Live on Bloomberg TV

00:00This is my kitchen table and also my filing system over much of the past three decades. I've been an investor, the highest quality of mankind. I've often thought is private equity. And then I started interviewing on my watch here. Those I know how to do. I've learned in doing my interviews how leaders make it to the top. I asked him how much he wanted. He said 250. I said, fine, I didn't negotiate with him. I did no due diligence. I have something I'd like to sell and how they stay there. You don't feel inadequate now because the only the second wealthiest man in the world. Is that right? The first African-American in the United States to become a billionaire was Bob Johnson. He did that by building Black Entertainment Television and subsequently selling it to Viacom. He used some of those proceeds to buy the Charlotte Bobcats, becoming the first African-American to be a major sporting team owner. He later sold that basketball team to Michael Jordan. Today, Bob Johnson is involved in a wide variety of business ventures across the United States. I sat down with him in Palm Beach to talk about his career and what he sees next for himself. So when you became the first African-American to be a billionaire, what was that like? People calling you up, telling you how great you are or people calling up, asking for money all the time? No, I was nothing like that, David. You know, I had run Black Entertainment Television Beattie for over 20 years until I sold it to Viacom. So, Beatty, it's going to become a business success story. And as a result of that, people began to see me as sort of a as an entrepreneur that was doing something pretty, pretty good at that time. And so by the time I got to where I was sold to Viacom, it was sort of expected that it would be worth something. So when you sold it to Viacom for that, you then bought the Charlotte Bobcats, an NBA team, and you became the first African-American to be an owner of a major sports team in our country. So what was that like? Was that thrilling to own an NBA team or did you really just see it as a business venture? Well, I first saw it as the idea of being first. There's been throughout the black business history. If you were the first black to do something, you gain visibility, you gained notoriety and you gain access to other peoples, particularly white business people who knew you by your reputation. So when there was a team coming up for sale in Charlotte, I said, you know, why not be first? I had the capital from the sale of Beatty to Viacom. So I said, why not? And I decided to make a bid and got a call from some of the business people in Charlotte. They said, we'd like you to be the majority owner of the team. We'll be the minority owners and work with you. And so it just seemed to be the right place at the right time to do something I thought would be part of a strategic approach to being first. So you owned the team for about 11 years and then you sold it to a person named Michael Jordan. So that same day. Yeah. And after that, you began a an effort to build what I'll call a small business empire. You have investments in many different areas, private equity, financial services, fashion, lodging, hotels, real estate. And my own firm did something with you in private equity for a while. So is that what you're trying to do now is build a mini empire if different areas? And what are your most important parts of that empire? Well, what I did when I sold Beatty, I decided I wouldn't go and just sit around and do nothing. And I decided that one way to sort of build value for yourself was to take your own knowledge, your own strategic vision, and deploy your capital and your brand to acquire assets that you could run with very talented people to help you do it, obviously, and align yourself with people who shared your vision and your culture about creating what I call wealth in the black community and demonstrating to the broader market that African-American talent with capital and strategic partners like I do with John Malone when I started being t could be successful and create create value for yourself and create value for the investors. So you've been very involved in dealing with black entrepreneurship and black business owners. Do you think today it's easier for a black entrepreneur to start a company or no, no more easy than it was 20 years ago or 30 years ago? David, I don't think it's necessarily easier. I think there's a mindset within the white business community and to some extent in the country at large is that this definition of equity and diversity ought to see money flow and capital flowing into black entrepreneurs for investment and operate in startups of business. It's just not easy. It's just that there's a theory that it ought to happen. And I think that if it were easy, you would see more Bob Johnson or Michael Jordan, more Magic Johnson's and Oprah Winfrey's than the like. So I think it's a little bit of a misnomer to say it's easy. It is correct to say people think about it more. But do they do more? That's the problem. So after the George Floyd murder, ISE thought that many people in the white business community said, OK, we've got to do much more on getting blacks. And the board's senior positions in corporate America hasn't really happened or I should just talk about that. Well, David, the sad secret of that is companies, white companies have announce that they're going to put millions of dollars into diversity in terms of black invest in our business. But among the people I