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September 2003
Another Slam Dunk for Johnson
By Lynda A. Stadler

    Many wise people have said that having a vision is not enough; that everything depends on execution. Call Bob Johnson a wise man. As founder and CEO of Black Entertainment Television (BET), Johnson has become a hero and role model in the African-American community and a classic case study for American business.

      Charlotte’s new NBA franchise owner is indeed a self-made man who applied sound business principles to a good idea and executed a strategy that yielded multi-billion dollar results.

      Believing that success breeds success, Johnson now hopes to put his Midas touch on Charlotte, building a top-notch basketball organization and entertainment venue that will impact the social and economic future of the city.

 

Building a Foundation

    Robert Louis Johnson, 57, was born in Hickory, Mississippi, the ninth of 10 children born to working-class parents, Archie and Edna Johnson. Johnson was raised to be self-sufficient and early on had dreams of being a fighter pilot and an ambassador to a European country.

     Unable to pass the 20/20 vision test required to become a pilot, Johnson moved on to other aspirations. He studied history at the University of Illinois earning a bachelor’s degree in 1968. Assisted in part by a grant from the Ford Foundation and an academic scholarship, Johnson earned a master’s degree in international affairs at Woodrow Wilson School of Public and International Affairs at Princeton University in 1972.

     Johnson began his career as press secretary and public affairs officer for the Corporation for Public Broadcasting and subsequently as director of communications for the Washington Urban League. He then served as press secretary for Walter E. Fauntroy, the congressional delegate from the District of Columbia. After being introduced to the concept of cable television by a friend at a party, he joined the National Cable and Telecommunications Association (NCTA) as vice president of government relations in 1976. He launched his cable television network, BET, in January 1980.

 

Realizing an Opportunity

    Johnson’s vision of BET began to take form while working at NCTA in Washington, D.C., a time when the cable industry was a fledgling mom-and-pop business catering to customers primarily in rural areas of the country. The industry was filled with entrepreneurs who had lots of ambition and little capital, says Robert Sachs, president of NCTA, and Johnson fit right in.

    “Bob’s experience with NCTA gave him a window on an industry that was very young,” explains Sachs, who has known Johnson for more than 20 years. “He was well positioned to observe the changes that were starting to transform the industry and get to know many of the pioneers in the business.

     “He looked around and saw new programming channels being created and he recognized that there was a major void in the television landscape when it came to programming for African-Americans. He had the vision to say ‘I can create a channel’ and he had the respect of people in the industry who were willing to help stake him. He took what he learned about the business and carved out a place for himself and other minority entrepreneurs.”

     And it was not an easy task at the time, asserts Sachs. “Bob had to work hard to gain carriage of BET because companies were not as attuned to the diverse demographics of the country as they are today. He had to sell BET to cable operators and advertisers on the strength of his own personality and character.” 

     Today, BET is a cable programming network that serves 75 million cable homes, including more than 95 percent of all black cable households, with programming designed to appeal to the viewing interests of African-Americans. It provides a mix of music, entertainment, sitcoms, originally-produced programming, black college sports, movies, and news specials. BET includes four channels: BET, BET Jazz, BET Hip/Hop, and BET Gospel, as well as a book publishing company called BET Books, the country’s leading publisher of African American romance novels under the Arabesque Books title. The company also runs an Internet site www.BET.com, managed by BET Interactive, which is a joint venture formed with Microsoft, Liberty Digital Media, News Corporation and USA Networks.

     Aside from his recent purchase of the Charlotte NBA franchise, Johnson’s personal assets have grown to include holdings in movies, music, restaurants, hotels, and Caribbean lottery licensing. He continues to pursue business opportunities that interest and excite him. “Business is not over because you achieve one objective,” says Johnson. “You can’t rest on your laurels; there’s always more to do…more opportunities to pursue.”

 

Realizing the Vision

     In starting up BET, Johnson knew that executing a strategy takes drive, determination and money. He had the first two but came up short on the capital. Johnson turned to industry pioneer John Malone, then chairman of Denver-based Tele-Communications Inc. (TCI), the country’s third largest cable operator. “He thought my idea for BET was a good one and liked my sales pitch and decided he would invest $500,000,” Johnson explains. To this day, Malone remains Johnson’s trusted business partner, mentor and friend.

     Convincing Malone to listen to the idea was not difficult, Johnson recalls. Since he knew that Malone needed programming content for his growing enterprise, especially the systems he was building in the urban areas, Johnson says his BET proposal was very appealing.

      “John was a person who believed in entrepreneurship, and believed in supporting entrepreneurs who were willing to work hard, had creative ideas and could provide benefits to his business,” he says.

