Speaker 1: Welcome to Strictly Business Varieties podcast featuring conversations with industry
Speaker 1: leaders about the business of entertainment. I'm Cynthia Littleton, managing
Speaker 1: editor of Television for Variety, and today my guest in
Speaker 1: Los Angeles is Byron Allen. Byron is one of the
Speaker 1: busiest entrepreneurs in show business these days. He founded his company,
Speaker 1: Entertainment Studios, in in his living room. Since then, it
Speaker 1: has expanded rapidly from syndicated programming into cable television and
Speaker 1: now independent film distribution. In this lively conversation, he takes
Speaker 1: us through his recent three hundred million dollar acquisition of
Speaker 1: the Weather Channel, his strategy in the film business, and
Speaker 1: he also talks about his controversial decision to pursue civil
Speaker 1: rights legal cases against major distributors alleging discrimination in their
Speaker 1: business practices. So, by Ron all and thank you for
Speaker 1: joining me today. Well, thank you, Cynthia Littleton, and it's
Speaker 1: good to be here and hang out with you. I'm
Speaker 1: a fan of yours. You started, So your company is
Speaker 1: called Entertainment Studios, and you started you founded the company
Speaker 1: in yes, but you have really been on a growth spurt.
Speaker 1: You really expanded quite a bit in the last three
Speaker 1: to five years. Yeah, yes, yes, I'm a fifty seven
Speaker 1: year old overnight sensation. So you know, I started the
Speaker 1: company from my dining room table five years ago. And uh,
Speaker 1: for me, it was always business show, not shill business.
Speaker 1: And I made it a point of that. You know.
Speaker 1: I started as a stand up comedian when I was
Speaker 1: fourteen years old. Fourteen years old, Uh, summer of seventy four,
Speaker 1: I think it was, it was either seventy four seventy
Speaker 1: I should know by this point. And uh, you know,
Speaker 1: my mother, I was born in Detroit, Michigan, so I
Speaker 1: come from that whole blue collar background. My dad worked
Speaker 1: at Ford Motor Company for over thirty years, and my
Speaker 1: grandfather worked at Great Lake Steel for over thirty years.
Speaker 1: And these guys, I mean, if they ever called in
Speaker 1: a day sick, I'd be shocked. And they got to
Speaker 1: work an hour early, and they always tried to figure
Speaker 1: out how to put a you know, twenty six hours
Speaker 1: in a in a twenty four hour a day, and
Speaker 1: just good guys, hard workers. And my mother and father
Speaker 1: got a divorce. Um we came, my mother and I
Speaker 1: came out here summer sixty eight to Los Angeles, to
Speaker 1: Los Angeles. Excuse me, Yes, to Los Angeles from Detroit. Um,
Speaker 1: there was you know, a lot of riots. I was
Speaker 1: gonna say, that's a heavy time Detroit and for Detroit. Right.
Speaker 1: So when Martin Luther King was assassinated, you know, uh, Detroit,
Speaker 1: the top blow off and military immediately took over my neighborhood,
Speaker 1: shut us down. Um, you know, I'm looking down the
Speaker 1: barrel of the tank troops walking on our lawns with
Speaker 1: bayonets and made it really clear if you don't get
Speaker 1: in the house, we're a shoot and kill. And um,
Speaker 1: so we thought, okay, let's go visit some family and
Speaker 1: friends in l A. And Uh, I thought it was
Speaker 1: a two week vacation and summer of sixty eight and
Speaker 1: never went home. I was seven years old at that point,
Speaker 1: and my mother who had me seventeen days after her
Speaker 1: seventeenth birthday. So I tell everybody I have too high
Speaker 1: school diplomas. My mother happens to be very beautiful and smart,
Speaker 1: and she ended up going to u c l A.
Speaker 1: And she ended up getting her master's degree and sent
Speaker 1: him a TV production at u c l A. And
Speaker 1: while raising me, she was attending school and she went
Speaker 1: to NBC and asked them, Uh, could she get a
Speaker 1: job doing anything? And they said no, and she said, well,
Speaker 1: can I be an intern? And they said, we don't
Speaker 1: have an intern program. And then she asked a very
Speaker 1: important question, will you start one with me? And they
Speaker 1: said yes. And from that she became a tour guy,
Speaker 1: and later she became a publicist working in the publicity
Speaker 1: and marketing department at NBC. And UH, when she was
Speaker 1: a tour guy, I used to go out to NBC
Speaker 1: with her and wait for her to get off work.
Speaker 1: And as a kid, I just sat and I watched
Speaker 1: them make television. And up until this point, I was
Speaker 1: going to go work with my dad at Ford Motor
Speaker 1: Company or my granddaddy at Great Lake Steel and build cars.
Speaker 1: And UH, when I saw this different kind of factory,
Speaker 1: a content factory, it changed my life and my perspective.
Speaker 1: I saw Johnny Carson tape The Tonight Show, and then
Speaker 1: I would walk across the hall and I would watch
Speaker 1: Red Fox tape Sanford and Son, and then I go
Speaker 1: around the corner and watch Freddie Prince du chic on
Speaker 1: the Man, and then the next day would be Flip
Speaker 1: Wilson doing the Flip Wilson Show, and then I go
Speaker 1: across the hall and I would watch a local sportscaster
Speaker 1: named Bryant Gumbel do the local sports and a local
Speaker 1: weather man named Pat Saj do the weather for k NBC.
Speaker 1: Then I go down the hall and watch them do
Speaker 1: a soap opera, Days of Our Lives, and I just was.
Speaker 1: I would go from studio to studio studio and watch
Speaker 1: Bob Hope and George Burns and all of these amazing, iconic,
Speaker 1: super talented people make television, and I was, I was
Speaker 1: instantly in love. And I watched the executives in NBC,
Speaker 1: Fred Silverman and Brandon Tartakov interact with the producers, George
Speaker 1: Slaughter and Jimmy Komack interact with the with the writers
Speaker 1: and the directors and the crew and the unions, and
Speaker 1: it was a symphony. And it was a symphony that
Speaker 1: I loved watching and listening to. And I thought, and
Speaker 1: I knew, right then, this is what I'm going to
Speaker 1: dedicate my life too. This is what I'm going to
Speaker 1: do until the day I die. I read one day
Speaker 1: in the New York Times that Verizon was going to
Speaker 1: spend twenty three billion dollars to bring fiber to the
Speaker 1: home and offer a hundred and fifty h D channels
Speaker 1: and compete with cable. So I went to Verizon and
Speaker 1: I said, okay, I read about your initiative and I said,
Speaker 1: I'm here to launch ten HD networks, ten of them.
