Live Episode! Black Entertainment Television: Robert Johnson

In 1979, Robert Johnson was a lobbyist for the burgeoning cable industry. That's when he got an idea for a channel called Black Entertainment Television. He started small, just a few hours of programming a week. But by the 1990s BET had become a cultural touchstone. In 2001, he sold BET to Viacom for $2.3 billion, making him the first African-American billionaire in US history. Recorded live in Washington, D. C. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:06Speaker 00

  So when I got the idea for BET, I went out and talked to John. And we're sitting in his office. And he asked me, Bob, how much did it take you to launch BET? And I said, John, about a half a million dollars. And so Malone says to me, he said, Bob, here's what I'm going to do. I'm going to buy 20% of your company for 180, and I'm going to loan you 320. 180, 320, there's your $500,000. Now, under that business plan, Bob, you will be 80, and I'll be 20. Is that a deal? I said, John, that's a deal. What Malone didn't know at the time, if he reversed the numbers and said, I'll be 80,

• 0:50Speaker 00

  and Bob, you'll be 20, I said, John, that's a deal.

• 0:59Guy Raz?

  From NPR, it's How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built.

• 1:10Guy Raz?

  I'm Guy Raz, and on this special live episode, how Bob Johnson turned a small cable channel called BET into a media empire and from it, became the first African-American billionaire in US history.

• 1:32Guy Raz?

  So when Bob Johnson came to Washington DC as a young man in the early 1970s, he planned to focus on public policy, which is what he did for most of his early years. And in the mid-1970s, Bob stumbled into a job with an obscure trade association called the National Cable Television Association. Now, these were the very, very early days of cable TV, and very few people understood the potential of this new force in TV. But Bob Johnson, he was one of those very few people. And it was while he was there when he started to dream about a black-oriented cable channel. And so, at the ripe old age of 33, Bob quit his job to pursue what was then a big gamble,

• 2:17Guy Raz?

  a channel he would call BET, and a channel that would eventually make Bob one of the most successful media entrepreneurs in America. Which isn't bad for a kid who grew up in a working-class home with nine brothers and sisters in Freeport, Illinois. Bob Johnson sat down with me in front of a live audience at listener auditorium right here in Washington, DC.

• 2:50Guy Raz?

  So Bob, you know, you symbolize a lot of things to-- especially to folks in this city, because this is your city, and we'll get into that. But I want to start with your childhood. Most of it spent in Freeport, Illinois. This was in the 50s and 60s. First of all, what kind of place was it in the 50s and 60s?

• 3:12Speaker 00

  Freeport is a small town about 100 miles northwest of Chicago, Illinois. It's a rural farming community with a little bit of light industry. A town where people got along very well, not a lot of integration. You know, one side of the town where most of the African-Americans lived, the other side of the town was the whites lived. And they all sort of came together when you got to the high school and junior high.

• 3:42Guy Raz?

  And what kind of parents were your parents? Were they strict? Were they kind of hands-off?

• 3:48Speaker 00

  You know, all black parents are strict.

• 3:56Speaker 00

  If you-- you got to have a good excuse not to go to church. You had to dress neatly. And, you know, you couldn't drink, at least around the house. So that was the thing.

• 4:09Guy Raz?

  And what kind of student were you at school?

• 4:12Speaker 00

  I was-- I was-- turned out to be pretty smart, and I was in an advanced English class. And I'll never forget this, and it's-- I could have been-- I think I was 11th grade, 12th grade. And I remember this particular-- I'll never forget the guy's name. The guy was Professor Antis. And one day in class, he asked everybody, "How many of you are going to college?" Well, as I looked around the room, everybody who was there, most of them white, raised a hand. So I said, "What the hell? I'm gonna raise my hand, too." So I figured I could get past that day. After doing that, I said, I really gotta go out and find out about college if I'm gonna do this. So I went down and I found out about an application to the University of Illinois State School.

• 4:57Speaker 00

  And I ended up going to the University of Illinois.

