Robert Smith (Vista Equity Partners Founder) – Fireside Chat with Byron Allen & Robert Smith | 2019 Greenwich Economic Forum (2019)
Chapters
00:00:55 Entrepreneurial Journey and Motivations of Byron Allen
Early Life and Inspiration: Byron Allen was born in 1961 to a teenage mother in Detroit, Michigan. Growing up, he witnessed the assassination of Martin Luther King Jr. and the subsequent riots in Detroit. His mother pursued higher education and secured an internship at NBC, paving the way for their move to Los Angeles.
Entrepreneurial Spirit: At a young age, Byron Allen recognized the importance of financial independence. He started hustling, seeking jobs and opportunities to contribute to his family’s well-being. He worked as a bag boy at a supermarket and collected stamps for grocery baskets to earn food for his mother.
Exposure to the Entertainment Industry: While waiting for his mother to finish work at NBC, Byron Allen had the opportunity to witness legendary entertainers. He observed Johnny Carson, Redd Foxx, Flip Wilson, Bob Hope, George Burns, and Bryant Gumbel during rehearsals and tapings. These experiences sparked his passion for the entertainment industry.
00:10:21 Comedy Factory: The Path of Byron Allen to Entertainment Success
Upbringing and Work Ethic: Byron Allen’s family emphasized hard work. His father and grandfather dedicated 30+ years at Ford Motor Company and Great Lakes Steel, respectively. Allen desired to join them, but he discovered his passion for making people laugh through comedy.
Breaking into Comedy: Allen got his start as a young comedian on the Gladys Knight and the Pips Summer Show. Despite performing to an empty audience, he caught the attention of Wayne Klein, who encouraged him to write jokes.
Collaboration with Comedy Legends: Allen received a call from Jimmy JJ Dynamite Walker, inviting him to write jokes with renowned comedians. Allen found himself in Jimmy’s apartment with David Letterman, Jay Leno, Marty Natler, Wayne Kline, Jeff Dungan, and Jeff Stein.
Learning from the Best: Allen learned from comedy greats, including Letterman, Leno, and Walker, who taught him to write material effectively. He received $25 per joke, allowing him to quit his paper route and pursue comedy full-time.
Quitting His Paper Route: The $25 check from Jimmy Walker enabled Allen to quit his paper route, where he earned half a penny for delivering two newspapers. He kept the check as a reminder of his first job and the beginning of his successful career in entertainment.
00:14:53 The Education and Business Transformation of a Comedian
Early Career and The Tonight Show: At 18, Byron Allen became the youngest comedian to appear on The Tonight Show with Johnny Carson, hoping to impress a potential prom date.
The Birth of Reality TV and Real People: Recognizing the uniqueness of Real People, Allen took on the show despite its risks. Real People, which aired from 1979 to 1984 on NBC, is credited with pioneering the reality television genre in America. The show allowed Allen to pursue his television career while attending USC film school.
Contract Dispute and Learning the Business: Allen experienced a contract dispute with Real People, leading to his brief dismissal. This setback prompted Allen to shift his focus from being a creative to understanding the business principles of the industry. He realized that true success in show business required a deep understanding of the business side.
Mastering the Business Side: Allen’s dedication to learning the business led him to attend his first television convention at the age of 19. This knowledge became the foundation for his future success in creating and managing multiple television shows and networks.
00:19:02 Business Lessons from the Legendary TV Producer, Al Massini
Byron Allen’s Mission: Byron Allen made it his mission to know everyone in the television industry and be known by them. He attended the TV convention every year for 38 consecutive years to achieve this goal.
Encounter with Al Massini: Allen met Al Massini, a legendary TV executive, at a TV convention. Massini impressed Allen with his confidence and salesmanship. Massini produced successful shows like Entertainment Tonight, Solid Gold, and Star Search.
Allen’s Intentional Approach: Allen directly introduced himself to Massini and expressed his desire to learn from him. Massini became a mentor and father figure to Allen, guiding him in the television business. Massini recognized Allen’s salesmanship skills and took him under his wing.
Massini’s Influence on Allen: Massini instilled in Allen the importance of loving and nurturing others. He taught Allen the value of investing in people and appreciating their talents. Allen credits Massini with helping him start his company from his dining room table.