Speaker 1: And they said, how many do you have now? I
Speaker 1: said zero and they were like, okay, he's cuckoo for cocopuffs,
Speaker 1: and they go, what are you thinking? I said, well,
Speaker 1: if you really want to know what I'm thinking, I
Speaker 1: think that I said, this is a huge opportunity. I said,
Speaker 1: a hundred years ago, it was the industrial revolution, and
Speaker 1: the industrial revolution was fueled by gas and oil, and
Speaker 1: today it's the digital revolution, and that this revolution is
Speaker 1: being fueled by content. And we're not very efficient, and
Speaker 1: we have to do exactly what Rockefeller did in Henry Ford.
Speaker 1: And I love and I've studied all of their moves
Speaker 1: because I just love entrepreneurs in business. It's just something
Speaker 1: that I was more into that than sports. And I said,
Speaker 1: black Rockefeller was vertically integrated. He we have to be
Speaker 1: vertically integrated. He took the oil out of the ground,
Speaker 1: put it in the pipelines, send it to the refineries,
Speaker 1: put it on the trucks, send it to the gas stations,
Speaker 1: and put it in every gas tank and made it
Speaker 1: affordable and efficient. And we have to do the same
Speaker 1: thing with content. One years later. That business mind set
Speaker 1: applies to day and I said, when I sent a crew,
Speaker 1: I said, look, my dad worked it forward. My granddaddy
Speaker 1: worked at Great Lake Steel. These guys worked twenty hours
Speaker 1: a day, but sometimes TV crews want to work two
Speaker 1: hours and try and get paid for twelve. It's a
Speaker 1: very inefficient business. And I'm here to bring that Henry
Speaker 1: forward Rockefeller efficiency to this space. So when I send
Speaker 1: a camera crew to Pebble Beach to cover the car show,
Speaker 1: concourse the elegance, I don't want them to just shoot
Speaker 1: the car show for our twenty four hour television network
Speaker 1: Cars dot TV, which we want an Emmy for and
Speaker 1: I'm very proud of. I also want them to shoot
Speaker 1: the resorts and Pebble Beach for our travel channel My
Speaker 1: Destination dot TV, Shoot the chefs up there for our
Speaker 1: cooking channel Recipe dot TV, Shoot what's going on in
Speaker 1: the pet community up there for our twenty four pet
Speaker 1: channel Pets dot TV, and shoot all the celebrities that
Speaker 1: come to the show for our entertainment channel ees dot TV,
Speaker 1: and they say, wow, that's brilliant. We've had a lot
Speaker 1: of pitches. No one's ever come to us with that
Speaker 1: point of view and that unique business model. They say,
Speaker 1: we won't give you ten networks, but we will give
Speaker 1: you six. And we made history and we launched six
Speaker 1: twenty four HD networks in a single day a little
Speaker 1: over nine years ago. And those are all of our
Speaker 1: twenty four hour networks that are on Verizon and A
Speaker 1: T and T and some of them are on Dish
Speaker 1: and Direct and you're up to eight now we have
Speaker 1: eight now, right? And so what I did was I
Speaker 1: went involve all the dot TVs about twelve years ago.
Speaker 1: It's the premium dot TVs. Uh, And I said, look
Speaker 1: the Internet. At this point it was we're in you know,
Speaker 1: we're coming out of you know, we're in dot coms.
Speaker 1: And I said, dot com is for me? Was internet?
Speaker 1: One point out it was read it? But I said, habitually,
Speaker 1: we watch more than we read. And I said, what's
Speaker 1: going to happen is we're going to have an unbelievable
Speaker 1: insatiable appetite to watch it online. So I said, dot
Speaker 1: TV represents watch it. So I started buying all of
Speaker 1: the beach front real estate. That's why we ended up
Speaker 1: with comedy dot TV and cars dot TV, pets dot TV,
Speaker 1: and we have a number of them. We haven't turned
Speaker 1: on music, dot TV, kids, dot TV, sports dot TV,
Speaker 1: news dot TV, and we'll turn them all on. And
Speaker 1: the goal is to be direct to the consumers worldwide
Speaker 1: on every device, different verticals. That's the vision, and that's
Speaker 1: been the vision since day one. So we we turned
Speaker 1: on those networks and and we we said we're gonna
Speaker 1: own all the content, shoot everything in native HD. A
Speaker 1: day crew and a night crew that produces and edits,
Speaker 1: just like at Ford Motor Company. Because when I was
Speaker 1: a kid, my mom and I used to drop my
Speaker 1: dad off at Ford Motor Company at the night crew.
Speaker 1: So I said, we will have a night crew here,
Speaker 1: so we'll have editors to go during the day, and
Speaker 1: they will have editors go at night and keep the
Speaker 1: machine going and keep making the content and make it.
Speaker 1: And what like my mentor who took the radio shows
Speaker 1: and made and made television shows, I took the magazine
Speaker 1: stand and made them twenty four hour verticals. You have
Speaker 1: plenty of car magazines, and plenty of cooking magazines, and
Speaker 1: plenty of travel magazines. There those are passion points. People
Speaker 1: will always be interested in that. And our new magazine
Speaker 1: stand is the mobile phone, not your traditional magazine. Acade ago.
Speaker 1: That's why I started buying all the dot TVs. And
Speaker 1: I said, you know, I couldn't raise money, so I said,
Speaker 1: I will finance it myself. Uh. And this is a
Speaker 1: vision that's hard to explain, and but they will eventually
Speaker 1: show up, and they will eventually start watching over the top.
