Earl Graves’ Black Enterprise Magazine recently released it’s 30th report on black businesses in America – the BE 100s. The report is similar to the Fortune 500s list of top American corporations. BE highlights the top black-owned (defined as at least 51%) businesses and the entrepreneurs behind them. The annual issue and the magazine in general is a great relief from the usual Black success stories found in Ebony, Essence, King, and other black magazines that feature black athletes and entertainers.

This year Black Enterprise tightened its reins and required more survey documentation on both financials and ownership as well as signed verification by a top company official. Luster Products, Magic Johnson Enterprises, and FUBU were high profile companies failing to provide adequate information and were not included on this year’s list. Essence Communications Partners and two Hip Hop companies, Rocawear and Bad Boy Entertainment, were de-listed after being sold and/or falling below the 51 percent black-owned criteria.

The BE 100s represent the black community’s ingenuity and drive. As a whole, the BE 100s employ over 70,000 people. The insurance industry has the venerable NC Mutual Life, based in Durham, with its 107 year history and $14 billion dollars of insurance in force. Carver Federal Savings Bank, headquartered in Harlem, tops the list of largest black banks with over a half billion dollars in both deposits and assets. Chicago’s Ariel Capital Management LLC continues to lead the top asset managers with over 21 billion dollars under its stewardship. And to my surprise, New York investment bank, The Williams Capital Group LP, has 122 billion dollars in managed issues.

For the second year in a row, Metro St. Louis’ World Wide Technology,
Inc. ranks as largest black business with 1.4 billion dollars in revenue. Also joining the billion dollar club is Detroit’s Prestige Automotive. That’s right folks. A brother’s company sold over a billion dollars in cars in Metro Detroit. Both companies are less than 20 years old. So, the volume of revenue represents tremendous growth and stability.

The question has been posed, “Shouldn’t America have more billion dollar black companies?” This particularly rings true as annual Black consumer spending power nears the trillion dollar mark. The issue is really the fact that all but 2 of the 280 BE 100 companies are privately owned. The reason that so many white-owned businesses, particularly those started in the last 25 years, become billion dollar companies is at some point they become publicly traded companies. As has been illustrated by the flood of IPOs (initial public offerings) since 2000 with Google being the most high profile, companies go public to raise the capital necessary for growth. 

Good-ole boy institutions like Anheuser-Busch , RJ Reynolds, Hewlett-Packard, Hilton Hotels, Dupont, and others are publicly traded, but a majority of the stock is usually held by the extended family and/or descendants of the original founders. So, they all maintain controlling interests in their respective companies. When these families don’t have majority ownership, they usually form strategic alliances with other shareholders that allows them keep control by voting in blocks. These families used the stock market as a leveraging tool to expand their companies and personal fortunes.

Cathy Hughes’ Radio One would not be the behemoth it is today with over $300 million dollars in revenue without going public several years ago. Many people complained that she“sold out,” especially DC heads that remember her from the WOL-AM 1450 talk radio days. However, if you think black radio is controlled by white corporate America today, think of what it would be if Radio One. There would be nothing to stop white-owned Clear Channel Communications and Emmis Communications.

A prior example was BET. I’m not one to defend Robert Johnson, but the guy had the the theory right in taking BET public. His fault was selling his controlling interest. In my opinion, at the very least he should have sold his interest to black investors. Where was Bill Cosby?? I guess that a piece of the black pie didn’t taste as good as NBC’s white pie.

Private or public, the companies deserve our praise. Cheers to building real wealth versus being “hood rich.” Salute!

Peace from the shotgun house, 

- Jupiter “Gadfly ” Hammon, Soul on Fire

Author’s Note: This is in no way an endorsement of capitalism as a viable and sustainable global economic system. Capitalism as the world knows it clearly has it’s flaws. But, until a holistic alternative is created, practiced, and sustained we have to work with what we got. The main thing is to try to spread the wealth to others through employment and ownership.

Links:
http://www.blackenterprise.com/BE100sHome.asp

Released: June 4th, 2005

The views and opinions expressed herein by the author do not necessarily represent the opinions or position of Playahata.com.