BET, Say Hello To The Competition
When Alfred C. Liggins III was growing up in Washington, D.C., he would ride in the back seat of his mother's beat-up green Chevy Nova as she ferried talk show guests to and from her struggling AM radio station WOL. Without the money to hire staff, mom Catherine L. Hughes did nearly everything at WOL -- from manning the switchboard to hosting morning drive time. To save money on rent after the station's bankers repossessed her car, she and Alfred, her only child, would even sleep in the office.
Two decades later, Hughes and Liggins, now chairperson and CEO, respectively, of 67-station Radio One Inc. (ROIA ), the nation's seventh-largest radio chain, are a long way from those touch-and-go days. On Jan. 19, their TV One LLC debuts, a new cable-TV network targeting African Americans. A joint venture with No. 1 cable operator Comcast Corp., TV One is taking on the venerable Black Entertainment Network, until now the only cable channel aimed at this key audience. For Liggins, 38, it is the first step in building a multimedia empire for the Lanham (Md.)-based Radio One. "We have the opportunity to be in African American media what Univision (UVN ) has become in Hispanic media," he says.
Moving from radio into TV is a formidable challenge, but Liggins says he has a plan: Offer programming that is more adult-oriented than BET's. TV One's new shows will include a lifestyle program "Living It Up with Patti LaBelle," reality show "Gospel Challenge," featuring face-offs between gospel choirs, and a town hall program hosted by lawyer Johnnie Cochran and conservative commentator Armstrong Williams that will delve into such topics as reparations for slavery. Throw in some sit-com reruns like "Good Times," and Liggins thinks he has the goods to lure viewers from BET, something other entrepreneurs, like music impresario Quincy Jones, have attempted and failed to do in the past.
While the success of Radio One has long been associated with scrappy, outspoken founder Hughes, TV One is clearly Liggins' baby. "Alfred has taken the world of black entrepreneurship to a higher level," says Hughes, 56, the daughter of a jazz trombonist and waiter turned CPA. She says she wanted to own a radio station to give her people a voice. But her ebullient Wharton MBA son has his eyes on a different prize. "I would have gone happily ever after paying off that one radio station so I'd never be threatened by lenders again," says Hughes. "But Alfred got me to see the light: You grow or you go."
And grow they did, snapping up 66 more stations for $2 billion. The path has been bumpy on occasion. Along with other radio outfits, Radio One was accused of being influenced by independent music promoters hired by the labels. Liggins says it picks its own programming. And it was dinged in the press for handing out loans to top officers, which Liggins says was properly reported.
STRONG SUPPORT. Now Liggins is ready for the next chapter: taking on Robert L. Johnson, a personal friend and the billionaire founder of Washington-based BET, owned by media giant Viacom. Liggins first had the idea for a new channel in 1999 after he noticed blacks had one TV outlet in BET and Hispanics nearly a half-dozen. He was rebuffed repeatedly by potential partners until Comcast came knocking. From the start, Comcast founder Ralph Roberts and son, CEO Brian, took a liking to Hughes and Liggins. "The Roberts see a little of themselves in these two," says Amy Banse, a Comcast executive.
For a 40% stake, Radio One is investing $74 million over the next four years. TV One's CEO, Jonathan Rodgers, says he'll attract advertisers with more affluent viewers age 25-to-54; BET's median audience age is 21. What's more, Radio One, with revenues of about $300 million, can use knowhow from its urban radio programming to draw TV One viewers -- not to mention taking advantage of the stations it owns in 22 markets, including Los Angeles and Philadelphia, to promote the new channel. UBS (UBS ) analyst Timothy Wallace predicts the network will break even in five years or less, impressive for a startup. Even so, BET CEO Johnson, with 78 million homes receiving his channel, says: "We don't see them as competition."
Johnson may live to eat those words, especially as the feisty Liggins takes on more responsibility. Today, whenever her son starts a new project, Hughes jokes that he's "throwing Mama from the train." But she acknowledges, too, that it's time to start letting go. "In a family business, often a parent doesn't know when to move out of the way, and that stifles the growth of the company," she says. With TV One, Liggins takes flight -- if only to feather the nest that launched him.
By Catherine Yang in Lanham, Md.