• 4:59Guy Raz?

  And I believe you studied history there, right?

• 5:01Speaker 00

  I was, uh, social studies, teacher education was my major. And with the idea, I was gonna be a teacher, you know, I graduated from honors from the University of Illinois. And at that time, the State Department was looking to recruit African Americans to go into the diplomatic corps. They would help pay your way to any school of international affairs that would prep you for a diplomacy. And so I did that and then applied for a number of schools and got accepted at the Woodrow Wilson School at Princeton in international affairs.

• 5:37Guy Raz?

  You, um, you first, I guess, came down here to get into public policy around 1972, I think. What do you remember about Washington DC at that time?

• 5:52Speaker 00

  Well, when I came down, remember, I came down out of Princeton. So if you have a Ivy League degree, there's a, uh, a network of Ivy League graduates in Washington. And I remember meeting the lady who was the press secretary to Lady Bird Johnson. I'll never forget it. She said, who do you want to work for? And I said, I wanted to work for Kennedy. She said, ah, Kennedy doesn't pay. You don't work for Kennedy. And it just, this was, this was Ted Kennedy. And then I said, I want to, she said, uh, who else do you like? I said, I like Walter Mondale. She said, oh, well, I can get you into see Mondale. So I go to see Mondale. He, his office doesn't have a job. And then he says, uh, you know what?

• 6:36Speaker 00

  I just know somebody who's at the Corporation for Public Broadcasting. Would you be interested in that? And I just, you know, came down from Princeton. I said, sure. So I go down and the guy's looking for a public information officer to write. Information about the programming at the various PBS stations, the educational stations, and that was my first job as a public information officer for Corporation for Public Broadcasting.

• 7:02Guy Raz?

  And you must have captured the attention of people pretty quickly because within a couple of years you were working for Walter Fontroy, who would go on to become the first DC delegate to Congress.

• 7:16Speaker 00

  No, I didn't capture anybody's attention. What happened was, what happened was, I didn't know anything about Washington. I just came down here off of, from Princeton. And, and all of a sudden I'm working there, having a good time, and there's an election.

• 7:30Guy Raz?

  Huh.

• 7:31Speaker 00

  Didn't make any difference to me. They're both, you know, white guys, so I didn't care about it. And, uh, so, so what I do is, you know, it's, I found out what Washington is like, is when they change administrations, some people get fired. And, and, and I started saying, well, gee, I guess I'll look around. And that's how somebody I knew referred me to the delegate from the District of Columbia, Walter Fontroy, who was a non-voting congressperson. And so I just did what you do in Washington. When administration changes, you change jobs. And that's, that's what I did. And that's how I ended up on Capitol Hill, working as, as his press secretary.

• 8:11Guy Raz?

  But at that point in your life, you were not thinking about becoming a businessman? Like, if, if we went back to who you were when you were working for Walter Fontroy, you would not have guessed, I guess, at that point, that you would go into business, would you?

• 8:24Speaker 00

  No, no, I didn't. I mean, to me, the only business I ever had was a paper route, and I failed at that, so I didn't have, I didn't. But what I did learn from that and another summer job I had, I didn't like working for anybody else. So if I was gonna be successful, I'd probably have to, one day, work for myself. So, but no, but when I was working as a press secretary, you meet a lot of people. And I was at a party, I lived at time over in southwest DC. So I meet this lady at this party and she's, we get to talking and she said, "Wow, you'd make a good lobbyist for the cable industry." And I said, "I don't know anything about cable." She said, "Don't worry, I didn't know anything about it when I got in it either." So I got in the cable industry and that gave me the one stripe I was missing.

• 9:09Speaker 00

  So I had the political stripe, I had the public affairs stripe at CPB. Uh, and it was the business stripe lobbying about for a business, for deregulation. And out of that came my entree to the pioneers in the cable industry.

• 9:24Guy Raz?

  So, but, so you just met this, this woman at a party? And she said, "Hey, you should get involved in the cable industry. I work for this trade association. Do you wanna come meet the people who work there?"