Speaker 1: And we we uh launched, and then we added a
Speaker 1: seventh network. We became the largest producer of court shows
Speaker 1: and now we have six of them, and I created
Speaker 1: a twenty four hour vertical. I couldn't license the court
Speaker 1: shows to any cable network, so I said, okay, we'll
Speaker 1: just start our own one. So we started uh Justice
Speaker 1: Central dot TV and UH then someone came to me
Speaker 1: and said you should buy the Weather channel. A buddy
Speaker 1: of mine who satellites our networks and he's the largest,
Speaker 1: one of the largest in that space, satellite networks, and
Speaker 1: he said you should buy it. And he said, I
Speaker 1: used to be, uh, one of the top executives at
Speaker 1: this at the Weather Channel, and he says, people don't
Speaker 1: realize how much money it names, and they don't realize
Speaker 1: what a cash cole it is and how he goes
Speaker 1: and it fits your other seven networks perfectly. It's your model.
Speaker 1: It's a vertical into itself. It's a vertical into itself,
Speaker 1: and it's you own all the content and you're able
Speaker 1: to go on every device everywhere. We were one of
Speaker 1: the first to achieve to v everywhere, not because of
Speaker 1: the technology, but because we own the rights to our
Speaker 1: content and we were able to go on every vertical everywhere.
Speaker 1: And I looked at it and I said, you're right.
Speaker 1: He said, Look, it's owned by black Snow, who manages
Speaker 1: over four hundred and thirty five billion. It's managed its
Speaker 1: owned by Baying who manages over a hundred billion in cash,
Speaker 1: as well as Comcast, and so these are really smart,
Speaker 1: sophisticated operators sellers. And I said, I love it, So
Speaker 1: let's get into it. And we got into it. It
Speaker 1: wasn't an easy deal to get done. How long did
Speaker 1: it take you to to to work that out? Because
Speaker 1: you announced the deal in April, a three million dollar
Speaker 1: deal March twenty two. We didn't announce the deal. We
Speaker 1: did the I remember I could barely go to bed
Speaker 1: the night before because I didn't want to oversleep. And
Speaker 1: all the bankers and lawyers and I mean dozens and
Speaker 1: dozens on the phone at five am, uh, confirming everybody
Speaker 1: had all their paperwork in line, check check the wire
Speaker 1: transfer went through, and uh it was. It was at
Speaker 1: five am, and it was all done at five ten,
Speaker 1: and the wires started going through, and I think it
Speaker 1: was sixty eight different wires to various entities. We did
Speaker 1: a test run the day before of a dollar per
Speaker 1: wire to make sure all sixty eight of them worked.
Speaker 1: So I told them, I said, look at this, we
Speaker 1: haven't even closed. I'm already sixty eight bucks over budget.
Speaker 1: So all the wires went through, and after we confirmed
Speaker 1: that all the wires had gone through and everybody had
Speaker 1: gotten their share, then we announced at eight am, and uh,
Speaker 1: you know, it was great. The team did a phenomenal job.
Speaker 1: It wasn't an easy negotiation. Uh. These were some of
Speaker 1: the brightest and toughest executives and lawyers. And it tested
Speaker 1: me and it tested me. I mean at one point
Speaker 1: we had we had the deal two or three times
Speaker 1: and we lost it and it was at the end
Speaker 1: of the day. Uh was it over? Price? Was it over?
Speaker 1: It was over? Well, it was over terms, conditions, price.
Speaker 1: It was like everything. You had to go through the
Speaker 1: entire menu of everything, and it was. It was one
Speaker 1: of those things. It was. It was a marathon times ten.
Speaker 1: You had to run it and you had to just
Speaker 1: not let go. And finally this was this will be
Speaker 1: in my book. One day we had agreed on everything.
Speaker 1: I had it done for a lot less. I had
Speaker 1: the deal done, uh, for forty one million dollars less,
Speaker 1: and uh, they said, we only need one signature. And
Speaker 1: this was on a Thursday. I had signed my name
Speaker 1: two hundred times and those signatures were being held in
Speaker 1: escrow by the attorneys, and I had signed everything and
Speaker 1: everybody had signed everything except for one signature. And this
Speaker 1: was a Thursday. So I said, can we get that
Speaker 1: signature and so I can wire you this money and
Speaker 1: we can be done. And they said, yeah, we just
Speaker 1: need that one signature. You'll get it on Monday or Tuesday.
Speaker 1: And didn't come Monday, and in Tuesday, I said, where's
Speaker 1: the signature. Well, I'm ready to wire this money and
Speaker 1: on Tuesday, say we got some bad news. I go,
Speaker 1: oh yeah. I said, there's no such thing as bad
Speaker 1: news right now unless you will want to take less.
Speaker 1: And the bad news is for you. They said, no,
Speaker 1: two more bidders. Two more bidders emerged over the weekend,
Speaker 1: and they're higher than you, and one is ten million
Speaker 1: more than you, and people closing in a natal second.
Speaker 1: And they and we're sure you're really upset with us
Speaker 1: and you don't want to participate in the process. And
Speaker 1: I said that's not true. I said, I am upset,
Speaker 1: but I am going to continue because this is a decision.
Speaker 1: I can be bitter, I can be better. And they said,
Speaker 1: I said to them, give me a number that you
Speaker 1: want me to pay you, so we can end this
Speaker 1: right now. I said, here's the difference. I own my company.
Speaker 1: I don't have a board of directors. Here, no analysis, paralysis.
Speaker 1: The decision is made right here in the moment. As
Speaker 1: you tell me. You tell me the number, and I'll
Speaker 1: either say yes or no, and if it's yes, it
Speaker 1: will be done within ten minutes. And they said, I
Speaker 1: don't have a number, and I want, Oh my god,
Speaker 1: how do you not have a number. You have to
Speaker 1: give me a number. They said, no number, and then
Speaker 1: I said, and they said, we'll get back to you.
Speaker 1: And I knew what was going to happen. Next we
Speaker 1: hung up the phone. I looked at my executives and
Speaker 1: I said, and we're now going into a bidding war.
Speaker 1: So let's gear up and uh. The next morning, at
Speaker 1: six thirty five in the morning, I got an email
Speaker 1: and they said we have three interested parties. And I
Speaker 1: was one of them. Do you know who the other
Speaker 1: two were? I didn't, and and and all of my
Speaker 1: executives wanted to know, and I said, ladies and gentlemen,
Speaker 1: it doesn't matter. We have to get rid of them.
