may have to take care of the needs of certain family members since it’s being run on their behalf–they may have to take money out of it. Three, if the founder wants to continue living a certain lifestyle while he owns the company–even though he’s no longer running it–that’s money not available for investments in new products or new marketing. So, if you’re running a company for shareholder value and not as a family [asset], you run it differently.
How have you attracted blue-chip partners and managed those relationships?
Blue-chip partners come to people who have established themselves as a brand that has a certain meaning to it. So the people who do business with me say, “Bob Johnson is a successful African American businessman. He knows how to create value and he’s had relationships with white companies that we know and respect.” Unfortunately for many African American entrepreneurs, most blue-chip companies only know one and a-half black people. So, four factors drive people to make deals with me. One, if I go into business with Bob Johnson, everybody is going to look at me and say that’s a pretty smart deal, so I’m going to get validated. Two, the second thing they are going to say is, this guy is coming into the deal with his own money, so he’s bringing the same kind of value equation that I am. So I’m not necessarily doing something out of the goodness of my heart–this is a business deal. Three, he has proved that he can attract talented people that create economic returns. Four, he is a minority, for which we can get political, social, and moral benefit.
Are you positioning RLJ to go public?
I think RLJ could be a publicly traded company. And as you know, I am not afraid of operating a publicly traded company. It is sort of a natural exit strategy. Another exit strategy is being acquired by a major financial firm. It’s sort of what happened with BET and Viacom. I am not running a family busi
ness to pass down to my 17-year-old son. I’m running this business for maximization of value.
After BET, you acquired hotels, created financial partnerships, and bought a basketball franchise. What attracts you to certain industries?
A lot of what I do is driven by my belief that I know the people in the industry well enough that they would want to share in my vision. In other words, I feel I can find the right strategic partner. So, part of my reason for getting into the hotel business was I’ve been on the board of directors of Hilton Hotels for 12 years. The CEO, who I knew and liked and respected, came to me and said, “Bob, you ever thought about owning hotels?” I said, “No, I never thought about it.” He said, “Well look, we’ve got six hotels for sale that we’re going to bundle up. We’ll put them in a package for you, and you can buy them.”
What are some other factors