• 9:35Speaker 00

  Yeah, I'm a pretty attractive guy. So when she, when I was talking to her, she understood, you know, that I had some potential to be, uh, to be a lobbyist.

• 9:53Guy Raz?

  What, what was the cable industry at that time? I mean, I mean, were, were, were there a lot of people who understood that it was going to disrupt network TV? Or did most people kind of think of it as a, a, a, a niche sector? You know, like a flash in the pan?

• 10:08Speaker 00

  The, the, uh, the rule of thumb was for the broadcasters, cable would erode audiences and harm over the air free broadcasting, which really translated in harm their pocketbook. Then on top of that, there was the telephone companies who wanted to control cable lines getting on telephone poles. Because you can't get cable to a home unless it's strung up on a telephone pole. So the cable, so the telephone companies in league with the broadcasters. And a lot of members of Congress, because if you're a congressperson, who do you turn to to get your story out? Your local broadcaster. So they had a formidable group of opposition against cable deregulation.

• 10:51Speaker 00

  But, you know, technology is a hard thing to keep tied down. And as satellites launched and you could beam signals across the entire country and aggregate huge audiences via cable. Over time, the argument for more content, free choice, more diversity of content particularly, won the argument with a couple of court cases. And the end result is, you see what you have now, is a zillion channels of cable and digital content. And broadcast is healthy, maybe not as healthy as it used to be, but still a formidable content provider.

• 11:30Guy Raz?

  So this may be an apocryphal story, but I've read that in 1979, you met a guy from Florida who was coming to DC to meet with Congress folks about an idea he had. You were a lobbyist and you came to help him. What's that story? Is it true?

• 11:49Speaker 00

  No, it's true. It's not apocryphal at all. It's this guy, he wanted to start a channel for the elderly. Ken Silverman. So Ken Silverman said to me, I said, "Let me see your proposal." He opened it up and he had this data. He said elderly people consume certain products. Elderly people have a certain income. Elderly people make up X percent of the population. And I said, "Wow, that's some good data points."

• 12:18Guy Raz?

  Your job was to just kind of facilitate this?

• 12:21Speaker 00

  My job was to facilitate his access to Congress as a lobbyist. So Ken went up and we made the introduction. For some reason, he never got his elderly channel off the ground. I don't know why. But I had his information. So when I started BET, I said, "Black people have certain spending patterns. Black people have certain shopping patterns." I just, wherever he had elderly, I just filled in black. And I just went in and took his model. And out of that came BET.

• 12:49Guy Raz?

  Was that the genesis of the idea? You, this guy had this idea for an elderly channel and you're looking at it and you're saying, "Wait a minute, this applies to African-Americans as well."

• 12:59Speaker 00

  No, that wasn't the genesis of it.

• 13:01Guy Raz?

  You would have been thinking about this idea?

• 13:02Speaker 00

  That's too highbrow word for what I did. That was pure, that was pure theft. Genesis would be, genesis would be content that was not technologically driven by satellite and cable. It would be Ebony Magazine. Because what Ebony Magazine and Jet and Essence and Black Enterprise and even Black Radio, they told the story of black aspirations, they gave open to black content and information, and black radio stations play black music. So, the concept, or the genesis, if you will, of Targeted Program already existed.

• 13:44Guy Raz?

  Yeah.

• 13:45Speaker 00

  You know, Life or Look could have started Ebony Magazine if they wanted to, they didn't want to because it was segregated or niche content. Fortune could have started Black Enterprise, they didn't want to do it because it was niche content. What I did was to take advantage of the technological change that was brought about by the launch of satellites to allow signals to be beamed across the United States. And instead of aggregating just black households in Chicago, I could aggregate black cable households all across the continental United States.

• 14:16Guy Raz?

  Because, because you were looking at these media organizations and you were saying, "We can do this on TV."