Speaker 1: So and so they said, we have three interested parties
Speaker 1: and we want best and final bids by two pm
Speaker 1: Easterom today and we're going to make a decision and
Speaker 1: sign with one of you today. So I called up
Speaker 1: and I said, well, this isn't fair. They go, why,
Speaker 1: I go, well, I know my two competitors are on
Speaker 1: the East Coast. I knew that about them. I said,
Speaker 1: so it's nine thirty five for them. They're at their
Speaker 1: desk having coffee. It's six thirty five here. I said,
Speaker 1: My people are still asleeper, waking up or getting ready,
Speaker 1: and they go, yeah, we thought about that, but we
Speaker 1: know you're awake. I go, how do you know I'm awake?
Speaker 1: They go, because you never sleep. I said, that's true.
Speaker 1: But I go, we have to get this on the
Speaker 1: same level playing field. They go, nope, you gotta get
Speaker 1: yours in by eleven am. And they said, are you in?
Speaker 1: Are you gonna go for it tonight? They go I
Speaker 1: said yeah. They go, So what do you have to say?
Speaker 1: I said, Mohammed Ali. They go, Mohammed Ali. I got
Speaker 1: those were just the two words that just came to
Speaker 1: my mind at this particular moment, Mohammed Ali. So they go,
Speaker 1: what does that mean? I said, tell the other two guys,
Speaker 1: I'm gonna hit him so hard. I'm gonna knock him
Speaker 1: out of the ring into the cheap seats like Mohammed Ali.
Speaker 1: They go, Okay, bye bye. Mohammad Ali. So I hung
Speaker 1: up the phone and then I said, what do I
Speaker 1: need to do? And I it was an instinctive thing.
Speaker 1: I said, what do I need to do? Beat these
Speaker 1: other two guys? And I don't really know who they are,
Speaker 1: but I said, what is it worth to me? The
Speaker 1: top line number, because this is a asset we must
Speaker 1: have for strategic reasons. And the number that came in
Speaker 1: mind was forty one million more than our previous bit.
Speaker 1: And so I put it up, We wrote it up,
Speaker 1: and I sent it at ten fifty nine am our time.
Speaker 1: I made it with one minute to spare, and five after,
Speaker 1: like ten minutes after eleven am, they called me up
Speaker 1: the bankers on Wall Street, the bankers on Wall Street,
Speaker 1: and you could hear like almost this crackle on their voice.
Speaker 1: Are we reading this right? I go, what are you reading?
Speaker 1: And they explained it to me and said, yes, those
Speaker 1: numbers are correct. Those are the numbers. And they went, okay,
Speaker 1: we'll get right back to you. I go, yeah, it's
Speaker 1: time to close, guys, this game is over. And we closed,
Speaker 1: and uh, and I just said, I'm not gonna let
Speaker 1: it go. And why was it an important transformative deal
Speaker 1: for us? It helped to bring along our other seven
Speaker 1: networks because our other seven networks were having a tough
Speaker 1: time getting distribution and I didn't have the average. And
Speaker 1: this is a this is a unique iconic network. This
Speaker 1: network is it's in the American homes for nearly forty years.
Speaker 1: It's the most widely distributed channel in your portfolio now,
Speaker 1: the most widely distributed homes. It's the only network that
Speaker 1: protects and saves lives. A lot of people depend on it, farmers,
Speaker 1: the government, businesses, retail. It is an extremely important information
Speaker 1: source and it's twenty four hours of weather news and
Speaker 1: it is a phenomenal, best in class asset and it
Speaker 1: will only lift our others. And uh, we immediately saw that.
Speaker 1: So we had a big negotiation right after we close
Speaker 1: and someone with millions and millions of subs, and we
Speaker 1: were we're talking about negotiation with a distributor, with a
Speaker 1: distributor with a platform for the Weather Channel. And we
Speaker 1: were able to renew the Weather Channel, and more importantly,
Speaker 1: we're able to get distribution for some of our other
Speaker 1: cable networks to leverage game. And that that was it.
Speaker 1: So that's why I said, I'm not I'm not gonna
Speaker 1: lose this. I'm gonna And I said to him, I said,
Speaker 1: be really clear, I'm not gonna lose this. This is
Speaker 1: not having I'm going to win. You can tell whoever
Speaker 1: you need to tell, but just now I'm taking this
Speaker 1: one who was the main banker that was orchestrating the
Speaker 1: deal for the sellers. They were using, Uh, Morgan Stanley
Speaker 1: and they were terrific and Morgan Stanley and they were
Speaker 1: nice that they at the end they said, wow, they said,
Speaker 1: you have been amazing every step of the way. When
Speaker 1: we thought you would get upset and step out, you didn't.
Speaker 1: You were cool, you were calm, you were focused. Uh
Speaker 1: And they were, they said, and you beat some really
Speaker 1: sophisticated players. The financing of your company and your ambitions.
Speaker 1: So you own you own entertainment studios outright. You don't
Speaker 1: have investors, do you? So you financed it with bank loans?
Speaker 1: How do you you know to enter? Seeing this company
Speaker 1: shouldn't be around today. I don't have it. I own
Speaker 1: it on not by design. I couldn't get anyone to
Speaker 1: invest in me, or to believe in my vision, or
Speaker 1: to offer me one penny. I watched a lot of
Speaker 1: people raise money, and for whatever reason, I just didn't
Speaker 1: have to access to capital. And I said, that's okay.
Speaker 1: You know, you just you do it yourself, you know,
Speaker 1: you just build it yourself. And as a kid, I
Speaker 1: would study all these iconic entrepreneurs and one of them
Speaker 1: I loved was Annenberg, Walter Walter Hannenberg and uh, publisher
Speaker 1: of TV Guide and other things, other things, and you know,
Speaker 1: he was terrific. And there's a story where you know,
Speaker 1: they wouldn't let him in the country club because he
Speaker 1: was Jewish, and and he just went and built his
Speaker 1: own magnificent, spectacular golf course that is now in Palm
Speaker 1: Springs and all the presidents have played on it. And
Speaker 1: it's just look, if they don't let you in, you
Speaker 1: built it yourself, and you make it better. And I
Speaker 1: watched a lot of brilliant, brilliant people like him and
Speaker 1: just said, that's how you play the game. And well,
Speaker 1: I couldn't raise the money. Uh. I went to Factors
Speaker 1: and the fact that we survived Factors is one of
Speaker 1: the most amazing things ever. These are companies that will
Speaker 1: lend you against your receivables, but not at great rates.
