Word: bets
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Dates: during 1990-1999
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Johnson, who controls a majority of BET's voting stock, now has a thorny problem: sweetening his offer will siphon capital from BET's planned expansion. On the other hand, since he has essentially put the company up for sale, a failure to raise the bid might tempt deep-pocketed media giants like NBC or Disney to make a bid. Johnson is adamant that he won't cede control. Says he: "I will not give up my stake. Never. Why should I, when I can make this company grow so much larger...
Rags-to-riches stories don't come any better than Robert Johnson's. The ninth of 10 children, he grew up poor in Freeport, Ill., earned a place at Princeton and worked as a cable-industry lobbyist. He founded BET in 1980 with $15,000 in borrowed money, convinced he could mine gold from ore that others had found less rich. Marketers have known forever that black consumers have a ton of money at their disposal--$425 billion annually--and are quality conscious and extremely brand loyal. Johnson not only created a brand, BET (Black Entertainment Television...
...BET shows are an eclectic if often insipid mix of music videos, infomercials and reruns of sitcoms such as Sanford and Son, along with talk and news shows produced in-house. But the programming comes dirt cheap. Profit margins currently run in the 50% range, in contrast to about 35% for many cable companies. The network already reaches 98% of all black cable homes, so future growth will have to come from new ventures. For example, the BET on Jazz cable channel, which features live performances, has more than 2 million domestic and 300,000 foreign subscribers...
Johnson plans to make BET into what marketers call an umbrella brand, under which any number of businesses can shelter. The first BET SoundStage restaurant, a black version of the Hard Rock Cafe, is already a profitable attraction in suburban Washington. The next one opens at Disney World in Orlando, Fla., in May. Johnson says he may open as many as 20 SoundStages around the country, and take the chain public...
Next stop is Las Vegas. Nevada recently granted BET a gaming license. With Hilton as a partner, Johnson plans to open a $200 million SoundStage Hotel and Casino. Hilton will run the operations while BET enlists top black entertainment. There are also MSBET, the company's Website venture with Microsoft; a line of clothing launched in February; and a BET Visa card. Johnson may even try to market home mortgages under the BET brand...