• 14:21Speaker 00

  Yeah. They, they had the business model. They sold advertising, they had readers in this case, or subscribers, and they made money. So, that model would work if you could put together content on television. But you had to aggregate a large enough audience because you couldn't compete with a local broadcast station trying to find it just in one city. You had to have the whole country.

• 14:46Guy Raz?

  So, you're there, working for this Cable Trade Association. This idea is starting to kind of work its way through your head. Were there other people who, who were seeing the same opportunity that you saw at the same time?

• 14:58Speaker 00

  Yeah. I mean, the one that's most fascinating is Ted Turner launching CNN. If you think about it... CBS with Walter Cronkite, the brand as a father of news, could have launched on cable a CBS news network instead of letting Ted do it. But they saw themselves as a 30-minute, 6:00 PM period of news. They just didn't see news as a 24-hour audience product that would appeal to Americans across the country. I remember when I was talking to Ted when he was starting it. And the same thing with the guys with ESPN. NBC could have started ESPN if they wanted to, but they didn't.

• 15:42Speaker 00

  And I was talking to Ted and he was pitching the idea to people about a 24-hour news network. It's a funny thing. If you go back and read some of the clips about what people were saying when Ted says he's going to do a 24-hour news, you find out people were laughing at him. So when Ted was talking about it, and I say, "Ted, what happens if there's a day where there's no news?" And Ted said, "Bob, here's what we got. We got a group of people. We're going to go out and start fires. And then we'll cover the fires and then we'll have some news." So, you know, that's... But what happened is people missed out on the cable revolution. This is something in business to do is they...

• 16:27Speaker 00

  You know, it's the old saying is that the reason the railroad companies didn't own the airlines is because the railroad companies, they thought they were in the railroad business as opposed to the passenger moving business. I mean, everybody here in this room probably had one at a time, a yellow analog Sony Walkman.

• 16:49Speaker 00

  And I bet you they're in your closet someplace. You haven't thrown them out. But they didn't go digital. And they lost out to Apple and the rest is history.

• 16:59Guy Raz?

  Yeah, I want to come back to that in just a moment. But I want to ask you how you started this. I mean, you are 33. I'm assuming you didn't have a whole lot of your own money to work with.

• 17:10Speaker 00

  I had a paycheck, but that was about it. And I was working at the cable industry. And so I had to leave the... When I started, I had to leave the cable industry. So I borrowed some money from a bank to start.

• 17:23Guy Raz?

  Do you remember how much?

• 17:25Speaker 00

  It's probably forty thousand dollars.

• 17:27Guy Raz?

  So you got a bank loan?

• 17:28Speaker 00

  Yep.

• 17:29Guy Raz?

  And that's not enough to start a cable television network? So what did you do? Where did you go find the money?

• 17:35Speaker 00

  Well, I had met, I was a lobbyist, obviously, and I met one of the board of directors of the trade association, a gentleman by the name of Dr. John Malone. And he and I became friends. And one day he said to me, he said, "Bob, if you ever have an idea, come talk to me." So when I got the idea for BET, I went out and talked to John. And we were sitting in his office. And he asked me, "Bob, how much does it take you to launch BET?" And I said, "John, about a half a million dollars." And so Malone says to me, he said, "Bob, here's what I'm gonna do. I'm going to buy 20% of your company for 180, and I'm gonna loan you 320. 180, 320, there's your 500,000 dollars.

• 18:20Speaker 00

  Now, under that business plan, Bob, you will be 80 and I'll be 20. Is that a deal?" I said, "John, that's a deal." What Malone didn't know at the time, if he reversed the numbers and said, "I'll be 80 and Bob, you'll be 20", I said, "John, that's a deal." Now, you gotta keep in mind, a half a million dollars, to me, was equal to the total GDP of everybody black in Freeport. So I got this check. I am terrified that something bad's gonna happen. I walk out of this building and somebody's gonna rob me of this 500,000 dollars.

• 18:57Guy Raz?

  Wait, he gave you, just to clarify, he gave you 500,000 dollars like that? With no due diligence, no...

