IN CONVERSATION WITH …
Chairman and CEO of Entertainment Studios
"I have a style that is agnostic like Ali and Mayweather. What people didn't understand, and I never sought to correct them on was my method. All of my shows were on late-night instead of prime-time, and daytime like everyone else. What they didn't see was the enormous profitability and how that positioning set me up for the wins."
In 2015, citing a violation of the Civil Rights Act of 1866, 42 U.S.C. §1981, Byron Allen filed a $20-billion racial discrimination lawsuit against cablers Comcast Corp. and Time Warner Cable. Historic in precedent given the sum and the origin of the suit. Allen's, David vs. Goliath play was a paradigm shift to the benefit of many when Comcast, still reeling in the aftermath of the unwanted spotlight, committed to designate a number of minority-owned networks in their acquisition of NBC Universal. Allen, still an enigma to many in the industry that he is winning with strategic precision, allowed an in-depth conversation to lift the veil.
Detroit, Michigan born. LA raised.
Owner of eight 24-hour HD networks
Owner of The Grio
Owner of Freestyle Releasing
Owner of The Weather Channel
100% privately owned
My Mother gave birth to me 17 days after her 17th birthday. My Father was not much older. He worked at Ford Motor Company. My maternal Grandfather worked at Great Lake Steel, and my paternal Grandfather owned a skating rink, so I could skate before I could actually walk.
Detroit in the 60s was an amazing place for me to be in. We made the cars for the world. We made the music for the world. Motown was just down the street, and we won the World Series. I remember one day being out for a drive with my Mother, Grandmother, and Uncle—who is really like my brother—and seeing all these big houses. As it was told to me, "this is where the rich folks live." My Grandmother used to clean houses in these areas, so she knew who lived where in these nice areas. That big house over there belonged to the Fords. That one down the road is where the Dodge Brothers live, and this is where BARRY GORDY lives.
I was taken aback by that because until that moment I didn't have an image or reference for someone who looked like me that could live in such a place. More to the point that someone like me, and therefore I, could have the career success and lifestyle to afford owning such a home. Barry Gordy had an actual swimming pool. Unlike us, he didn't have to walk to the community center and stand in line for twenty minutes. That stayed with me. It helped me to see my trajectory and placement differently, independent of the world unfolding around me.
There are events and occurrences in life that rip the innocence of childhood from you. Mine was 1968. I was 7-years old. That was the year that they murdered MARTIN LUTHER KING JR. I remember that experience and how the military was right there on the spot as if the government was expecting the death and was ready for black folks to erupt. I heard my Grandmother and my Mother scream. I looked up at the porch to where they were and by the time I turned around to look down the street I was staring down the barrel of a tank with troops walking throughout the neighborhood with bayonets and rifles. Our quiet working-class neighborhood of families was placed under military siege. A curfew was implemented, and it was made clear that anyone found on the streets in violation of that would be shot.
I remember the dogs and the checkpoints. It's hard even now to put those emotions into words. Being so young and seeing this unbelievable emotional pain that transforms your neighborhood into a war zone is more than difficult. It is something that you never want your own child to see or witness, and yet times have not changed much. I am not certain if it was seeing this that made my mother decide to travel to California that summer, but she did and brought me along for what was supposed to be a two- week vacation.
One day I came in, and she asked me if I wanted to go back to Detroit. I told her, "no." The crazy thing is she never asked me why. If she had, I would have told her that I had just come from the movie theater and saw the trailer for ‘101 Dalmatians' or something like that and it was opening after were scheduled to leave so if we stayed I could see it. That was fifty years ago.
At 7 years old I was now the man of the house. It was tough for my mom, a young woman in her mid-20s, along with a child. I saw her cry herself to sleep many nights because she worried about keeping a roof over our heads and putting food on the table. We slept on the sofas and floors of friends and family until she was able to get a place for us. When you see that as a young man, you don't want to be a financial burden. Therefore, I started to master the art of making money because I knew that if there were more in the way of financial hardships that I could potentially be taken away and lose my mother. I knew that people went to my mother to tell her that she could not afford to raise me and should place me up for adoption or foster care. When you hear those types of conversations, you are motivated to find ways to make money and make money quickly.
