Whether it’s a hurricane that hits cities along the Gulf Coast or a blizzard blanketing the Midwest, 70 million viewers religiously tune in to The Weather Channel to get round-the-clock updates, information on the areas where loved ones are located, and tips to keep their families out of harm’s way. With its continuous coverage of natural disasters in recent years, from the devastating effects of Hurricane Sandy in 2012 to the overwhelming loss of life and property caused by the triple threat of Hurricanes Harvey, Irma, and Maria last year, the network had been designated “The TV News Brand of the Year’’ for eight straight years by the Harris Poll.
On March 22, 2018, an announcement about the network’s future had all the historic impact of a tsunami. A force of nature in the media world, Byron Allen created shockwaves with his acquisition of The Weather Group, the network’s parent company, for a whopping $300 million from mammoth private equity firm The Blackstone Group, global investment firm Bain Capital, and monolithic Comcast/NBCUniversal. As such, the transaction continues the transformation of Allen’s Entertainment Studios (ES), which has grown from a single nationally syndicated TV show into a global juggernaut.
“The Weather Channel is a very unique asset. It’s the perfect asset for us and who we are,” asserts Allen. “It’s the largest cable network not owned by a conglomerate. It’s a cash cow that makes hundreds of millions of dollars. And it is the only cable network that protects and saves lives.”
“I’m Not Going to Play Just in the Negro Leagues”
In closing the deal, the comedian-turned-mogul also wrote a new chapter in black business history. “With that purchase, we were able to break the color barrier as the first general market cable network ever owned by an African American,” he asserts. “I’ve always thought of business as a contact sport. I’m not going to play just in the Negro Leagues. I’m always going to play in the global leagues. And I want kids who look like me to not put themselves in a box. I want them to see what I do as a beacon.”
In a Culver City, California, studio on a mild day in late May, uproarious laughter and thunderous applause from a 350-person audience consume the brightly lit, multi-hued set of the game show Funny You Should Ask. A panel of stand-up comedians and comedic actors who came to fame in the 1980s—including Howie Mandel, Louie Anderson, and Jackée Harry—trade jokes as they help contestants win cash and prizes by answering questions ranging from history to pop culture. During the back-to-back taping of five episodes, Allen participates in all aspects of the production: fielding questions, serving as hype man to fire up the audience, and writing jokes on the spot. He’s also taking care of business by checking emails between takes and managing business calls during breaks.
The show is another vehicle of ES, the ever-expanding production and distribution company with eight HD networks, more than 40 first-run syndicated shows, a film distribution arm, and a podcast network. In growth mode, it currently has an insatiable appetite for acquisitions to grow its portfolio of media offerings. Even though Allen doesn’t confirm revenue figures, he does share, however, that he is its sole shareholder. “I own 100% of my company not by choice. I own 100% because I could not find investors,” he says. “So what I had to do was to learn how to build it the old-fashioned way, brick by brick. Self-financing—that’s how it had to be done.”
Consider the 57-year-old Allen as a stealth media titan. Known for decades by industry insiders, he has not had the same public profile as other super-powered entertainment honchos like Oprah Winfrey, Tyler Perry, and Mark Burnett. That is, until now.
Over the past 25 years, Allen has developed programming by catering to specific market segments based on demographic,psychographic, and behavioral data. “When I started my company, I took the magazine stand and I converted them into television shows. Entertainers was our first one. That’s like Entertainment Weekly. The American Athlete was Sports Illustrated. You got Recipe.TV, Gourmet magazine. I just went down the line,” he says. “I took what I knew people would always be passionate about that was on the magazine stand. They would always be passionate about cars. Car lovers will be here until the end of time. We owned a 24-hour car network that won an Emmy. Pets.TV. There are more pets in America than people. We have 327 million people in this beautiful country and about 380 million pets. But we didn’t have a 24-hour network about pet health and pet care.”
Influence of Earlier Black Moguls
His business aspirations have been fueled, in part, by his early exposure to BE 100s CEOs, especially icons like the late Ebony/Jet founder and publisher John H. Johnson, and Motown Industries Chairman Berry Gordy, who hails from his native Detroit. “I grew up with black enterprise on my coffee table, and every year I looked forward to the top 100. It was such inspiration to read about all these African American entrepreneurs and all the businesses that we were in.” He appears well on his way to joining that exclusive club.
Allen’s entrepreneurial journey began in the Motor City, where 17-year-old Carolyn Folks gave birth to the future mogul in 1961. After the assassination of civil rights leader Martin Luther King Jr. in 1968 stirred unrest in Detroit, Folks and her child packed their bags for a vacation in Los Angeles and eventually relocated there.
Folks attended UCLA, earning an undergraduate degree in theater arts and a master’s degree in cinema/TV production. Her persistence would eventually land her a job as a page at NBC’s Burbank Studios—and served as the pathway for young Allen to enter the entertainment arena. Waiting for his mother to get off work, he would gain an informal education, roaming the lot to see how Johnny Carson produced The Tonight Show or how Redd Foxx brought the cantankerous junk-dealing character Fred Sanford to life on Sanford & Son, for which he wrote a spec script as a teenager. Moreover, he glimpsed negotiations between studio execs and producers.