• 19:03Speaker 00

  It took 30 minutes for him to give me this check.

• 19:07Guy Raz?

  Why? Why would he believe? I mean...

• 19:09Speaker 00

  I told you, I'm good. I even, I said...

• 19:12Guy Raz?

  But you were a 33-year-old, I mean, you're a 33-year-old man with no, you hadn't had any experience running a...

• 19:18Speaker 00

  Well, I did, I did a survey. I call, I remember I got on the phone and called down to a place called Anderson, Alabama. I called a barber shop in Anderson, Alabama. The shop was owned by a guy named Pink Junior Woods.

• 19:36Speaker 00

  So I called in and I said, "I'd like to speak to Pink Junior." And Pink Junior got on the phone. I said, "Pink..."

• 19:44Speaker 00

  If I brought cable down to Anniston, Alabama, and played Grambling football, Jackson State football, would you guys subscribe? He said, "You could do that?" I said, "Yeah, if you could subscribe." He said, "Yeah." He said, he took the phone off. He said, "Hey, there's a guy on the phone saying if he brought Grambling football down, would you subscribe?" And they said, "Yeah." So I took that back to John Malone. I said, "John, I did a survey in the black community."

• 20:08Speaker 00

  And people down in Anniston, Alabama, and I assume Anniston's like other cities throughout the South, they would subscribe. And so he said, "Okay." And he brought his lawyer in, took off 30 minutes. He wrote me this check. And so now John gives me the check. And, you know, I gotta say, "John, I gotta ask you a question." But I waited till I had the check first. So anyway, I wasn't gonna be stupid, because I was gonna get the check first. So I said, "John, I've never started a business before. What advice can you give me?" And John Malone said, "Bob, get your revenues up, keep your costs down." That was my Harvard MBA, and I was set.

• 20:56Guy Raz?

  In just a moment, how Bob Johnson took BET public, then private, and then eventually how it made him a very, very rich man. Stay with us. You're listening to a live recording of How I Built This from NPR.

• 21:42Guy Raz?

  Hey, welcome back to this special live recording of How I Built This from NPR. I'm Guy Raz. So it's 1980, and Bob Johnson has just taken that half a million dollars from John Malone to launch BET. But don't get the wrong idea. In the beginning, BET wasn't actually a channel with tons of content. In fact, the stuff it showed lasted barely longer than this podcast.

• 22:07Speaker 00

  It was on for two hours on a Friday and a Saturday night. That was it on the, carried on one of the popular cable channels, I think, USA Network. And as we started programming more and more, we started getting more hours on the USA Network. And eventually, we said, "We gotta have our own satellite." And so, we had enough capital to acquire a satellite transponder to beam our own signal. So, we went from eight hours to 16 hours at 24 hours and...

• 22:37Guy Raz?

  And what was the content that you were...

• 22:39Speaker 00

  The content was syndicated programming that we could buy from the studios.

• 22:44Guy Raz?

  For cheap?

• 22:45Speaker 00

  Yeah.

• 22:45Guy Raz?

  Because content, original content is expensive.

• 22:48Speaker 00

  Oh, no, we didn't do anything original. We, we, we, it had to be, we called it the three "ins." In the can, in the studios, or in existence. That's all it is. So, a Grambling football game, they're gonna play anyway, whether we show up or not with a camera. So, we do football games because it was in existence. Something's in the can was, you know, sitcoms, you know, good times and stuff like that. And then, in studio is, you put people like we are now, all we gotta do is bring out a camera, you'd have a BET show.

• 23:24Guy Raz?

  So, you were, so the idea was to create, to offer content that wasn't gonna be that expensive, but that could build an audience?

• 23:31Speaker 00

  Yeah, if it would get your revenues up, keep your costs down. And then, when MTV refused to play, or started out not playing black music videos, and the black talent wanted to have their videos shown, and I went to them and say, "Hey, if you keep making the videos, I'll keep putting them on." And as a result of that, we gained a sort of an early franchise position in showing urban R&B, African-American music videos.

