chapelle cited Johnson's plans to become "the preeminent provider of information entertainment and direct marketing services to the Black community."

By 1995, BET reached 41.3 million households. By 1996 the cable network, still the core of the company's holdings, had a children's literature hour, public affairs show, weekly show for teenagers, town hall meetings, and music videos. BET also owned the Cable Jazz Channel and ventures in Africa and England.

In 1996, BET launched the nation's first black–controlled cable movie premium channel, BET Movies/STARZ!3, which offered a lineup of classics that included To Sir with Love as well as the newer Pulp Fiction and Spike Lee's Clockers. Johnson told the Los Angeles Sentinel for October 3, 1996, "What we're doing is something that's unique. We're branding movies that appeal to an audience that has demonstrated a tremendous amount of interest in viewing film entertainment." Encore Media Corporation, a cable and satellite movie provider, is another TCI–controlled company. That venture is intended to develop and exhibit black–oriented feature–length films and expand pay–TV households in urban markets. The company established BET Gospel in December 1998, which features inspirational music and speakers. All told, the company was gaining twice the number of viewers Johnson had estimated, at about four million subscribers a year from 1990–1998.

Expanding his cable empire, Johnson founded BET Pictures II and BET Arabesque Films in 1998 to make and promote films, documentaries, and TV movies, with African–American themes. Building on the brand name outside the world of cable TV, BET Holdings II, Inc. also grew its publishing division with BET Arabesque Books, which is the only publisher of original African–American romance novels written by African–American authors; BET Weekend, the third largest black publication in the country with 1.3 million readers; and Heart & Soul, a beauty, health and fitness magazine.

BET also made its way to the Internet, establishing BET Interactive, LLC (formerly BET.com) in a joint venture with Liberty Digital, LLC, News Corporation, Inc., USA Networks, Inc., and Microsoft Corporation. The BET.com portal contains news, music, health and career Information, and e–mail and chat services for African Americans. The website was voted Best African–American Community Site in 2001 by Yahoo! Internet Life magazine. BET Interactive also owns the 360hiphop.com hip–hop music and culture website. BET Holdings II, Inc. also branched out into a variety of ventures, including the theme restaurant BET SoundStage Restaurant; BET Sound-Stage Club, an entertainment and dance club and joint venture with Walt Disney World Resort at Downtown Disney Pleasure Island in Orlando; BET On Jazz restaurant that specializes in New World Caribbean Cuisine; and Tres Jazz, a French Caribbean fine dining restaurant in the Park Place Las Vegas Resort and Casino.

After being a public company for seven years, Johnson took it private again, at a $1.3 billion valuation in 1998. On November 3, 2000, media giant Viacom announced that it would acquire BET Holdings II, Inc. for $3 billion, which it completed in January, 2001. Johnson, who netted $1.5 billion in Viacom stock for his 63 percent stake, remains as the chairman and CEO of the new Viacom unit. In a Viacom press release, Johnson stated, "Viacom is the perfect home for BET, a healthy, profitable business and the dominant media brand serving the African–American consumer. Combining the assets of BET with the global resources and brands of Viacom will create a platform that is even stronger and better positioned to deliver the wants and needs of BET's core audience. We will be able to continue to push programming to new heights, expand our distribution globally, and leverage the marketing resources of the best advertising–driven media company in the world."

The Viacom deal made Johnson the first black billionaire, ranking 172nd on The Forbes 400 list of wealthiest Americans, and gave him a 1.6 percent stake in Viacom that makes him the company's second–largest individual shareholder, behind only Viacom chairman Sumner Redstone. Johnson has come under some criticism as a "sell–out" in the black community for the Viacom deal, especially after a much–publicized firing of BET talk show host Tavis Smiley. While BET is cherished by many as the only black entertainment channel, others complain of a lack of social consciousness and outdated images. Johnson countered the criticism in Forbes saying, "We are the only black network in town, so everybody has poured their burdens and obligations on BET, but we can't solve everybody's desires for BET. We have to be focused on running this as a profit maximization business." He also added, "If people would just judge BET for what it is, instead of what they'd like it to be. But nobody will sing our praises." If praise can be measured in viewers and ratings, though, BET's song is on the lips of many. Since BET was acquired by Viacom in early 2001, it has gained 2.5 million subscribers and boosted ratings 23 percent among 18 to 34–year–old blacks from 2000. BET saw record ratings in June 2001, with an average of nearly 400,000 homes.

Johnson's personal success has also allowed him to purchase seven hotels, through his new company RLJ Development L.L.C., from Hilton for $95 million and he also owns a minority stake in Vanguarde. Johnson had also repurchased several of the restaurants previously owned by BET Holdings II, Inc., that he has since sold. Most notably, in 2000, Johnson had plans to build his own airline, DC Air, with a $200 million investment and discarded assets of the proposed merger of United Airlines and US Airways until the deal fell through when the merger was rejected by the government. Forbes reports as of late 2001, he is planning on purchasing more hotels and even a professional sports franchise.

Social and Economic Impact

Johnson's BET Holdings II, Inc., was named by Forbes magazine for two consecutive years as one of the Best Small Companies in America. Since he founded BET in 1980, it has grown into a conglomerate that produces television content, films, magazines, restaurants, and other entertainment ventures, pushing it toward his goal of making it the most–valued consumer brand within the black marketplace. Johnson pioneered his company in many areas, beginning with Black Entertainment Television, the first and only basic cable station providing programming by and about blacks. In a landmark billion dollar deal, Johnson sold the company to media giant Viacom, giving him another distinctive first—the country's first black billionaire.

BET also spawned a whole new generation of black executives, producers, and broadcast talent. Curtis Gadson, BET's head of entertainment programming, recalled in Forbes, "When I first walked into BET I saw a sea of black people doing the same jobs that I had always seen only whites doing elsewhere. I was almost in tears. The playing field was all of a sudden equal." Forbes reports that today, 96 percent of BET's 290 employees are black.

In 1996, Johnson pledged $100,000 to Howard University to help support the School of Communication, and the school responded at its 25th anniversary gala by awarding Johnson the Messenger Award for Excellence in Communications. Jannette Dates, the school's interim dean, praised Johnson for his success and his support of the school. Quoted in the Washington Informer for November 6, 1996, Dates summed up Johnson's success: "[H]e showed America that an African American from a not very privileged background can, with the strength of his intelligence and hard work, take a small beginning and become a tremendous success. He has also succeeded in communicating an array of new images of African Americans that are different from those that were portrayed over the years past."