    “He is a mentor to me,” says Johnson of Malone. “He was my original backer, he always believed in me, and gave me support and advice when I needed it. I like that type of attitude and personality in an individual.”

      BET went on the air with its first programming in January 1980, for only two hours each week. The challenges of the start-up were the same as what all young businesses face when taking a product to market, says Johnson. “Cable operators had fewer channels at the time so it was difficult to get in with them. We had to make the argument that African-Americans were excellent customers and that by providing BET they would have more people support and subscribe to their cable services in their markets,” he explains. “And since cable television was a new idea we had to demonstrate to advertisers that when African-Americans watch programs that appeal to their interests, they watched with more intensity, which therefore made them more receptive to advertising messages.”

      BET enjoyed banner years of growth and prosperity, as well as years when they struggled with losses; yet over the past two decades they held fast to the vision and made history in the process. According to Johnson, BET is the greatest African-American success story in business, both in terms of economic value and its brand identity. In 1991, BET had become the first black-owned corporation listed on the New York Stock Exchange. In 1998, Johnson took the company private, buying back its stock at double the market price then sold it two years later to media conglomerate Viacom for approximately $3.2 billion. Johnson is now America’s first black billionaire.

      The success of BET has resulted in great wealth and rewards for many minority entrepreneurs and has greatly impacted the African-American community. But Johnson insists it just made good business sense. He did not set out to crusade for the African-American community, but if it would help he was all for it.

      “I’ve always approached business as the need to maximize shareholder value and to create economic opportunity for investors,” explains Johnson. “The key driver for me was to create a business that was economically viable. In so doing, if we could also create a brand that would strongly impact and provide a positive message to the black community, then that was even better.”

 

Maximizing Shareholder Value

       The 2000 Viacom deal was a prime example of Johnson’s commitment to shareholder value. The $3.2 billion price tag for BET was nearly four times what Johnson spent to buy it back from the public – a move he made because he did not feel the shareholders on Wall Street valued the business for what it was worth. The timing of the sale, says Johnson, immediately followed the super-hyped Time Warner/AOL deal which put a high price on programming assets.

       “At the time, I realized that it was the height of content value and, if I were going to do a deal, it was the time. You have to know when to stay in the game and when to exercise your exit strategy.”

       Although Johnson remains CEO of BET for five years according to his sale contract, letting go of BET was something he was always prepared to do. “I never saw the business as a family heirloom – something that would be in my control forever,” he explains. “I always believed in shareholder maximization, and I had an obligation to John Malone and some of the other shareholders that if there were ever an opportunity to maximize value, it was my responsibility to seriously consider it and execute it.”

 

Johnson on Tapping the Entrepreneur Within

      In Johnson’s mind, he is always the salesman – whether it’s selling John Malone on the idea of a black entertainment cable channel, the NBA on awarding him a franchise, or the citizens of Charlotte on the benefits of buying basketball tickets. Self-confidence has always been his most valuable asset, he says.

     “There’s nothing greater than believing in yourself when you’re trying to convince people to go into battle with you,” he states. It’s not only having the drive to see your vision through, he says, but “you must be able to create enthusiasm among other people to become a part of what you’re doing or selling.” Johnson says that growing up in a large family forced him to become self-reliant and confident at an early age. “I’ve always been confident. If I put my mind to something, I’m 90 percent sure I am going to make it happen,” he asserts.

       Ed Tapscott, executive vice president of the Bobcats/Sting organization agrees. “Bob is very creative, focused and passionate. And he is also relentless. Once he has his mind on something, he’s going to stick with it to its conclusion.”

      “For example, I’m sure there were a lot of people who didn’t think BET would work, or that it would work to the level of success that it has,” suggests Tapscott. “And, along the way I’m sure the playing field wasn’t always level – probably at times it tilted uphill. But it never deterred Bob. He took on the challenge with focus and created wealth for himself and others.”

      Johnson was once quoted as saying, “Money isn’t everything, you must have your own passion for things you enjoy doing…you should look for things that excite you.” His wealth notwithstanding, he believes everyone can have this mindset – after all, most successful business leaders started out as average people with above average determination to follow their dreams. He cites such examples as Bill Gates and Ted Turner. Average guys like himself who started out with big ideas and an ability to convince others to believe.

      “You start with who you are,” explains Johnson. “And what you have is your belief in yourself, your willingness to work harder then the next guy, and your capacity to convince people to buy into your dream.” These things are possessed in abundance by many people, insists Johnson, and it’s not determined by how much money your parents have, rather it is determined by your own personal make up.

      “I started with an idea. And it was hard, hard work. It took dedication, determination, and a lot of luck, of course. But at the end of the day, luck will help you find a dime or a dollar but it takes some understanding of what to do with it before you can make it into something.”