• 24:01Guy Raz?

  And all of that was free? All that content was free?

• 24:04Speaker 00

  Totally free.

• 24:05Guy Raz?

  Wow. I mean, it's like, it's like, you think about a company today, like a media company today, and, you know, investors want, you know, user-generated content, because making content is expensive, which is why investors love YouTube, for example, right? Or Reddit, because... Nobody's paying to make that content.

• 24:22Speaker 00

  Yeah, if you, if you wanna look at how I became a business genius, it's not very hard. All you gotta do is come up with a business where you get free music videos, cable operators pay you, and advertisers pay you. So you get paid twice for nothing. That's a pretty good deal. You gotta be real, you gotta be real dumb to mess up that model.

• 24:54Guy Raz?

  So when you started to pitch BET to advertisers in the first four or five years, were they, you know, coming to you with open arms, saying, "Yes, we want to advertise on this, on this channel"?

• 25:07Speaker 00

  Not really. I mean, early on, a couple of big brands said, "Hey, we, we really reach black audiences. We, we wanna be in touch with them." So Pepsi-Cola was an early advertiser because they soft drink appeals to that market. Same way with Anheuser-Busch. They, they got exclusive rights to advertise their beer. But what you call the real revenue generators, the, the package good guys, the Procter & Gamble's, the Colgate's and the like, they were slow to come on because they were reaching eyeballs on all the syndicated shows on network television. And so you could, you could accumulate a lot of black eyeballs and viewership without paying for something that was untested, unNielsen measured as cable. So it was, it was, it was a tough argument to make.

• 25:53Speaker 00

  But you make the case, you say, "Look, you gotta reach this audience. They consume your products, they work at your company. You do all of the do-good social selling." You know, it's just, you come, yeah, I'd say within about two inches of threatening them, you know? And that if you don't do this, I'm gonna tell Jesse Jackson that you're not advertising, stuff like that. So over time, though, as cable began to get greater penetration, more and more programming came about. Advertisers began to see the value of getting in first and advertising on BET or MTV and so on.

• 26:36Guy Raz?

  All right, so you are running this company, and you've got some momentum, you've become profitable, and in 1991, you take the company public. It becomes the first majority-black-owned company to be listed on the New York Stock Exchange.

• 26:52Speaker 00

  Right. No African-American had done it before on the stock exchange. Stock exchange's been around almost, you know, going back to about the founding of the country, a little bit after the Revolutionary War. And nobody had done it. So, and I had this notion that if you're gonna be a visible African-American player in a predominant white culture, business culture, you had to do something to get identified. And nothing could identify you more than playing at the game, you know, own a company, go public, be totally transparent in your ownership and everything about your company under rules, and that makes you part of the old boys' club. So I said, "Let me be the first one to do that."

• 27:37Speaker 00

  And that's what I did, and it made a lot of sense, and it worked.

• 27:41Guy Raz?

  Bob, one of the things that you know of and you've dealt with during your time at BET was, it came under criticism. You know, it wasn't always embraced within the black community. And some African-Americans felt that it wasn't a good representation of African-American culture. You've heard those criticisms in the past. Do you, did you ever feel like they were fair criticisms?

• 28:08Speaker 00

  Uh, no. Uh, I felt the criticisms were born out of what is in the African-American community. If you think about historically, the African-American community, it has been a collective. It's been a collective because they've been on set by forces beyond their control. And they all, as a result of that, they have to group together. And so, when you start a business, it was the preconceived notion that your business existed to further the collective, the goal of African-Americans. So if you were doing something that they felt didn't do it, say if you weren't doing black educational television,

• 28:53Speaker 00

  you were failing in your obligation. And so, we got the brunt of everybody who wanted us to be part of that collective, because we were the only one. We just happened to garner everybody's hopes, dreams, and aspirations. And then, the other part of it is, in black culture, because you have an obligation to be, I would say, more protective of our flaws, you can't do anything to show our flaws. So if you show scantily clad women in videos and all kinds of gyrating and dancing,

• 29:35Speaker 00

  and by the way, I never made a video at all, so don't blame me for it. That was like, that is not proper depiction of our people. On the other hand, MTV could do anything. They could do pimp my ride, pimp my sister, pimp anything you want. We couldn't do that. If we'd done that, we would have been banished. In fact, the, my successor, Deborah Lee, she was picketed for a period of almost four months, outside of her house with people at bullhorns, you know, taunting her because she was running BET that played music videos.