know and I know a lot of people who would say, hey, I just got money from here, there and other other places. It's really not happening. I saw something in the media that said there has been something like. Fifty billion dollars of pledges made, but less than 5 percent of that has ever been implemented. And to me, it's a real sad story because it's not happening. And I would know because no one is called me and I've been pretty successful, as you know, the only thing I've done that with David and I am most proud of is the partnership I've created with Vanguard Fidelity. And I like to create A for 1 K Auto Portability Business Corp. part portability network, whose sole purpose is to keep black Americans reduce cash out of 4 or 1 K account by black Americans and low wage workers environment. I mean, as Hispanic workers, when they change jobs that those two companies, those three companies put their commitment to diversity and opportunity and closing the wealth gap in a relation with me. And that's what I like and respect. But I can tell you, the black community entrepreneurs I know a very disappointed with these what I call press release announcements with no results. So when you sold your NBA team, the Charlotte Bobcats, the price of NBA teams had not risen to the billion dollar range. Any regrets about selling it when you sold it? Oh, definitely regrets. Tell Michael about that all the time. So let's talk about your background. Where did you grow up? I grew up born in Hippie, Mississippi. If you take a sip, is this real small town? One stop sign kind of town. What did your parents do? Well, they were workers. My father all his life was a worker in Mississippi. He was a lumber cutting down to timber in Mississippi and a little bit of farming where he lived. And my mother was a schoolteacher at the small school system in Mississippi when they migrated up north to the small town of Freeport, about 100 miles northwest of Chicago. They became factory workers. So you went to college where? University, Illinois, Champaign abandoned. And what did you study? History. I was a history major throughout my home. So what did you want to be? I want to be a diplomat. I want to be an ambassador, a diplomat. What year did you graduate? I graduated in 68, 68. And then you went to Woodrow Wilson School at Princeton Instant. And that's to do further diplomatic knowledge. Yes. I had got a degree, master's degree in international affairs. And again, the fascination was was was history and global affairs. So you'd get a degree from Princeton, a graduate degree from Princeton. And all of a sudden the U.S. government says, we're ready for you to be a diplomat. Or what happened? Well, all of a sudden they ask you, if you want to go to the foreign service, you have to take a test. And the test requires you to be literate in things that a kid from Hickory, Mississippi, through Freeport, Illinois, didn't really know about. So when I had a question, I never get this. Ask me a question. One other question. What is Wedgwood? And they said a dresser. I thought it was weird, it was addressing. It was X that you weren't familiar with, Wedgwood fits, right. So ultimately you came to Washington, though, and what did you do when you came to Washington? Well, I came to DC with the Princeton imprimatur and the connections of people who were a former Princeton Woodrow Wilson graduates, including a good friend of ours, Jim Johnson. And so I started making the rounds. People refer me to this person. I went to Senator Mondale's office. I went to Senator Kennedy's office and everything else that this Princeton Princeton Mafia service fee. And finally, somebody up there went to one of the offices, referred me to CPB, the Corporation for Public Broadcasting. Got a job at the Corporation for Public Broadcasting for a while, change jobs from there, and went and worked for the local Urban League in Washington, D.C. and from there became a lobbyist for the Cable Television Trade Association. And that's where I met all the guys in the cable industry. Ted Turner. But most importantly, John Malone for John Malone was your principal backer when you wanted to start Black Entertainment Television. Absolutely, John. I'll never forget this. I was a lobbyist. We were trying to deregulate cable. Cable was heavily regulated to protect broadcast television on the theory that broadcast live free cable was paying. And if we didn't protect free television, then everybody would have to pay, which was supposedly not good for people. So my job was to go up on Capitol Hill and argue for the deregulation of cable so it could compete with over the air television. And so I met John Malone and he said, Bob, if you ever have an idea, once you come out to Denver and talk to me, I said, yes, John, I'll do it. And that's where my starting Black Entertainment Television came from. And I took John up on his invitation and went out to Denver and made my pitch about getting the financing for Beatty. So John said to me, Bob, here's what I'll do. How much you need to start this? I said, I need half a million dollars. Five hundred thousand. He said, Bob, here's what I might do. I'm going to buy 20 percent of your company for one hundred and eighty, and I'm alone. You 320. That's your five hundred thousand. And John said under that deal, Bob, you will be 80 percent on it and I'll be 20. Is that a deal? I said, John, that's a deal. What Malone didn't know David. If he'd reversed in, I would say I'll be 80. And Bob, you'll be joining. I'd say John, that's a big