Ralph's Grocery Store would not allow me to bag groceries because of my age, but on the way out the door, I saw that the cart dispensary gave a stamp for every cart returned. One hundred stamps equal $1 worth of food. This was a job I could do, and I created for myself, so I spent my afternoons and weekends in the grocery store parking lot hauling carts from the lot into the dispensary. At the end of each day, I could bring home a bag of food giving my mother one less thing to worry about. We became a dream team.
Mom was working odd-jobs and enrolled at UCLA, where she received her Master's degree in Cinema TV & Production. As a result, she was able to interview for a position at NBC. She did not get the job, but never one to give up and allow a door to close without exploring every option, mom asked them if they had an internship program. They did not have one so she asked them to start one with her, and they did. Eventually, she became a paid employee working in the Publicity department. I was now 13 or 14 years old and would go out to the studio. While waiting for her to get off work, I would go and sit on the set of all the television shows: Johnny Carson, The Flip Wilson Show, Redd Fox Sanford & Sons, Richard Pryor's Summer Shows, Chico, and the Man. You name it, it was there, and I had access to it all. Not just the production, but I was able to listen to what the network executives were saying and learn. When you are a kid in spaces like that, the best thing is the invisibility and acceptance it brings. Nothing and no one was off limits to me. They didn't see me, but I heard it all. I grew up at the studio, it was a different kind of factory. What a wonderful way to go through life—making people laugh.
The summer of 1975, I was on the set as GLADYS KNIGHT, AND THE PIPPS were taping their special. They had a comedian on. I remember knocking on his door and asking, "how do you become a comedian?" It was GABE KOTTER star of ‘Welcome Back, Kotter.' He told me, "go to the Comedy Store," and that is what I did. Monday night was tryouts day. I went, got on, and kept going back. One night, WAYNE KLEIN comes up to me and asked who wrote my material. It was my first lesson of content being king. I told him that I did and he asked for my phone number, gives it to JIMMIE WALKER. Within a week's time, I am sitting in Jimmy's apartment as part of his writing team along with DAVID LETTERMAN, JAY LENO and MARTY MATLER. Every Tuesday and Thursday I would be there. I got paid $25 a joke while Dave and Jay were getting $200/per week. I kept writing and performing. When I was 17 years old, I was offered the audience warm-up spot on The Tonight Show with Johnny Carson, but knowing my goal was to get into USC Film School, I turned it down until I completed high school. I joined the show a year later, and the exposure was a floodgate for offers leading me to Real People and a crash course on what real America looks like.
REAL PEOPLE: AMERICA’S SALESMAN
Real People was one of the first reality shows. We traveled across country featuring "real people" doing interesting things. The show was terrific for me, taking me all over the country, and allowing me to know firsthand what people outside of the entertainment bubble thought. I was making $2500/episode and enjoying the ride, and then we hit a speed bump: I learned that in year one my counterparts Skip and Sara were making were making $10,000 and $7500 per episode, respectively. Year two, I am making $4000 per episode, and they are getting $15,000 and $12,500 per episode. Finally, in year three, when I was no longer under contract, but still appearing on the show, I asked if I could get the salary that Skip and Sara received in year two. I was fired. One of the producers even said, "he is 19 years old and black, he's lucky to be working. When I was his age, I was digging ditches."
At the time, it was one of the most painful things to ever happen to me, but it was also the best. I understood then and there that I never again wanted to be in a position where someone else states what my value is and what I was worth. It is great to get kicked in the face early on, not later on. I am knocked, but not down. I am now on the road opening up for LIONEL RICHIE, THE POINTER SISTERS, SAMMY DAVIS JR., AL JARREAU, and WHITNEY HOUSTON, and with each stop, I am building relationships. I would invite the local station managers, general managers, and program directors to come and see my shows at each stop or I would go sit with them and get to know them and what their needs were. Time spent with them allowed me to learn how the Middle America markets that drive the business of show really work, and provided me the urgency to attend NATPE in 1981.