Speaker 1: At one point I was borrowing money against the world's
Speaker 1: greatest receivables receivables from Pepsi and mcdonald'son Johnson and Johnson
Speaker 1: at twenty five and twenty six interest. It's amazing that
Speaker 1: you couldn't create cash flow to have any operations. It
Speaker 1: was unbelievably challenging. It was excruciating. But I didn't have
Speaker 1: access to capital. I couldn't get investors. I couldn't get
Speaker 1: a banngalow. And they said, well, you can go to
Speaker 1: these factors. And factors were kind of creative for the
Speaker 1: garment industry. People would ship off their goods and then
Speaker 1: they would say, okay, well the story hasn't paid me
Speaker 1: yet in fact ters, but they would lend against those orders,
Speaker 1: and so they I said, well, can you please do
Speaker 1: it against this? This is coca you know, this is pepsie,
Speaker 1: this is McDonald's. They said, sure. Got paid every penny
Speaker 1: from those advertisers out of over the years, ran hundreds
Speaker 1: of millions through there maybe less than a hundred grand defaulted,
Speaker 1: maybe less than a hundred thousand defaulted out of over
Speaker 1: a hundred plus million. So then I was able to
Speaker 1: move into banking relationships. And the one thing I had,
Speaker 1: I said I had that I learned was I have
Speaker 1: to create my own bank. And my bank became internal,
Speaker 1: my own internal cash flow UM and I call it
Speaker 1: the bank of content. And every turn it's you. You
Speaker 1: have found the way around the big obstacles. The story
Speaker 1: of your mother's own experience coming to l A is
Speaker 1: very instructive in terms of where you got that entrepreneurial gene.
Speaker 1: Well you start with me, Well, you know that's it,
Speaker 1: and you know, you know, the no is when you
Speaker 1: go to work. The no is not when you shut down.
Speaker 1: And uh and I like being nimble like that, you know.
Speaker 1: When unfortunately Susan Jackson passed away. She was one of
Speaker 1: the founders of Freestyle Releasing. And I went to lunch
Speaker 1: with her business partner, Mark Boarding, and I said, you know,
Speaker 1: now that Susan's passed away, what would you like to do?
Speaker 1: You want to stay in and you want to sell?
Speaker 1: He said, I want to sell And I said how
Speaker 1: much do you want? And he gave me a number
Speaker 1: and I said done, I will buy it in Freestyle.
Speaker 1: Freestyle was an independent film distributor and that was kind
Speaker 1: of your entree into the film business, which has been
Speaker 1: an expansion for you in the last couple of years.
Speaker 1: That's exactly right. And he was taken aback and I said,
Speaker 1: I know, you're kind of surprised. I said, remember I
Speaker 1: own my company, No Analysis Paralysis. Your company is sold.
Speaker 1: He goes, well, if there's two or three other people
Speaker 1: way down the line from you. I go, how did
Speaker 1: they have? I said, have they closed? He said no.
Speaker 1: I go, well then they lost. Just call him up
Speaker 1: and let them know they lost, and just enjoy the lunch.
Speaker 1: I said, there's nothing to negotiate. You gave me a number. Yeah,
Speaker 1: I'm sure the books are clean. I'm sure that I'll
Speaker 1: get a good, clean legal opinion. Let's we're done and
Speaker 1: uh we closed and uh. And I said, what's really
Speaker 1: valuable is about this company. He's terrific Mark. But also
Speaker 1: to have a direct relationship with all the movie theaters.
Speaker 1: I really wanted that exhibitors, all the exhibitors, just like
Speaker 1: I have a direct relationship with all the TV stations
Speaker 1: and I have a direct relationship with all of the advertisers.
Speaker 1: I said, I really want that direct relationship with them,
Speaker 1: all the exhibitors. And he also had an output deal
Speaker 1: with Netflix that pays us on box office performance. And
Speaker 1: they pretty much only have two of those deals, one
Speaker 1: with us and one with the Walt Disney Company. And
Speaker 1: I said, I'm gonna supersize this. And uh. I started
Speaker 1: studying box Office Mojo because I love the numbers. And
Speaker 1: I said, you know, I've studied hundreds and hundreds of movies,
Speaker 1: and I noticed the one type of movie that's never
Speaker 1: failed is a shark movie. And uh, and I said,
Speaker 1: I want a shark movie. I want a shark movie
Speaker 1: to be our first movie because I can't find one
Speaker 1: that's failed. And they said, well, you know, the Weinsteins
Speaker 1: have a shark movie that they're not going to be
Speaker 1: putting out wide because they're short on cash because of
Speaker 1: the Hateful Eight didn't do as well as they had
Speaker 1: holped and I said, okay, I said let's go get it.
Speaker 1: And they said what should we offer him? And I said,
Speaker 1: we'll go off from two million bucks. So our head
Speaker 1: of acquisitions went to Bob Weinstein and Bob, it's like,
Speaker 1: get out of here, Get out of here. And then
Speaker 1: I said, what's going on with that shark movie. They said,
Speaker 1: Bob won't sell it totes at that price. I saw it. Well,
Speaker 1: he's my neighbor out in Malibu. He literally is like
Speaker 1: eight doors now, and I'll go up on his deck
Speaker 1: and we'll get something done. So I walked down on
Speaker 1: the weekend. I walked down to his deck and said, Bob,
Speaker 1: it's by right now, and I want to get something
Speaker 1: done on the on the Shark movie. And he looked
Speaker 1: at me and says, do you have any money? I
Speaker 1: said yes. He says, well, have a seat. And so
Speaker 1: he says, what are you thinking? And I said, I'm
Speaker 1: thinking we should get this done at two million bucks.
Speaker 1: He says, I already told you're got to get out
Speaker 1: of here with that two million bucks. I go two
Speaker 1: and a half buck. He goes. No. He goes, I
Speaker 1: want something with a three in front of it. I said, okay,
Speaker 1: three bucks. He goes, and more zeros, I said, And
Speaker 1: I said, I said okay, um, let's do it. Let's
Speaker 1: do it. And I get up to leave and he goes.
