Viacom Buying BET Holdings

Friday, November 3rd 2000, 12:00 am

By: News On 6

NEW YORK (AP) — Viacom Inc., the media giant that owns CBS, MTV and Nickelodeon, is buying the biggest black-oriented cable channel in a nearly $3 billion deal that impressed some black leaders and worried others.

The sale of BET Holdings II Inc. is testimony to the growing consumer power of blacks. However, the deal, announced Friday, also marks the end of black control for one of the nation's most prominent minority-owned businesses.

``There will not be African-American ownership at the very top, and I think that makes a difference,'' said James Winston, executive director of the National Association of Black Owned Broadcasters. ``Black ownership is very important in the business world, because stand-alone black success stories are rare.''

BET Holdings, based in Washington, owns the cable channel Black Entertainment Television as well as a jazz music cable channel. It also publishes books, creates radio programming and operates an Internet service aimed at blacks.

The company was sixth in the latest rankings by Black Enterprise magazine of the largest black-owned industrial and service companies, with an estimated $225 million in revenue in 1999.

Viacom is paying about $2.3 billion in stock for the privately held company and will assume $570 million in debt.

Robert L. Johnson, the founder of Black Entertainment Television and majority owner of BET Holdings, will remain as chairman and chief executive of the operation after the deal. Debra Lee will continue as BET's president and chief operating officer.

Though many blacks admired Johnson's business skills, the programming content on BET — heavy on risque stand-up comedy and sexy music videos — was the frequent target of criticism.

Those critics included cartoonist Aaron McGruder. One of his black characters in the syndicated comic strip ``The Boondocks'' suggested BET was failing to serve the black community's best interests.

``While there may be temptation to mourn the loss of BET from the ranks of black-owned companies, the possible upside for those of us who are dissatisfied with the state of black entertainment is enormous,'' McGruder said Friday. ``The critical issue is who Viacom chooses to helm the new incarnation of BET and whether they have the courage to raise the bar on black television as high as it can go.''

Viacom president Mel Karmazin said his company hopes to increase the reach of BET, which is now available in about 62.4 million of the estimated 75 million U.S. households with cable television.

He also said BET properties should get a bigger share of the money spent by advertisers. He said while blacks represent about 13 percent of the U.S. population, only 1 percent of ad spending is going to media that target blacks.

Pluria Marshall, chairman of the National Black Media Coalition, said he harbors some doubts about Viacom's commitment to blacks, but also sees an opportunity for better programming at BET.

``The black community deserved 500 percent more than Bob Johnson even attempted,'' Marshall said. ``He's an equal opportunity spendthrift.''

John F. Robinson, president of the New York-based National Minority Business Council, hailed the deal as testimony to blacks' growing market power.

``This gives Viacom access to an expanding minority market,'' he said. ``The demographics are changing. Blacks and Hispanics are going to be the majority in a lot of key media markets.''

Viacom also owns the UPN, TNN and VH1 television networks, the Showtime pay-TV service, the movie and TV studio Paramount Pictures, radio station and billboard owner Infinity Broadcasting and publisher Simon & Schuster.


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