Recognition and Gratitude: Allen was inducted into the Broadcasting and Cable Hall of Fame, just like his mentor Al Massini 29 years earlier. Allen expressed gratitude for having Massini in his life, acknowledging his role in Allen’s success. Allen emphasizes the importance of having a mentor who loves, nurtures, appreciates, and invests in one’s growth.
00:22:13 Overcoming Challenges to Launch a Television Show
Starting from Scratch: Byron Allen began his television career by calling every television station in the country to sell his first TV show. He aimed to get 75% of the country’s TV stations to carry his show to secure an advance and advertising time from Tribune.
Challenges and Obstacles: Allen faced numerous rejections and skepticism from TV stations, with many expressing doubts about his capabilities. Despite these setbacks, he persevered and managed to secure enough TV stations to meet the 75% target.
Unreliable Partners and Broken Promises: Tribune changed its mind and refused to provide the promised advance and advertising support after Allen had fulfilled his end of the deal. Allen recalled an incident where executives from Paramount Studios spread false information about him to a TV station, claiming he was unreliable and his show would not be successful.
Building Credibility: Allen realized the importance of maintaining credibility with TV stations and ensuring that his word was reliable. He decided to move forward with producing the show despite financial difficulties, even if it meant making personal sacrifices.
Financial Struggles and Perseverance: Allen faced significant financial challenges, including foreclosure threats and difficulty in obtaining credit. He worked tirelessly, often going without food and having his phone turned off, to keep the show running.
Support from a Bank Employee: Allen received support from a bank employee who understood his situation and allowed him to continue banking despite his poor credit history.
Conclusion: Byron Allen’s unwavering determination and perseverance, despite numerous obstacles, led him to eventually achieve success in the television industry.
00:27:54 Marketing Strategies for Building a Successful Media Empire
Value Proposition: Byron Allen recognized the value of providing a platform for movie studios to promote their movies and stars. He approached movie studios and emphasized how his show could benefit their business by selling their movies and promoting their stars for an hour.
Solidifying Relationships: After gaining the support of the movie industry, Allen expanded his strategy to other sectors such as soft drinks, pharmaceuticals, packaged goods, and automotive companies. He established business relationships with major advertisers and television stations across the country.
Growth Mindset: Allen’s relentless pursuit of growth led him to seek opportunities beyond his initial success. He identified the potential in Verizon’s plan to bring cable television to homes and offered to provide 10 HD channels despite not having any at the time.
Innovative Approach: Allen’s innovative thinking allowed him to leverage his limited resources and create a compelling value proposition for Verizon. He demonstrated his understanding of the market and the potential benefits of his offering to Verizon.
Persistence and Networking: Allen’s consistent effort of “smiling and dialing” helped him expand his network and establish key relationships in the industry. His persistence and dedication to building connections played a significant role in his success.
00:30:40 Creation and Expansion of a Multimedia Empire
Byron Allen’s Efficient Content Production Strategy: Byron Allen emphasizes efficiency in his business operations, aiming to maximize productivity and eliminate waste. He promotes a multi-platform approach, utilizing content captured for one network to create content for multiple other networks, optimizing production resources. Allen’s innovative content strategy has led to the successful launch of several 24-hour HD networks.
Acquisition of the Weather Channel: Allen’s satellite provider approached him with the idea of acquiring the Weather Channel, recognizing his business acumen and efficient operating style. The satellite provider highlighted the potential profitability of the Weather Channel despite its ownership issues. Allen’s familiarity with the Weather Channel’s owners, Bain and Blackstone, and his previous business dealings with Steve Mnuchin influenced his decision to pursue the acquisition.
Byron Allen’s Previous Encounter with Steve Mnuchin: Allen’s chance encounter with Steve Mnuchin, then a banker, occurred at a coffee shop. Mnuchin expressed his ambition to turn around Indymac Bank, which was facing financial difficulties. Mnuchin had secured funding from prominent investors and government support, demonstrating his business acumen. Allen’s trust in Mnuchin’s capabilities influenced his decision to consider the Weather Channel acquisition.
00:34:29 Accessing Capital and Building a Media Empire
Access to Capital Challenges: Byron Allen faced significant difficulties in obtaining financing for his company due to being a person of color. He resorted to paying high-interest rates for nearly 20 years and had limited access to capital. Allen emphasizes the lack of access to capital as a major challenge for entrepreneurs of color.