Although underage, the 14-year-old was making valuable contacts and receiving advice from comics like Gabriel Kaplan, who created and starred in the sitcom hit, Welcome Back Kotter. That conversation positioned him to do stand-up at The Comedy Store, the legendary club that launched generations of top talent, and eventually write material for Jimmy “J.J.” Walker of Good Times fame for $25 a joke. Among the writers he worked with were late night TV hosts in the making David Letterman and Jay Leno.
“He was very focused. He was driven,” says Folks, who would become a publicist at the network. “He was constantly writing and then when I’d come home, he would want to try his material out and ask “What do you think about this?’”
The “Real People” Years
Allen had a knack for comedic and career timing. After achieving the milestone of being the youngest comedian to appear on The Tonight Show at 18, he was soon hired for his first full-time gig on broadcast television in 1979 as a co-host on the pioneering NBC reality TV show Real People. That experience would set him on the course to entrepreneurship.
During his first two seasons on the popular series, he discovered that
the other co-hosts were being paid as much as five times his salary. During contract negotiations for the third season, he asked producers to consider paying him the same rate his colleagues made during their first season. He was fired just for asking. “They told my mother, ‘You know what, he’s lucky to be working at his age,’” Allen recalls of the painful experience. “At that moment, I learned it wasn’t show business, it was business show. You need to understand the business side so you’re not at the mercy of others hiring you, firing you, and moving you through the conveyor belt like a piece of meat.”In 1981, Allen decided to take control of his destiny, positioning himself to produce his own creative vehicles. It was during this period that he went to New York to attend his first National Association of Television Program Executives (NATPE) convention. For him, the greatest benefit of his attendance at the confab was finding a mentor and a second father in the late Al Masini, the brilliant creator of popular shows such as Entertainment Tonight and Star Search. “He helped teach me the business of creating and selling television shows,” he says of the uber-producer who showed him everything from how to analyze financials to the application of emerging technology. “He really appreciated me because he could see the fire in my belly.”
While developing the ES concept, he spent roughly a decade engaged in stand-up, opening for performers like Lionel Ritchie, Dolly Parton, and Gladys Knight all across America. In doing so, he “got to know the psychology of America and how to connect.”
The Makings of a Business Tycoon
By 1993, Allen used his savings to launch his company with his mother. His dining room served as corporate headquarters and his first program, Entertainers, was initially comprised of interviews with “funny friends” such as comics Sinbad and Robert Townsend.
The fledgling entrepreneur would spend countless hours trying to get his program on air by making cold calls to all 1,300 commercial television stations in the country. His pitch was to develop “barter agreements” in which stations would get his show for free but split 14 minutes of commercial time. Allen would keep seven minutes to sell to national advertisers while the local station would use its seven minutes to engage local advertisers such as auto dealers, community banks, and supermarkets. “After a year of sitting at my dining room table and burning holes in my dining room chair, I was able to squeeze out about 150 yeses after receiving about 40,000 nos. Tribune had said if I had gotten 85% of the country, they were going to sell my advertising—my seven minutes a week—and give me an advance of $400,000 to go into production on my show. I finally got to 90% [including] my first big clearance, the ABC affiliate in Chicago, WLS, that had given the world Oprah,” he recalls, using that breakthrough to secure the remainder of stations he needed.
But Tribune refused to sell the advertising. Allen was determined that he wouldn’t renege on delivering the program. So he pivoted, focusing on doing the national ad sales himself.
He says of those bootstrapping years: “The adversity has been the best thing to happen to me. I didn’t know how to sell. I didn’t know ad agencies, I didn’t know advertisers. I went in and out of foreclosure probably 14 times over a five-year period. My credit was so bad people didn’t want to take my cash.”
But he created a methodic system, selling advertising time industry by industry. He started with movie studios and then gradually moved to soft drinks, fast food, pharmaceuticals, packaged goods and
automotive, building his Rolodex along the way. “I have a relationship with every television station in the country and now I have a relationship with a lot of advertisers. Then I started putting another show on the air and then another,” Allen explains, increasing clearances and advertising while reinvesting earnings back into the company. “Next thing you know, I have 41 shows. Like a great black shark, I just never stopped swimming and looking for the kill.”By2005, when Verizon launched the Fios network to go toe-to-toe with satellite and cable providers, he convinced the company to give him six channels. Today, all his networks can be found there as well as DirecTV and AT&T U-Verse. Says Folks, who was involved with building the company with her son every step of the way: “He will go through a wall. He takes risks some of us wouldn’t take but he’s going to find a way to make it happen.”