• 30:17Speaker 00

  But black America has always had to live in a contradiction because it is dominated by white culture.

• 30:28Guy Raz?

  Did that criticism ever get you down? Especially when you heard it from prominent African-Americans? Did you ever feel, you know, sad about it? Or, you know, were you saying what you're saying now?

• 30:41Speaker 00

  Do you think I would be here if criticism ever got me down? Do you think? Do you think I'd be saying this if criticism ever got me down? No.

• 30:56Guy Raz?

  All right, so you have this incredibly successful company, now a burgeoning media empire. In 1998, you decide to take it private. This is a public company, it's traded on the stock exchange. How did that happen? And why did you decide to buy it back?

• 31:13Speaker 00

  So, to me, the answer is simple, and I'm not sure why anybody would be baffled to ask me this question, because I figured I could make more money.

• 31:23Guy Raz?

  But you, I mean, the stock price was like 31, and you bought it back for like, double that amount, right?

• 31:30Speaker 00

  No, what happened was, the stock was trading at 31. We felt the stock was worth closer to 45 or 50, because we were getting a discount on the value of our shares, because the stock was thinly traded.

• 31:47Guy Raz?

  Why was it being undervalued?

• 31:49Speaker 00

  Because it was thinly traded. I owned a big chunk, and I wasn't a seller. John Malone owned a big chunk, he wasn't a seller. So there wasn't a lot of float in the marketplace to make the stock move up and down. So what we did was, we said, "Let's buy the stock back and take the company private." And we offered 45 bucks a share, which was a good premium to a stock that had been trading consistently for three months at about 32, 33 bucks a share. The next day, the stock went to 62, which proved that people said, "These guys are trying to steal the company, we don't let them do it." So, we ended up buying the company back at 62 bucks a share.

• 32:25Speaker 00

  And we kept it private, and then we sold it to Viacom for 126 bucks a share.

• 32:36Guy Raz?

  You made $3 billion off that sale.

• 32:40Speaker 00

  That's right.

• 32:41Guy Raz?

  In 2001, you sell the company to Viacom for $3 billion, probably close to the peak of BET's value. What was your thinking at that time? Did you think to yourself, "This thing isn't going to get any more valuable than it is now, we gotta cash out now"?

• 32:59Speaker 00

  The multiple of media companies at that time was a 20x EBITDA multiple. So naturally, you're looking at it, you say, "How high can it go"? Before, you know, either one, you get more competition, which drives your value down. So you, you, you look at it and you say, it's a time to sell. Plus, I had a partner, John Malone, had been in the company for 20 years. His only exit was a sale of the whole enterprise. So I had that obligation to him.

• 33:29Guy Raz?

  So what did that $500,000 get John Malone?

• 33:33Speaker 00

  John's 180, remember the 320 and the other stuff got paid back. His 180 yielded him $770 million of Viacom stock. And, you know, and, you know, I did pretty good, too.

• 33:49Guy Raz?

  And the timing was obviously impeccable because you couldn't do that today.

• 33:54Speaker 00

  I don't think BETs work for 20 times multiple today, no.

• 33:58Guy Raz?

  At that point, you become the first African-American billionaire overnight in US history. Was that, was that an important milestone for you?

• 34:15Speaker 00

  It wasn't a milestone in terms of me personally. It was a milestone in terms of achieving something that would get you the recognition and visibility that would say, if African-Americans are given an opportunity, they can prove that they can generate wealth for themselves, their family, and this country. That was the point I was trying to make. The, the goal was to say, we can play at that level exactly like white American business people could.