DEAL MAKING FLOORS
NATPE (National Association of Television Programming Executives) is where they buy and sell television shows. It is where all the advertisers and TV stations congregate. I have gone every year since—37 consecutive years. This was my Master's Degree in the show business. I met my mentor AL MACINI, creator of Star Search, Solid Gold, and Lifestyles of The Rich and Famous. When I walked up to his suite to meet him, he was pitching this new idea for what we now know as Entertainment Tonight. I watched him sell satellite, the technology of the day that would allow every station across the country to run the same show at the same time respective to their time zone. He was in control of the pieces, and that appealed to me.
It is not a coincidence that comedians are very successful in movies, television, and talk shows because to be a comedian you have to go through that process of being direct with the audience and knowledgeable about how they will feel with what you say and how to connect with them. I knew that as a comedian I was more attuned to most Americans than an executive because I had to stand on a stage nightly with a microphone seeking to engage them and make them laugh every 6 seconds or so.
I interviewed six funny friends for what was supposed to be a one-hour special and my first weekly show, Entertainers with Byron Allen, was born. Now I just needed to sell it. Each day I would sit at my dining room table and call the 1300 national, local stations asking them to carry the show for free on a barter basis. Fourteen minutes of commercial time, I keep seven minutes to sell to national advertisers, and they keep seven to sell to local advertisers. I was able to squeeze out about 150 yeses. I now had a lineup, but I also had three big problems: I didn't know how to sell advertising, no one wanted to buy it, and the $400,000 towards production that Tribune had promised has fallen through. This was a defining moment for me. I could not retreat, so I advanced, funding the production personally. There were days I did not eat. There were days that my phone was turned off. My home went in and out of foreclosure many, many times over the first five years. Failure was not an option. I never had the thought that I would fail, only the awareness that has to get over this speed bump and this speedbump.
In the years that followed, I started to amass a library of content that I could reformat for production direct to the stations. I created a sports-themed special from existing content interviews we had done in the past with the likes of Michael Jordan, Hakeem Olajuwon, Oscar de la Hoya, and others. Production costs to me were $20,000. The format sold to advertisers for $1,000,000.00. Be at the cash register yourself—this is me heeding the lessons of my grandfathers.
I kept building, and now 41 shows currently on air, and one of the largest privately held libraries in the word. The only that is 100% black-owned and 100% privately owned.
YOU DON’T GET, IF YOU NEVER ASK
In 2007, I read in the NYTimes that Verizon was spending $23B to bring fiber optics (FiOS) to homes in order to compete with the cable companies and offer 150 channels. I went to them and asked for 10 channels. My vision was to optimize my production wherein any crew that was out on assignment would shoot content across all verticals. In doing so, we could streamline cost for maximum capabilities. The executives liked what heard and gave me six channels: My Destination.TV, Cars.TV, Recipe.TV, Pets.TV. ES.TV, and Comedy.TV. We made history that day, and no one ever wrote about it.
Next up we launched Justice Central.TV, now the largest producer of television court shows Judges Chris Ross, Judge Cristina Perez, Judge Hatchett, Judge Mablean, Judge Karen, and We The People With Gloria Allred. Instead of building our own set, I gave my team the mandate to locate an existing one for sale. FOX canceled its court show. I offered them $1 for the entire thing. They, of course, balked until we walked them through the costs they would incur to tear it down: crews, demolition, waste management, etc. We closed for $1.
The INEQUALITY OF ECONOMICS
Even in our growth, I noticed that we continued to have problems getting distribution with COMCAST and Charter. Throughout the years, I had encountered many obstacles in the market, even having members of my sales team come back and tell me that certain GMs and Owners would not work with me because of my race. Those speed bumps only fueled me to allow my success to do the talking. It was not until a good friend came to me about a brilliant idea—a black college sports network in partnership with the HBCUs across the nation potentially worth billions—that had been shot down by Comcast that I lit up like a Christmas Tree and decided to enter the fight with maximum stakes, wish I could by this point.
