Another one sold...

Focusing on the Future
by Roland S. Martin, Staff Writer

The announcement this week that the corporate parent of Essence Magazine was selling the company to magazine behemoth Time Inc. was the latest example of Black media companies being purchased by non-Black firms.

A little more than five years after BET was sold to Viacom for $3.3 billion, the founder of Essence Communications, Ed Lewis, decided that in order for the magazine to grow and prosper, it needed to be with a company such as Time Warner, even if that means the nation's second-largest Black magazine would no longer be owned by African Americans.

Lewis spoke to Chicago Defender Executive Editor Roland S. Martin on Thursday when he filled in for Cliff Kelley on The Cliff Kelley Show on WVON-AM/1450.

CD: Everyone is talking about Essence no longer being a Black-owned company. Earl Graves released a statement saying he felt it was unfortunate that Essence did not give other Blacks an opportunity to bid on the company. Why did you make the decision, after almost 35 years, to sell Essence?

Lewis: There are a number of reasons why I made this decision. When I entered into a relationship with Time back in October 2000, I began to realize the many advantages that the partnership has provided the company. We've had a wonderful, productive relationship for the past four years. Because of these advantages in terms of increased resources, and opportunities not only for our people and our products I felt that long-term, with respect to providing even more opportunities and more products for our community, specifically African American women, I wanted to be with an organization that would provide that kind of result.

Just remember too from the standpoint of what is changing, is really no change since it's always going to provide the kind of articles that inspire and empower Black women. The leadership of the magazine, from the standpoint of Susan Taylor, will continue to be the editorial director; Diane Weathers the editor-in-chief; I will
continue as chairman and founder, and Essence will continue to be what its always been.

CD: But you do understand the emotion people have that it's not a Black-owned company; that you are no longer the final authority as it relates to what is done with Essence.

Lewis: I beg to differ from the standpoint of being the final authority. Time, Inc. would not have wanted to participate with us unless they felt very comfortable with the content of the magazine. It is no desire to change what has been a rock solid mega-brand, which we have done for over 35 years. And from the standpoint of the editorial of the magazine, it's always going to be the same because that's what's most important with regard to how we disseminate the kind of information that African American women want.

The world has changed from the standpoint of what's happened over the last 35 years, and I want to be in a position to offer greater opportunities, greater products to our audience than I would have been able to do if I would had continued to be alone as a standalone company.

CD: As it relates to targeting other people, was there ever any point even before you sold the initial 49 percent to Time Inc. where you had conversations with either Earl Graves (Black Enterprise founder) about partnering or even Johnson Publications, which is actually an investor in Essence. Was there any conversation about those two Black-owned companies actually gaining majority control of Essence. And if not, why?

Lewis: No, there was not. The Johnson family have been longtime investors in Essence, which we've been very appreciative of. There have been other individuals and companies over the years that have had desires of wanting to have a relationship with us. But we felt from the standpoint of resources that Time Inc. could provide, for Essence, was just extraordinary, in terms of being part of one of the most respected magazine groups in the world. And just remember, too, that the chief executive of Time Warner is Dick Parsons. And Dick Parsons is an African American. And so we need to feel hopefully comfortable about this decision, and trust me, Essence is always going to be the same.

CD: How much money did you launch Essence with?

Lewis: (Laughing) My God, we put a business plan together, we tried to raise $1.5 million, we made many presentations on Wall Street, but all we raised was $130,000.

CD: The reason I raised that question is because what a lof of Black business owners have been saying is, Wait a minute. We raised money, I put my money into it, the blood sweat and tears, we had difficulty meeting payroll, all the stuff that businesses go through, why can't I enjoy the fruits of my labor and be able to sell a company at its maximum value where I can then pass that money onto my heirs, or allow me to invest that money in other types of businesses. Was that also one of the prevailing thoughts as well?

Lewis: Absolutely. I want to be able to do more. I've always tried to do what I thought was in the best interest of the magazine, my employees and our people. And I want to be able to provide even more opportunities for our people, do more things in our community, and I'm going to be able to do that because I've made this decision with respect to selling the controlling interest to Time Warner.

CD: I also understand that there were 28 major investors in Essence.

Lewis: We have 28 shareholders.

CD: That, was it a unanimous decision by those shareholders or with you as the largest single shareholder, was it your decision?

Lewis: It's a decision that was made by the board of directors that represents the shareholders and we all feel very, very good that the shareholders will all be in agreement with regard to this decision.

CD: And was that board decision a unanimous decision?

Lewis: Absolutely.

CD: The next step is you take this to the entire body of shareholders.

Lewis: Yes. We now take this to the shareholders and they will make a decision, and we hope to conclude the deal by the 31st of January or certainly by the second week of February.

CD: You obviously released the press release, but if a majority of the shareholders do not approve the sale, obviously that's not what you are planning for but that is still a possibility?

Lewis: Totally unlikely because the majority of the shareholders have already approved it.

CD: Is it a serious dilemma for Black business owners to go through the emotional issues of whether or not it's Black-owned and why should you sell it, and you have turned your back on the community, because we have heard that before when business owners in other industries have had to endure the same type of situation.

Lewis: I really believe that we should be able to do the same things as our white counterparts. If we start our businesses and we see opportunities for growth and expansion and we can strike the right kinds of deals in terms of making sure that they are going to work, why not be able to have that opportunity to do that. The other thing that I want to make very clear is that I take personal responsibility for the continuing success of Essence. And I want more than anything, that it's future is going to be secured; that the legacy of African American women is going to be protected and nurtured for generations to come, and that's what I wanted to do to make sure that African American will always have their own voice; that they will always be empowered with regard to who they are; and this aggregation of an audience and buying power is unstoppable.