• 34:52Speaker 00

  If you want to change the economic discrimination and income inequality between African-Americans and white Americans, or minority Americans and white Americans, you've got to figure out a way to provide a flow of capital into the hands of entrepreneurs and others who are fully committed and fully capable of generating and maintaining wealth. That's what I do.

• 35:21Guy Raz?

  So, so let me.

• 35:26Guy Raz?

  So Bob, you are, to say the least, a complex person. You've got a lot of people in this crowd cheering for you when you say that.

• 35:36Speaker 00

  I paid for 50% of them.

• 35:37Guy Raz?

  Okay, I got you.

• 35:40Guy Raz?

  But you have said, and I'm quoting you, this is something you've said in the past. You said, quote, "I don't want to be seen as a hero to younger people or a role model for African-American youth." Do you still feel that way? I mean...

• 35:52Speaker 00

  I said that in the context of this.

• 35:59Speaker 00

  A hero or a role model for African-American kids, in my opinion, starts at home. Their mother, their father, and the people who live in their next-door neighborhood.

• 36:15Speaker 00

  It makes no sense to project your hero because you see him on television more often than you see your neighbor or your uncle who's going to work every day, struggling to survive. That's the real hero. It's the guys, Jesse Jackson used to say, "Those people who take that early bus." That's the kind of hero that they ought to focus on, so that's where I look at it.

• 36:45Guy Raz?

  We just have a couple more minutes before we have to wrap up. And I want to get these two very important questions to you. What did your folks... I know that your mother, at least your mother, lived to see your incredible success. You, coming out of this working-class home, nine brothers and sisters, to becoming one of the most successful entrepreneurs in American history, full stop, and also among the richest. What would they have made of that?

• 37:17Speaker 00

  They were very regular people. They didn't, you know... My mother used to say, you know, people would come up and say, "I know you're proud of your son." And she, you know, the line she'd come back with, "I'm proud of all my children." And that was, you know...

• 37:36Speaker 00

  That's what she would say. And if, you know, she would have a way of bringing you down or putting you in your place.

• 37:46Guy Raz?

  One final question for you, Bob. A question that I, listeners here and the folks in the audience will have been familiar with, a question I ask everyone who comes to the show. How much of your success do you ascribe to your talent and your intelligence? And how much of it is just luck?

• 38:04Speaker 00

  90% talent.

• 38:12Speaker 00

  No, not really. Here's the thing. Every entrepreneur, every entrepreneur is lucky. You call it luck, I call it grace of God. That's what I call it. There is no way the path that I took could have happened without that kind of guidance. And, you know, because all along the way, there were things way beyond my control. Just simple as this. I just happened to come of age when RCA said, "We're going to put a satellite in a geostationary

• 38:55Speaker 00

  orbit above the equator, and that satellite can beam a signal to cable headends all around the country." The guys at RCA didn't call me up and say, "Bob, are you ready? We're going to launch it." You know, it just happened. I happened to be in the right place at the right time with the right people. And some force beyond you put you there.

• 39:22Guy Raz?

  Bob Johnson, founder of BET.

• 39:32Guy Raz?

  That was my conversation with Bob Johnson, live, right here in Washington, DC, at George Washington University's listener auditorium. By the way, Bob didn't stop blazing a trail after he sold BET. He went on to buy the NBA's Charlotte Bobcats and became the first African-American owner of a major American sports franchise. Eventually, Bob sold the team to the second African-American owner in NBA history. You might have heard of him. His name is Michael Jordan.

• 40:10Guy Raz?

  Hey, thanks for listening to this special live episode of How I Built This. This episode was produced by Ramtin Arablouei, who also composed the music. Thanks also to Neve Grant, Sanaz Meshkentour, Claire Breen, and Jeff Rogers. Our intern is Diana Mustak. I'm Guy Raz, and you've been listening to How I Built This from NPR.