How Robert “Bob” Johnson Launched BET After Raising 95% Less Than His Goal

Reading about John Malone and TCI’s early BET investment led me to Sheila Johnson and Robert “Bob” Johnson, BET’s founders. I read Sheila’s autobiography and just finished reading The Billion Dollar BET: Robert Johnson and the Inside Story of Black Entertainment Television by Brett Pulley. The book details Bob’s journey before, during, and after BET.

Bob Johnson grew up a poor kid from Mississippi and was the first person in his family to attend college. But Johnson didn’t let his starting position define him. He found creative ways to overcome obstacles. How he launched BET is a great example.  

Johnson was a cable association lobbyist. He knew Malone needed low-cost programming that appealed to the large Black audience covered by a cable system Malone acquired in Memphis, Tennessee. Johnson saw an opportunity to create a nationwide Black cable network. Johnson understood the cable industry at a high level—but not how to start a cable network. He needed a plan.

Ken Silverman was launching a network for viewers age 50 and older and asked Johnson to lobby for him. Johnson realized that Silverman’s plan was a blueprint that could be applied to the network he envisioned. He got Silverman’s permission to modify and use the plan. Johnson changed “elderly” to “Black” and had a plan demonstrating that his idea made business sense.

Johnson still needed capital. He needed time on a satellite to transmit his channel to various cable systems, which was a major expense. He budgeted $10 million for leasing a satellite and other start-up expenses. An investor was interested in his idea, but $10 million was too much—more than the investor’s entire fund. Raising $10 million wasn’t an option.

Bob Rosencrans had just started what would become USA Networks. Rosencrans was leasing a satellite but had two problems: He didn’t have enough programming to fill time slots 24/7, and he needed to increase subscriber revenue (so he needed more subscribers). Johnson saw an opportunity. He asked Rosencrans to give him two hours on Friday nights free of charge for Black programming. That would help Rosencrans, so he agreed.

Johnson's original plan required a satellite lease and a studio to transmit to the satellite. His agreement with Rosencrans eliminated those costs, so he needed only a fraction of the $10 million he originally sought.

With a business plan in hand, distribution in place, and a lean $500,000 start-up budget, Johnson pitched Malone. Malone was impressed. He invested $180,000 for 20% ownership in BET and provided a $320,000 loan.

Johnson had zero entrepreneurial experience, but nevertheless he managed to reduce the amount of investor capital he needed to raise by 95% and turned his idea into reality by leveraging partnerships. If Johnson couldn’t overcome a hurdle or didn’t understand something, that didn’t stop him—he found someone who could help him and creatively partnered with them. His use of partnerships has been a key strategy throughout his career.

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