Speaker 1: He goes, I want some schmuck insurance. And I had
Speaker 1: to sit back down. I go, Bob, what do you mean,
Speaker 1: what do you mean? What is schmuck? What what schmuck insurance?
Speaker 1: Do you want? Bob? He goes, He goes, I want
Speaker 1: two percent of the back end. He goes, two percent
Speaker 1: of back end, goes, what does it matter? Just give
Speaker 1: me two percent of back in. I said, okay, Bob,
Speaker 1: and I'm gonna say something to you no one's ever
Speaker 1: said to you before. He goes, yeah, right, I said,
Speaker 1: I'm not gonna give you two percent of back in
Speaker 1: I'm gonna give you two percent of every dollar I collect,
Speaker 1: two percent of micros. He goes what I said, Bob,
Speaker 1: I don't want to sit across the table from you,
Speaker 1: going over receipts and trying to explain to you why
Speaker 1: I spend so much money on hair and makeup or
Speaker 1: whatever it is from Mandy Moore and Claire Holt. I'm
Speaker 1: not going to have that conversation with you. This is
Speaker 1: one movie. I'm gonna put out a hundred plus movies
Speaker 1: over the next seven years. We're not going to get
Speaker 1: rich off of this movie. This is a marathon, not
Speaker 1: a sprint. You are an excellent film producer. I want
Speaker 1: you to call me first when you have something you
Speaker 1: think is gonna make money. So this two percent i'm
Speaker 1: giving you is two percent to say, let's go on
Speaker 1: a long journey together and do it the right way.
Speaker 1: Entertainment Studios Motion Pictures has been very active picking up
Speaker 1: picking up titles at festivals, documentaries, animation. You really seem
Speaker 1: to be building up portfolio. Yes. Yes. When I met
Speaker 1: my wife seventeen eighteen years ago, and uh, she said,
Speaker 1: what are you doing with your life and I'm building
Speaker 1: the world's biggest media company. And she was like, okay,
Speaker 1: well you're kind of cute and now I know you're crazy.
Speaker 1: So you know, that was it. I said. You know,
Speaker 1: I'm not about it's not about what I like. It's
Speaker 1: what does the world want. I'm feeding them what they want.
Speaker 1: So it's all of that documentaries, animation, action pictures, traumas, comedies.
Speaker 1: And I love it, Cynthia, I love it. I love
Speaker 1: you know, for me, every day is a play date
Speaker 1: with the world, and you just wake up and you
Speaker 1: go and you play, and you just you just pursue
Speaker 1: your love, pursue your passion. So for us, we are
Speaker 1: I'm gonna I want to get to the point where
Speaker 1: we're putting out twenty four movies a year. That's ambitious.
Speaker 1: That's a that's a big slate. By this by the
Speaker 1: standard of a student of a major studio, it is.
Speaker 1: It is very ambitious. Its just like saying, hey, I
Speaker 1: want to own HD Networks and uh forty one television
Speaker 1: shows and and basically we control where the you know,
Speaker 1: it's probably the largest collection of time periods on broadcast
Speaker 1: television stations. We control thousands of hours on TVs, syndication
Speaker 1: syndicate asian Um. For us, these are very unique times.
Speaker 1: This is not a space where you want to be small.
Speaker 1: This is a space where you want to be big
Speaker 1: and get bigger, and be bigger and continue to be bigger,
Speaker 1: or else you will get flushed out of the system. Uh.
Speaker 1: I don't have a fear of about being ambitious. I
Speaker 1: have a fear about not being ambitious enough because you
Speaker 1: don't want to wake up and you're just too small.
Speaker 1: That is if I have any fear, that's the fear
Speaker 1: being too ambitious or being ambitious. That's the asset. Don't
Speaker 1: wake up and find you're too small or you're done.
Speaker 1: Let me ask you a couple of years ago, you
Speaker 1: took a controversial step. You filed some very high profile
Speaker 1: lawsuits against the biggest distributors in television, Comcast, Charter, Direct TV,
Speaker 1: and you accuse them of exhibiting racial bias in not
Speaker 1: negotiating with you in carriage deals on your on your
Speaker 1: HD television networks. Can you tell me about what motivated
Speaker 1: that and do you feel like it was it was
Speaker 1: a successful path for entertainment studios? Yes to take Yes,
Speaker 1: so the matter with a T and T has been resolved. So, um,
Speaker 1: we wish a T and T extremely well. Um the lawsuit,
Speaker 1: the twenty billion against Comcast and the twenty billion against Charter,
Speaker 1: I'm sorry, the ten billion against Charter are still in
Speaker 1: the court and they're in the nine Circuit, and I'm
Speaker 1: highly confident we will prevail. So I'm not a lititious person.
Speaker 1: I had not sued anyone before the Obama administration came
Speaker 1: to me and said, Hey, Comcast, Charter, blah blah blah, Time,
Speaker 1: Warner Cable, these guys want to get bigger. Are they
Speaker 1: good corporate citizens? And will you them to d C
Speaker 1: and talk to the d o J and the f
Speaker 1: c C. And I said sure. So I go to
Speaker 1: the to d C and I sit with the Department
Speaker 1: of Justice and eighteen lawyers taking notes and I'm sitting
Speaker 1: with them and hour after hour and talking with them
Speaker 1: and the FCC, and they said, are they good corporate citizen?
Speaker 1: As I said, the answer is not know. The answer
Speaker 1: is hell now and you know that. And they said, well,
Speaker 1: what's you're thinking. I said, well, I said, they spend
Speaker 1: as an industry seventy billion a year licensing cable networks.
Speaker 1: Not one penny goes to African American ownership, not to
Speaker 1: be confused with targeted ownership. I also said, why don't
Speaker 1: you just look at the board of directors at Charter.
Speaker 1: They have eleven white guys on their board. Eleven white
Speaker 1: guys get together every ninety days and look around the
Speaker 1: room and say and they say, this feels right. I said,
Speaker 1: they don't even have someone who represents of the global
Speaker 1: population on their board, a woman, a woman. How do
Speaker 1: you not have at least one woman out of eleven
Speaker 1: white guys. I can't believe I'm having this conversation with
Speaker 1: you today, Department of Justice. They don't have any one
Speaker 1: that's Hispanic or Asian, or someone representing the LBGT community. Nothing.