      Perceived obstacles should be treated as challenges that can be solved through intelligent decisions, focus and drive, says Johnson. “If you say, ‘This can’t be done,’ or ‘I can’t do this,’ it is a guarantee that you will fail.”

     True entrepreneurs, asserts Johnson, are more interested in the journey rather than the destination. “Most entrepreneurs don’t go into business saying, ‘One day I’m going to be a real wealthy person.’” Johnson believes, “they go into it because they see something no one else can see and they are compelled to try to pull it off.”

 

Making a Name in Charlotte

     Most people who are successful in one business tend to believe they can make any business work well, says Johnson. He proved the point in Charlotte when he purchased the NBA Bobcats/WNBA Sting basketball franchises last year. What will make it work are the people hired to run the organization and the fans who support it, says Johnson. “The people who work for the Bobcats and the Sting are very talented people; they are very dedicated and have the right kind of attitude about creating something that the people of Charlotte will be excited about,” he states.

     Johnson says that the Charlotte franchise opportunity appealed to him because he was impressed by the enthusiasm that government and business leaders have for the economic and social development of Charlotte. “They have been very supportive and open to new business. They see Charlotte as a growth city that also has a deep sense of civic pride and responsibility. And I like that in a city. I think it makes a good prescription for a successful business.”

      He views professional sports as affecting the community in three ways; “A sports team can be a real unifying force in the city,” he explains. “Fans like to come together in an arena to share a sense of pride and accomplishment. A sports enterprise is also a strong economic contributor to a community, attracting investment and generating revenue; and it adds to the quality of life. People like to be in a city that celebrates sports.” Johnson also considers the addition of the new arena downtown a catalyst for economic growth in the area.

       Johnson has already become a highly visible leader in the organization, purchasing a condominium in The Ratcliffe downtown – just six blocks for the site of the new arena – so he can spend time in Charlotte and be involved in the organization’s activities. He’s on the phone every day convincing people to buy tickets and luxury boxes in the arena and says his involvement will help ensure that the culture of the franchise is a “winning” culture.

      “I’m not only committed to this organization because I have a lot invested here, but because I honestly believe that the people of Charlotte are some of the best people to be in business with,” he asserts.

      Building successful entertainment brands is at the core of Johnson’s business experience. In Charlotte he plans to create an arena environment that is “emotionally engaging to fans,” whether they’re watching a basketball game, a family event or a concert. No other competitor can offer the variety of entertainment that they are going to offer or the venue in which they will deliver it, says Johnson. “We think we have the best product in town. We will have something for everyone in Charlotte.”

     Johnson’s statement in July concerning his promise that the Bobcats organization will never embarrass the Charlotte community was considered bold by some standards, especially considering the nature of the professional sports industry. But Johnson disagrees. He believes it is simply a part of the core company values that should be built into the fabric of any organization.

     “Every company should have a policy that it does not embarrass its customers,” asserts Johnson. “And we’re no different just because we’re associated with the NBA. What I was saying was that for me, it starts by having the cultural foundation and understanding that we’re going to be a first-rate organization run with integrity and by people who respect our value system.”

     Although Johnson knows he can’t control what somebody might do in making a bad judgment, “I can control how we respond to it and how we create an environment that tries to minimize the likelihood of that happening,” he asserts.

      The effects of Bob Johnson on Charlotte are not likely to be limited to the NBA franchise activities. He has already displayed a commitment to the community through a $1 million gift to the West Boulevard YMCA. As owner of a real estate company he has indicated interest in land development in uptown Charlotte. “I expect to sit down with the city officials soon and give them my ideas on development opportunities here to see if they’re interested,” says Johnson. Currently he is also in negotiations with AOL/Time Warner to create a regional sports channel that will unite the Carolinas by broadcasting college and high school sports from schools around the region.

 

Leaving a Legacy

     Tapscott believes that as a result of purchasing the NBA franchise, Johnson will be known primarily as the first African-American to own a sports franchise. But in his mind a professional basketball team is a small-sized business compared to BET and the “firsts” Johnson achieved while building the company.

     “In spite of the public acclaim with sports ownership, Bob’s first accomplishment of BET has had the most profound affect on our culture, history and individuals,” says Tapscott.

     And as Johnson reflects on his own achievements, he hopes his legacy will live on through his children and other young ambitious people. “The smartest thing to do is believe in yourself and work hard to pursue your dreams,” he advises. As for his legacy? “I want to be known as someone who had a vision and pursued it in a way that changed people’s lives and made things better.”

Lynda A. Stadler is a Charlotte-based freelance writer.
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