deal. He didn't say that. So he kept putting money into Beatty while I was growing. Never put it in his equity, put it in his debt and the debt got paid back. And I did ask and say, John, why did you put it in his debt when you couldn't put his equity? You owe more. He said, Bob, I always knew you would work harder for yourself than you would for me. So John never sold a share. So when I sold Beatty to Viacom for approximately 3 7 3 almost 3 billion dollars, John's one to 80 of equity 320 debt, of course, got paid back. Netted him over seven hundred million dollars in back on paper, of course, we did a stock for stock. Well, what was the theory behind E.T. that African-Americans should have a cable channel devoted to programs that would be appealing to them in particular? Was that what you were trying to do? Yeah, well, the theory was what cable was offering to the community, basically diversity, because once you put it, once RCA put a satellite in the sky, they could orbit on a geosynchronous orbit that allowed it to send signals all around. Every cable had in cable became a competitor, but television and the big markets. And in order to do that, they had to get some big cities who by that time in the 80s had black city councilman. We wanted to and maybe a black mayor. So while they were offering programming to everybody else, you know, whether it's MTV or CNN or ESPN, the Black City Council member who was saying, you want this franchise, what are you offering for my community? And that's where Beatty became sort of a must carry product to getting cable and the diversity part of grow. But it was really an extension of what John Johnson did with Ebony magazine, except he has with print and now with video. So how many years did you operate before your sort to icon? 20 years. Sold for roughly three billion dollars. All told me. So in hindsight, had you held on longer, would it be worth more today or would worth less today because the cable world's changed so much? It would be, in my opinion, less today because once streaming came along and the technology allowed people to have streaming where everyday could carry content on your phone, on your laptop, in your home, wherever you go. It changed the paradigm of cable and it allowed people to sort of pick and choose an oligarch way what they wanted to watch. So if you only want their lives Netflix, you just get Netflix cable, you are paying for a bundle even though you didn't watch all the channels. So some people were paying for TV. When a sports fan, you're paying 30 cents, 30, 40 cents, whatever it is now for ESPN. But if you earn NYSE Anthony, you had to pay for it because as part of a bundle. So you then bought, as you mentioned earlier, the Charlotte Bobcats, a new team. You didn't know much about running a basketball team, I assume. So you brought in a guy named Michael Jordan. How do you tell Michael Jordan that he doesn't know much about basketball if the thing isn't working out perfectly? Can you say, Michael? I played in grade school and I know something about basketball. How do you tell Michael Jordan things aren't working perfectly? When if it doesn't work perfectly, you don't. OK. So I'll just let him run the team. And you basically owned it and he more or less was the manager of it. He was he was the general manager of it. And he decided on who he's going to hire as coach. You decide what players you're going to draft and he does that and on how the team would be be run. I was the pay the player in this game. So when you sold your NBA team, the Charlotte Bobcats, the price of NBA teams had not risen to the billion dollar range. Any regrets about selling it when you sold it? Oh, definitely regrets that. Tell Michael about that all the time. But nobody could have predicted that Don Sterling would say what he said about black people. And that led to the NBA commissioner to say we've got a huge racial problem if we can keep Don Sterling as an owner. And he basically forced Donald Sterling out. But being forced out and you walk away with a two billion dollars, you know, a lot of people like you before the team for that price. And so that was it. But it Michael was always my first choice to sell the team. He and I been friends, you know, 10, 15 years before I even on the team, really. So, you know, I want to say, if anybody I wanted to sell the team to, if I was forced to sell it to Michael. As we talked today, there's rumors that the Washington football team now called the commanders might be sold. And NFL teams are pretty expensive. But any interest in getting back into sports? You're a native of Washington or not native, but you've lived there for a long time. That's probably a check too far for me, because these these teams are so rich. And I mean, you get one. It's a little bit. I would call an NFL team by the closest thing to a license to print money that you can think of, but you gotta really pay up for it because it's a great sport asset. It's one of the best, I would say, in the world. Maybe it may be better than some of the hockey team is pretty close. You're right. And the interest in serving in a senior position in the federal government? Absolutely, unequivocally no. But the aggravation factor isn't worth it. It's the aggravation factor. But it's more importantly his. I don't believe there's any integrity in. You've been involved in advising presidential candidates, I presume presidents as well. You ever have any interest in serving in a senior position in the federal government or running for office? Absolutely. Unequivocally