The other thing is that the thing that I want people to understand and appreciate is we are currently in the Time Square area. We are going to be moving to the Sports Illustrated Building, which is on 50th Street here. The building is going to be
renamed Essence. I don't know of too many magazines that have their own name on their building, certainly not here in New York. We're going to be the only African American magazine that's going to have its own building called Essence. That says a great deal about how they feel about what Essence means, the respect that Essence has within the community, for it to have its own building in Manhatttan.

CD: As it relates to this ownership of media properties, I've always used the example that when there are coups across the world and there is a change in power, typically the military is the first to be put under command of that dictator, new president or revolutionary. But the second thing they always tend to go after are the newspapers, television stations and radio stations, which I've always said shows the power of the media

Lewis: Yes.

CD: And what so many people are saying is that by us not controlling our own representation of who we are; by not being able to own newspapers, radio stations and TV stations, we are in essence no pun intended, placing the trust of how we are presented in the hands of someone who does not necessarily look like us. Your thoughts on that.

Lewis: My thoughts are that my starting Essence and my colleagues when we did 35 years ago and which will continue, we are always going to represent African American women; represent their viewpoint; represent their voice; and Time Inc. has no desire with regard to changing the content of Essence Magazine.

CD: When I watch the various Hispanic properties and how mainstream organizations are snapping them, we are simply living in a situation where ethnic media groups cannot be separate from these kind of market forces. The fact is they are businesses.

Lewis: Absolutely. What's happening, too, is we all need to have an appreciation for what's happening demographically. This country, more than likely over the next 10 to 20 years, is going to be 50 percent African American, Hispanic and Asian, and companies are going to be vying for their buying power. To the degree that happens, you are going to see even more opportunities with respect to businesses that are started by African Americans and Hispanics because mainstream companies know that they are going to be dependant on them if they are going to be able to continue to survive and be profitable
in the marketplace.

CD: When you look at two family-owned media institutions Black Enterprise and Ebony/Jet is it also a different sort of situation when it is family-owned versus when you have a significant number of shareholders?

Lewis: You hit it right on the nose. Absolutely from the standpoint of what Mr. Johnson has been able to accomplish since 1945 and what my good friend Mr. Graves has done since 1970, but they are a family-owned business. I do have 27 shareholders that have made commitments to Essence and I've tried to do my best to be responsive to their desires and needs in terms of making sure that Essence continues to be viable and making sure that Essence succeeds.

CD: Bob Johnson made some comments on BET (Wednesday) night with
regards to the sell of Essence. What he said is that "Black businesses will have to realize that to be in business takes precedent over being Black if you're going to grow your business." He also said that the only way to prevent these kinds of sales is to create a Black conglomerate that could afford to buy such companies your thoughts on such a company, because we don't have such a conglomerate.

Lewis: Regrettably we don't, particularly in the media field. From
John Johnson to Earl Graves and myself, there needs to be more of us in terms of having aggregation of wealth to be able to do something like this. That is just a long-term process. I think people should realize that Earl and I are the third generation that's going to be able to provide opportunities for his children, but I'm going to be able to provide opportunities for many more people who are going to
come along and have the possibilities of doing these kinds of things; of getting an aggregation of wealth and being able to buy companies.

CD: Is it also a situation where when our companies reach such a point, it's just a reality that they outstrip the resources of our people in terms of being able to get fair market or above market value? When Bob Johnson sold BET to Viacom for $3.3 billion, who on the planet who is African American had the capacity to be able to acquire that company?

Lewis: No one. And Bob is to be applauded for what he has been able
to accomplish. And just understand, Viacom paid that amount of money for BET because of what BET represents in terms of reaching out to the African American market. And what I feel good about with respect to the opportunity to be a part of the Time Inc. family of magazines, is that Time Inc. has said to us that the audience that you
represent Black women are just as important as white women. And one of my frustrations over the years of being out here and my former partner is that we always felt that white marketers did not really want to accept African American women equally as white women. When I did the deal with Time Inc. in 2000, they said to me and are saying now, your audience is just as important, and we want to be a
part of that and we want it to grow even more than what it is now. And that makes me feel good.

CD: Ed, if there is an African American out there who is saying I don't have much hope to own my own publication and grow it like that, what do you say to them?

Lewis: Businesses were starting during the Depression, during
downturns, during recessions, and I think one has to have a real desire to want to have something of your own. That's where I came from. I wanted to have something of my own. So no matter what was going on, I was determined to be focused to succeed. I say to them that if you have an idea and your idea is unique, follow your dream;
make sure you understand the importance of cash; work with people, and I'm quite sure you're going to be able to overcome and move forward. But it's hard work.

CD: After Bob Johnson sold BET to Viacom, he was able to take those
proceeds, purchase an NBA franchise, become a significant real estate developer, buying hotels, he was able to diversify his portfolio. You are still going to be involved as non-executive chairman and promoting the brand. What's next for you? You've been doing this for 34 years, trying to build a company, first of all, how old are you?

Lewis: I'm still going to be involved. I'm 64.

CD: You're 64. I'm sure there are some other things that maybe Ed
wants to do. So what's on your palate?

Lewis: I want to really develop a political action committee with respect to what's going out here politically within our country, particularly with people of color. I really do think that we as African Americans are going to have to raise considerable amounts of money to support candidates that are either Republican or Democrat who have our best interests in terms of the issues that are important to us. So I see myself ultimately getting much involved in forming a political PAC of people of color to make sure that they have a choice in terms of what's going on politically.