I brought this up to my lawyer, expressing that we must have a mechanism to force corporate America to do business with us because they were not. In the case of Comcast, a cable company started in Tugaloo, Mississippi with more than 500 channels and none of them black-owned, they were in the process of trying to buy NBC Universal, and I did not think that was right. They collect about $100M per day, $3B per month and about $36B per year and 48% of that is coming from African-Americans, and yet there were no 100% black-owned networks. I used a Civil Rights Act of 1866, 42 U.S.C. §1981 and filed a $20B lawsuit against Comcast. This was a law put on the books to protect newly freed slaves to make sure that we had economic inclusion in both commercial and government.
I took out a full-page ad in the Washington Post calling for 100% black ownership of stations with full capacity to produce. As a result, the heads of Comcast and GE got on a plane to Washington for an audience with President Obama explaining that if he approved the merger that they would create 4 African-American networks, 4 Hispanic networks, and 2 others.
CORETTA SCOTT KING
She once said to me that, "as black people, we have four major challenges: end slavery, end Jim Crow, achieve Civil Rights," and as she choked back tears, "the real reason they killed my Martin: achieve economic inclusion." They didn't kill Martin over Civil Rights or "I have a Dream." No, they killed him for his speech, "THE OTHER AMERICA," that he gave at Stanford in 1967. He was pushing for a slice of the economic capital.
When they brought us here as enslaved people, they brought us here to be an asset to grow their wealth. When we became free that is when they introduced the Jim Crow laws because now African-Americans were a liability and competition that must be eliminated, and my how they have tried: hangings, burnings, and incarcerations. We were never imagined to take a piece of the ‘American Pie,' and that is the error in assessment that stops many of us. It's all tantamount to economic genocide for which the Civil Rights laws have yet to address.
I sued corporate America, not for the money, but to force them to the table to do business with us and reform the laws. I used their methods to bring our fight to the forefront, thereby eliminating their ability to enact the four Ds:
First, they Dismiss you.
Then, they Discredit you.
If you speak up, they Demonize you.
Then, they seek to Destroy you using their Christian beliefs to justify their actions.
Independent of the outcome this federal lawsuit it will be used as precedent to open the door and create economic inclusion for others long after we have all gone.
There is no shortage of scared black folks in our business who are seeking to reap the benefits of a well-fought battle when in actuality they are just getting crumbs of failure to pacify and stop demands for a larger slice. Always focus on your weakness. As African-Americans, our historic weakness has been lack of access to capital, and that is why we don't have ownership. I have made it a great focus of my life to focus on that—understanding capital, how capital markets operate, and the flow of capital so we can have a seat at the table.
I have three:
"They didn't pay me enough." FLIP WILSON once said this to me, and I will never forget it.
"There are more cowboy boots in America than Gucci loafers." Show business is not what is here in LA or NYC it is what is in between.
"Put 36 hours in a 24-hour day and work for yourself." That is the entrepreneur spirit.
I recall watching a Barry Gordy documentary where he said that seeing Joe Louis inspired him with the courage to do Motown because he now saw himself differently. Seeing that excellence, that level of excellence in form and body of you, is powerful. The line of inspiration is clear. I credit Barry Gordy. Barry Gordy credits Joe Louis, Joe Louis credits Jack Johnson.
The Magic of Believing by CLAUDE BRISTOL
The Power of the Subconscious Mind by JOSEPH MURPHY
Think and Grow Rich by NAPOLEON HILL
Succeeding Against The Odds by JOHN H. JOHNSON and LERONE BENNETT JR.– hands down the very best business books ever written in my option. The founding of Ebony magazine is just part of the story.
I love what I do. I still feel like I am at my infancy. I am the same age, pretty much, that Rupert Murdoch came to America and started Fox. I am the same age that Ray Kroc started McDonald's and created the largest distribution system in America. I don't think the President of the United States is the most powerful person in the world. I think the person who controls media is the most powerful person in the world. We control what you see, what you read, and ultimately what you think, say, and how you behave.
I have been doing what I do for a long time, people just never saw it. I own ES 100% because no one ever offered to be my partner. This ecosystem is not my own, so I had to build my own, and I am neither astonished by how big my vision is nor am I ever apologetic for it. My mindset is the same as those giants that hailed from the Industrial Revolution. Today, it is the Digital Revolution and what fuels it is content. I plan to be King; what Rockefeller was to the Industrial Revolution, I will be to the Digital Revolution.