The man is seriously doing his thing...
BET founder looking for a bank
By Luisa Beltran, CBS.MarketWatch.com
Last Update: 4:28 AM ET June 21, 2003
NEW YORK (CBS.MW) -- Robert Johnson, the billionaire founder of Black Entertainment Television, is looking to branch out. But this time he wants to take control of Independence Federal Savings Bank.
Johnson currently owns slightly more than 3 percent of Independence, one of the nation's largest African-American-owned businesses.
"There is a need for a strong, aggressive lending institution that will target African-Americans for home ownership loans, student college loans and some commercial lending," Johnson said. "Independence Federal provides a great foundation for that business opportunity."
If he gets a chance to peek at the bank's financials, Johnson said he might take a controlling stake in Washington-based Independence(IFSB: news, chart, profile) or acquire additional shares. Johnson, who sold BET to Viacom in 2001, said he has yet to begin official negotiations with bank.
Listen to an interview with Johnson (requires Yahoo Platinum subscription)
In January, Independence retained Keefe, Bruyette & Woods as its investment bank. The news caused many to consider the Independence on the block; its stock soared 43 percent.
Johnson isn't the only one with an interest in Independence. In March, Morton Bender, who controls nearby Colombo Bank, succeeded in placing two of his directors to Independence's board.
Bender, who has a near 10 percent stake in Independence, filed in March with the Office of Thrift Supervision to merge the bank with Colombo. He has also asked the OTS for permission to acquire up to 90 percent of Independence.
"I think they are terribly mismanaged and they are not serving the community they started out to serve," Bender said.
The bank has reportedly dismissed its CEO and President Donna Shuler. Independence could not be reached for comment.
Bender pointed to Independence's recent opening of a branch in Chevy Chase, Md., which is predominately white and affluent. "I do more for minority community than they do," he said.
Bender said that if he attained control of the bank he would open up branches in southeast and northeast Washington, which is predominantly minority.
An Independence spokeswoman declined to comment on a possible sale. The bank hired Keefe, Bruyette in January to "fill in all dots and dashes," she said.
Shares of Independence dropped 55 cents to $17.50 Friday.
A Jordan possibility
Since selling BET for $3 billion, Johnson has expanded into various areas, including hotels and the National Basketball Association. Recently he launched the expansion franchise, the Charlotte Bobcats, which will begin playing in September 2004.
"That's the name," Johnson told CBS.MarketWatch.com.
The women's team, the Charlotte Sting, are already playing and doing well, he said.
Johnson is friends with Michael Jordan, who retired from the Washington Wizards. Johnson has invited him to join him in Charlotte but Jordan is believed to be heading to the Milwaukee Bucks.
One of the world's most famous athletes, Jordan is looking to buy a team and has said he would only return to the front-office if he had full decision-making power.
"In Charlotte, he would certainly have full decision making power about basketball activities," Johnson said.
But not ownership.
Jordan and Johnson speak quite often and the two will talk in a few days to discuss Jordan's plans, he said.
Over two years ago, Johnson announced the sale of BET, the company he founded, to Viacom(VIA: news, chart, profile) (VIA.B: news, chart, profile)for $3 billion. At the time, some were worried that Viacom would change the Washington-based BET, which has branched out into film, book publishing and events.
Viacom is not involved in BET's strategic decisions, programming activities or personnel. Instead, BET President and Chief Operating Officer Debra Lee and her programming team direct the vision of the channel, Johnson said.
BET also benefits from its Viacom ties, he said. The cable channel's news programming is co-produced by CBS News and BET is acquiring programs, such as "The Parkers" and "Girlfriends," from Paramount Productions.
"BET is still running on the track that we ran on before which is to be the pre-eminent, dominant media targeting African-Americans," Johnson said.
Because of the BET sale, Johnson is the second largest individual shareholder in Viacom, behind Chairman Sumner Redstone. (Viacom is also a significant investor in Marketwatch, the publisher of this report.)
However the cable channel, which is known for its rap and hip-hop videos featuring fast cars and scantily clad women, continues to draw criticism for catering to a young audience.
Earlier this week, Johnson lashed out at comments from a TV One executive who said BET does not target adult African-Americans. TV One, which says it is targeting African-American ages 24-54, is a joint venture from Comcast (CMCSK: news, chart, profile) and Radio One. Read the TV One exec's interview.
"BET reaches the broad African-American demographic of young, old, rich, poor, urban or suburban," Johnson said. "BET is a broad based network that appeals to adults as well as old people."
With 74 million subscribers, BET the cable channel continues to gain in viewers. But Johnson admitted that BET.com has failed to reach the economic levels they had expected.
He is happy with the site's content, which currently feature ads for BET's third annual award show on June 24, as well as links to its news, movies and issues sections.
"BET.com has not, like other dot-com investments, reached the economic level we had hoped when we launched it," he said. "We are constantly looking for ways to generate ad revenue or e-commerce. To date we have not found a solution."
At 57 years of age, Johnson said he owes much to his friend John Malone, whose former company TCI originally funded BET. "He is someone I owe a great deal to," Johnson said. "I consider him one of the biggest influences of my life in the business."
At the time of the BET sale, Malone's Liberty Media owned 35 percent of the company. The deal had been expected to fill a gap in Liberty (L: news, chart, profile)'s holdings. The media company currently owns less than 1 percent of Viacom stock, as of March 31.
Shares of Viacom added 11 cents to $45.10 while Liberty dropped 23 cents to $11.42 Friday.
Luisa Beltran is a reporter for CBS.MarketWatch.com in New York.
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