no. The aggravation factor isn't worth it. It's the aggravation factor. But it's more importantly is I don't believe there's any integrity in it. So you do give money to politicians, though, because that's the system. But you part of the game, I think, to be honest, I think there's a need for a multi-party system in the US to give more people a choice about where they can throw their voter support and their political support, but also to cause the country that sort of come together by having everybody have a role in deciding what is in the long term best interests of the country. I've often believed that black Americans as a people and as a voting bloc. Should adopt the same position that the original founders of the Congressional Black Caucus had in 19th early Sept 1970. Their philosophy was enunciated like this. Black Americans should have no permanent friends, no permanent enemies, just permanent interests. And if we vote it like that, we would be able to leverage that block because it is a consistent block in our long term best interest. We're going to be addicted to one party and ignored by the other party. Do you have government officials, members of Congress or people in the White House ever ask you for advice these days? Well, I don't think they ask so much as I try to go to them to. Suggested then what they should consider, particularly as it relates to what I call I have a form of belief, I call their business solutions to social problems. I'm not a big proponent of government handouts. I've never been in favor of government subsidies. I like the idea of government providing a pathway to regulatory freedom and balance to allow companies to create it. But they've got to be some focus on economic benefits, too. In my opinion, to the black community. And for example, real quickly, I've got members of the Congressional Black Caucus to support something I call the Boost Day Boost Act. Very simple was this it would give investors in black businesses a tax preference if they would invest in these business. I called and legislation was introduced by a congressman and flew me from Baltimore would put 30 billion of Treasury money aside for preferences for myself, for you who would go to a company and say, I'm going to invest in your business x number of dollars when you exit that business or do a sale of that business. I will get a preference on my capital gains and the whole idea it was not a mandate then required. It was only voluntarily. To me, that's better than all of these pledges that are going around that are not being fact implemented. And that's the kind of way I go the same way I did that with the auto portability. So you're one of the best known black entrepreneurs and business leaders in the United States and one of the wealthiest. You faced discrimination today in your daily lives or in your your business career. Do you still think you're being discriminated against? Do you think you're not in that situation? Others are. But you're so well-known you face that discrimination. No, you face discrimination in terms of what I call. Bias discrimination, where they people just don't they recognize you as black first. Bob Johnson second and wealthy Bob Johnson third. So when you get in that situation, you find cases like this. A clear example. I could be go I could go to a restaurant. And if I'm standing outside waiting to go in after I'm giving my car to be park somewhere, we'll come up to me and ask me to get their car. What do you say when that happens? So can I take it and keep it? But now, I mean, the thing is they. They see a black man. Standing by parking, valet parking. Their intellectual bias assumes, one, you can't afford to be at that restaurant to you standing next to valet parking. You must be a parking lot. So today, as you look at the United States economy, are you worried that we're heading into a recession of some type that will hurt moderate black businesses? But all businesses? I think the economy has to have a recession in front of it. Until we stop that huge amount of fiscal spending that comes out of the government and I see nothing in the government that will change that trajectory on spending. And that's the part where I think we've got to face a recession, because as you keep dumping money and chasing fewer goods, it's probably the textbook description of you're headed toward a recession and or worse than that to have it. There's something called a variation that called stagflation, where you get you get spending going up and you got productivity going down because it puts you in a problem. So, yeah, I think that until something changes on that equation. Yeah. Did your parents live to see your success as a business leader? They did. In terms of BBT, they did then. And I still owned that. I hadn't sold it and hadn't done all the other things that they tell you. You're terrific. We knew you were going to be successful or they said, you know, you're just the same as our other nine children. That when my mother always used to say somebody to say, oh, aren't you proud of your son, Bob? She'd say, I love all my children. That was her thing.

No schedule data available.

The David Rubenstein Show: Bob Johnson

Bob Johnson, BET founder and RLJ Companies chairman, shares his story of creating Black Entertainment Television and becoming America's first black billionaire. Johnson speaks on "The David Rubenstein Show: Peer-to-Peer Conversations" recorded Nov. 23 in Palm Beach, Florida. (Source: Bloomberg)

More From TV Shows
All episodes and clips