Speaker 1: I said, you really think they should be the number
Speaker 1: two provider of broadband in America? Look at their board
Speaker 1: of eleven white guys and tell me why you think
Speaker 1: they should have the keys, I says, as a matter
Speaker 1: of fact, they don't even spend sixty seventy thousand a
Speaker 1: year to pay someone to sit in the closet and
Speaker 1: pretend to be the chief diversity officer. They don't even
Speaker 1: have a chief diversity officer, and you had me fly
Speaker 1: across the country tree to ask me if I think
Speaker 1: they're good corporate citizens. You guys need to google. I'll
Speaker 1: do it. I'm not gonna leave this for my daughters
Speaker 1: to deal with. I'm gonna deal with it for once
Speaker 1: or for all. And they said, what are you thinking
Speaker 1: about doing? I said, I'm gonna do it in a
Speaker 1: way where it can't be ignored, so we can stop
Speaker 1: the excuses and we can get it past us. I
Speaker 1: don't I don't want my daughters talking about women not
Speaker 1: being on boards and people of color not being included.
Speaker 1: I said, because in America, we don't really have a
Speaker 1: true democracy unless all of our voices are widely heard.
Speaker 1: All of our voices must be heard, not just some
Speaker 1: of them. And so I must structure it where we
Speaker 1: have a level playing field. And I'm going to do it,
Speaker 1: and I'm gonna do it in a way that's very unique.
Speaker 1: And so I said, look, here's what happens when you're
Speaker 1: a woman, or a person, a person of color, you're
Speaker 1: African American. They put the four DS on you, the
Speaker 1: four d s. First, they dismiss you, all right, that's
Speaker 1: the first D. And then you get a little frustrated
Speaker 1: by that. And so when you get a little frustrated,
Speaker 1: they discredit you. Oh look at her, she's just cranky.
Speaker 1: And then you you say, no, no, it's not true.
Speaker 1: You step up and you speak louder. It might be
Speaker 1: protest or whatever it is. Then they put that third
Speaker 1: D on you, They demonize you. And they have to
Speaker 1: do that third D to get right with their so
Speaker 1: called Christian selves, so they can do the fourth and
Speaker 1: inevitable D, which is destroy you, dismiss, discredit, demonize, destroyed.
Speaker 1: And I figured out that matrix that they use on
Speaker 1: women and people of color, and I said, I'm gonna
Speaker 1: work around that matrix. And the best way to do
Speaker 1: it is to use the legal process. And before before
Speaker 1: your experience talking to the Justice Apartment, you have had
Speaker 1: been knocking on the door but had not to talk
Speaker 1: about carrying your channels. And you've gotten no engagement, No one,
Speaker 1: No one got engagement. And what I said is the
Speaker 1: quickest way to get rid of my lawsuit is to
Speaker 1: bring in someone of color, bring in an African American
Speaker 1: and say that Byron Allen's wrong. This person owns a
Speaker 1: network on our platform. That person didn't exist before the lawsuit,
Speaker 1: and I said, you should not be in that position
Speaker 1: when you're spending seventy billion a year. And I know
Speaker 1: a hundred people who have come to you to get networks,
Speaker 1: whether it was Will Smith or Don Corneius or whoever
Speaker 1: it was, and tried to get cable networks with you.
Speaker 1: And it was no, no, no, no no. And you
Speaker 1: should not be in a position where you have five
Speaker 1: D channels and not one of them are owned by
Speaker 1: someone in the community. That's just wrong. And I'm holding
Speaker 1: you accountable. And so I said, Okay, we're gonna get
Speaker 1: around the four DS by using the ecosystem. So I
Speaker 1: paid my lawyers millions and millions of dollars and they said,
Speaker 1: let's use Civil Rights Act eighteen sixty six section the
Speaker 1: year in which it was put on the books, eighteen
Speaker 1: sixty six to protect the newly freed slaves to make
Speaker 1: sure African Americans had economic inclusion government and commercial contracting. Well,
Speaker 1: nobody even knew about the law. They forgot about it.
Speaker 1: So I took it and I put it on steroids
Speaker 1: and I said, here, here's twenty billion. Now, let's deal
Speaker 1: with it. Now, are you doing business with the community
Speaker 1: or are you not, And I said, this is something
Speaker 1: that we're going to address forever, for once and for all.
Speaker 1: And this is a rat. I'm not going to complain.
Speaker 1: I'm gonna take you to federal court, and in federal
Speaker 1: court you need to explain why you're not in business
Speaker 1: with You have Spanish language networks where the people who
Speaker 1: own them can't even speak Spanish. So we have to
Speaker 1: now start the process of being at the table right
Speaker 1: And this is a very important thing. Especially after I
Speaker 1: started having my kids, someone said to me, why does
Speaker 1: it have to be black owned? Why can't it be
Speaker 1: black targeted? And I said, okay, well, your father, you
Speaker 1: have some little girls just like me. I said, would
Speaker 1: you be okay if I control the image, the likeness,
Speaker 1: how your little girls grew up in selve themselves. Could
Speaker 1: I shape their image and their self esteem with my
Speaker 1: control of over film and TV? And are you all
Speaker 1: right with that? I have complete control over how they
Speaker 1: see themselves and whether they're beautiful or stupid, or smart,
Speaker 1: or wanted or not wanted. He goes, now, I'm not
Speaker 1: comfortable with that, And I said, why do you think
Speaker 1: I would be comfortable with that? Now that I have
Speaker 1: my girls, I'm not asking for a seat at the table.
Speaker 1: That may be clear. I'm taking a seat at the
Speaker 1: table and I'm going to be a part of that process.
Speaker 1: This is changing. The game has changed. My name is
Speaker 1: Byron Allen, and let me explain the new rules. And
Speaker 1: so when I dropped that lawsuit, it changed the game.
Speaker 1: They were like, WHOA, nobody has ever approached us this way,
Speaker 1: and so that lawsuit, those lawsuits are history and their
Speaker 1: design to address very important issues in this country. CORRECTA.
Speaker 1: Scott King was a friend of mine and I bought
Speaker 1: the rights to her life story because I wanted to
Speaker 1: look at Martin Luther King through her eyes. And she said, looked, Byron,
Speaker 1: as black people, we in this country, we had four
Speaker 1: major challenges. Number one end slavery. Number two end Jim Crow,
Speaker 1: which I think was more damaging than slavery, because when
Speaker 1: we were slaves, you know, we were considered property and valuable.