Anything to Win
One advertising professional extremely impressed with Allen’s strategic thrust has been Deborah Gray-Young, a 30-year-plus veteran. When she first met Allen, she served as vice president and director of media and strategic services for E. Morris Communications, one of the nation’s largest black agencies during the 1990s and early 2000s. In fact, he credits Gray-Young’s placement of advertising on Entertainers from her largest client, Walmart, as being critical to sustaining the company during its startup days. “I found him to be intentional and focused. It was clear that he believed adamantly in his product and what he was doing,” she says. “When Byron increased the number of shows, he proved innovative by aggregating the ratings, and advertisers allowed him to do it. As his company grew, I admired the fact that he had this grand vision and literally kept it under wraps. Now, he has taken everybody by surprise. His purchase of The Weather Channel puts him in another conversation. This is what I say to people now: you cannot laugh at him anymore.”
That’s because the tenacious, outspoken Allen will do anything to win, using the courts to gain access where minorities have been denied. For example, has been locked in a $10 billion legal battle against Charter Communications, alleging discriminatory contracting practices in violation of the Civil Rights Act of 1866. Last year, ES scored a victory when the Ninth Circuit Court denied Charter’s motion to dismiss its lawsuit.
Over the years, the intrepid entrepreneur has repeatedly fought media leviathans in court as a means of achieving “economic inclusion” for black-owned businesses within the industry. “I said the cable industry was spending $70 billion a year licensing cable networks, and not one penny was going to African American ownership,” he asserts, making the point to white cable executives that he’s “going to take a seat at the table and have a say on how [his daughters and other children of color] see themselves and how the world sees them.”
Byron Allen Grows His Business With Strategic Acquisitions
Viewing ES as “a small Walt Disney Co.,” the mogul has traded organic growth for acquisitions as a means to optimize value. “It’s a part of our strategy to buy other companies,” says Allen. “We will grow our top line and EBITDA [earnings before interest, taxes, depreciation and amortization]. Once you get to a certain scale, you become very attractive to financial institutions.”
Two years ago, ES expanded its portfolio of offerings with the purchase of TheGrio, the black-owned digital news and social media platform targeted to African Americans. And last year Allen hired dynamic media executive Amy DuBois Barnett as its chief content officer and executive vice president of Digital for the entire enterprise. “We are excited about
the opportunities in digital with Entertainment Studios particularly around TheGrio brand. As we move around scaling TheGrio that’s definitely going to involve launching new verticals and acquiring new media brands,” says Barnett, who fully embraces his fast-paced, demanding yet accessible leadership style. “The really wonderful thing about Byron is that in addition to being a great businessman, he’s a conscious member of his community interested in supporting and representing African Americans. TheGrio fits into the business opportunities in digital as well as the values of Entertainment Studios.”Shark Moves
ES has also bolstered its presence in independent film distribution since acquiring Freestyle Releasing in 2015. After studying the numbers and researching the fact that shark-based thrillers never failed at the box office, Allen charged his acquisition team to buy the rights to the indie film 47 Meters Down from Dimension Films, which was set to be distributed in the DVD and video on demand markets in late summer 2016.
The initial bid of $2.5 million was rejected by Dimension Films Chairman Bob Weinstein, so Allen decided to talk directly with his Malibu neighbor. “We were out at the beach and I said, ‘Hey Bob, you got the shark movie, let’s get something done.’ After debating price, Allen upped his bid to $3 million. Weinstein responded, “I forgot you’re a comedian. You’ve got to put some more zeros on that.”
Allen sweetened the deal with an unusual offer by Hollywood standards: 2% of gross receipts so every dollar ES made, Dimension would receive 2 cents upfront.
After the two shook on the deal, however, Allen received a distressing call from Weinstein. “He said, ‘You know that movie that I sold you at the beach? It’s on trucks right now, and we’re going to start delivering the DVDs on Saturday, Sunday, and Monday to Best Buy, Target, and Walmart. It’s going to be on the shelves on Tuesday. I need you to wire me the money right now or we can’t turn the trucks around.’”
“So we literally wired the money with five minutes to spare and spent the rest of Friday afternoon turning the trucks around so they wouldn’t deliver the DVDs. Then I sat on it for one year and waited for the perfect summer day to release the film.”
Allen’s audacious move to release it in June 2017 paid off: It made $11 million on opening weekend—beating estimates by more than 250%. Moreover, the film played in theaters through October for a total gross of $44.3 million, making it last year’s biggest independent film. ES has since followed up, distributing such critically acclaimed fare as the western Hostiles and historical drama Chappaquiddick and planning to release a slate of 15 to 20 films per year.
The Weather Channel deal represents another milestone for his business empire. Folks, who was on “pins and needles,” says the closing of the deal was surreal. “It could have been 15-20 people all calling in from various parts of the world that went through that process,” she says. “It was amazing.”
The Weather Channel has also helped produce a sunny forecast for ES in terms of reach and revenues. “For us, it’s content, content, content, and distribution, distribution, distribution. We are producing content for our 24-hour networks right now,”Allen says. We have a portfolio of eight of them, including The Weather Channel. We are producing television shows and distributing them directly to the stations. We are producing and distributing and acquiring movies that go directly to theaters. I’ve always been a big believer in rule No. 1: Don’t let anybody come between you and the customer. Rule No. 2: Don’t run out of money. Rule No. 3: Don’t break rules one and two.”