Speaker 1: When when we were free, we were considered the enemy.
Speaker 1: And that's when they said kill all black people, lynch
Speaker 1: all black people, burn all black people, because they looked
Speaker 1: at as as competitors. And then she said number three
Speaker 1: achieved civil rights. And then she choked up and she
Speaker 1: said in number four. The real reason they killed my
Speaker 1: Martin achieve economic inclusion. And she said, everybody thinks they
Speaker 1: killed him over I have a dream, But it wasn't
Speaker 1: I have a dream. The speech that got him in
Speaker 1: trouble was the other America. That's the speech that got
Speaker 1: him killed, the Other America. The speech where he was
Speaker 1: talking about economic inclusion, and he said, there are two America's.
Speaker 1: One America has access to opportunity, education, capital, that's not
Speaker 1: predatory mentorship. What does it matter if I can sit
Speaker 1: at the same lunch counter as my white counterpart and
Speaker 1: I cannot afford the same hamburger. There are two Americas,
Speaker 1: and two America's will not survive. We need one America.
Speaker 1: And so that was something and I said, I got
Speaker 1: at it. I will deal with the fourth and final chapter,
Speaker 1: economic inclusion. That is what I said told her. I said,
Speaker 1: I'll deal with that. You're right. And they killed him
Speaker 1: on the spot with the Poor People's March when he
Speaker 1: was delivering half a million poor people to the nation's
Speaker 1: capital and it was primarily poor white people, and they said,
Speaker 1: this is too powerful to deal with. And here we are,
Speaker 1: fifty years later, we don't have that economic inclusion, and
Speaker 1: so that's why I did the lawsuits. And that's also
Speaker 1: what I said to Tom Ruttlets, who runs Charter. I said, Tom,
Speaker 1: Tom said to me, when you file these lawsuits to
Speaker 1: take advantage of the merger, I said, when Charter was
Speaker 1: trying to buy the process of I mean, you know,
Speaker 1: just to be blunt, you have been accused of playing
Speaker 1: a race card at a moment when a company like
Speaker 1: Charter was vulnerable to gain carriage for your channels. That's
Speaker 1: exactly that's what they're saying. Well stated. And I said
Speaker 1: to Thomas, said, Tom, if you really want to know
Speaker 1: the truth, I'll tell you the truth. I said, you
Speaker 1: having eleven white guys on your board, no women and
Speaker 1: people of color. I have an issue with that, I said,
Speaker 1: but if you really want to look at the at
Speaker 1: the time, Stamp, I didn't sue you until I saw
Speaker 1: a photo of you in the newspaper with Al Sharpton
Speaker 1: and you said that you would signed a memorandum of
Speaker 1: understanding and m o U with Al Sharpton as to
Speaker 1: how you will be handling black people. That is when
Speaker 1: I sued you. After I saw that, And I said, Tom,
Speaker 1: who is the white man that speaks for all white people,
Speaker 1: and if that white man doesn't exist, why do you
Speaker 1: think there's a black man that speaks for all black people.
Speaker 1: The very idea of Al Sharpton, in my opinion, is racist,
Speaker 1: which is why I named Al Sharpton in the lawsuits. Tom.
Speaker 1: Black people speak for themselves. You need to treat us
Speaker 1: as equals, not as these natives that have someone who
Speaker 1: speak for them. That is why I suit you. We
Speaker 1: have to change your behavior and get you to look
Speaker 1: at us and deal with us as equals and not
Speaker 1: someone that you feel superior to. Do you feel like
Speaker 1: the federal courts is that there is a real avenue
Speaker 1: for you to achieve the goals that you're trying to
Speaker 1: achieve with these suits. Yeah, I do absolutely. I think that.
Speaker 1: I think the Look, we already got our favorable ruling
Speaker 1: against Charter. Judge wool and Federal Court Downtown ruled in
Speaker 1: our favor seventeen page ruling that this lawsuit is to
Speaker 1: go forward. They're uh, the Charter lawyers put on their
Speaker 1: adult diapers and immediately filed for interlocutory appeal on the spot.
Speaker 1: And that's how we ended up in the Ninth Circuit
Speaker 1: and we're gonna go to the Ninth Circuit. We're gonna
Speaker 1: win there, and then we're gonna go back to Federal Court.
Speaker 1: We're gonna to win there, and then we're gonna go
Speaker 1: to the Supreme Court and we're gonna win there. And
Speaker 1: you know what's gonna happen. Then corporate America is going
Speaker 1: to start doing business with all Americans, including African Americans
Speaker 1: who have been the furthest left behind. See, this is
Speaker 1: all a part of what I call economic genocide. When
Speaker 1: you don't have access to a proper education and capital,
Speaker 1: that's not predatory, but you have access to plenty a
Speaker 1: plenty of guns, drugs and alcohol, you end up in
Speaker 1: a war zone and you die from the drugs, the alcohol,
Speaker 1: the hopelessness, and the violence. But this is what America
Speaker 1: needs to do to go to the next level. We
Speaker 1: are only three hundred and twenty seven million people out
Speaker 1: of a global population of seven billion, were less than
Speaker 1: five percent of the country. Half the women in this
Speaker 1: country live at or below the poverty line. If the
Speaker 1: women fail, so will the children. China has over two
Speaker 1: hundred million kids in college. China has over two hundred
Speaker 1: million kids in college. Two thirds of our nation is
Speaker 1: in college, developing intellectual capital at a much faster rate
Speaker 1: than we are. The women must succeed. We must position
Speaker 1: every American to unleash their greatest potential. In order for
Speaker 1: us to continue to compete on a global level, all
Speaker 1: Americans must be positioned to succeed, to bring the A game,
Speaker 1: to have a truly great America, a greater America. There
Speaker 1: is no more. It doesn't work anymore to leave half
Speaker 1: of us behind. We must position everyone to succeed, and
Speaker 1: this these lawsuits start that process of economic conclusion and opportunity.
Speaker 1: Thanks for listening. Be sure to join us next week
Speaker 1: for another episode of Strictly Business.