Chance Encounters and Networking: At a 50th birthday party, Allen met Steve Schwartzman and Howard Marks, prominent figures in private equity. Schwartzman arranged a meeting between Allen and Peter Wallace, the grandson of Mike Wallace from 60 Minutes, who ran a media company. Allen developed a relationship with Marks, who expressed admiration for Allen’s intelligence and offered his support.
Weather Channel Acquisition: Allen faced resistance when trying to participate in the bidding process for the Weather Channel. Schwartzman and Wallace helped Allen gain entry into the process, but the terms were suddenly changed at the last minute. Allen called Howard Marks, who provided $310 million in financing within a day. Allen closed the deal and paid back the loan in five months, impressing Marks and establishing a strong business relationship.
Building Allen Media Broadcasting: Allen used the success of the Weather Channel acquisition to invest in other media companies. He focused on acquiring big four network affiliates (ABC, NBC, CBS, and Fox) under Allen Media Broadcasting. Allen invested $455 million in this category within six months and plans to invest billions more. His goal is to build the world’s biggest media company, providing local news, weather, and sports content.
Regional Sports Networks: Allen personally invested in the purchase of 21 regional sports networks from Disney for $10.6 billion. This acquisition was done through his family office and not Allen Media Broadcasting. Allen emphasizes the importance of control and accountability when deploying capital.
Content as the New Oil: Allen views content as the new oil, fueling the digital revolution. He aims to be the Rockefeller of content, pushing out content for all devices across various platforms. Allen believes that there is a significant opportunity in the digital revolution, driven by content.
Byron Allen’s Contact Information: Byron Allen encourages those interested in connecting to email him at Byron@es.tv.
Gratitude and Appreciation: Allen thanks the audience, expressing his joy at meeting so many new people and forming potential friendships. He extends his willingness to offer assistance and provide advice on any matter.
Sponsors and Supporters: The 2019 Greenwich Economic Forum is supported by various organizations and institutions, including: Bridgewater Associates Churchill Asset Management Nuveen Ropes & Grey Aurora Capital Gramercy Funds Management Bank of America Noah Private Wealth Management Gotai Jinan Futures China Industrial Securities Titan Advisors Financial Times Greenwich Business Institute
Conclusion: The forum concludes with a short break before continuing with its programming.
Abstract
The Meteoric Rise of Byron Allen: From Hardships to a Media Empire
The Formative Years: Overcoming Early Life Challenges
Byron Allen’s journey began in 1961 in Detroit, Michigan, where he faced various challenges from a young age. Despite witnessing the assassination of Martin Luther King Jr. and the subsequent riots in Detroit, his mother’s pursuit of higher education and internship at NBC opened doors for them to move to Los Angeles. While financial struggles persisted, his mother instilled in him a drive for knowledge and self-sufficiency, laying the foundation for his resilience and entrepreneurial spirit.
Entrepreneurial Awakening: Hustling to Support and Observing Legends
By age 10, Allen’s entrepreneurial spirit emerged as he sought jobs to contribute to his family’s well-being. He worked as a bag boy and collected stamps for grocery baskets to earn food. While waiting for his mother to finish work at NBC, he witnessed entertainers like Johnny Carson and Redd Foxx, sparking his passion for the entertainment industry.
Early Career Aspirations and Comedy Store Debut
Initially aspiring to follow family footsteps in Detroit’s factories, Allen’s trajectory changed when he discovered his passion for entertainment. At 14, he performed at the Comedy Store in Los Angeles, meeting mentors like Wayne Klein and Jimmy JJ Dynamite Walker. These experiences honed his skills alongside comedy greats like David Letterman and Jay Leno.
Breaking into Comedy
Allen’s career began as a young comedian on the Gladys Knight and the Pips Summer Show. Despite performing to an empty audience, he caught the attention of Wayne Klein, who encouraged him to write jokes. A call from Jimmy JJ Dynamite Walker led him to write jokes with renowned comedians like David Letterman and Jay Leno. Allen’s ability to learn from these greats allowed him to quit his paper route and pursue comedy full-time.
The Turning Point: Early Success and Real People
Allen’s significant career milestone came at 18 when he appeared on The Tonight Show with Johnny Carson. Recognizing the uniqueness of Real People, he took on the show despite its risks. Real People, which aired from 1979 to 1984 on NBC, pioneered the reality television genre in America, allowing Allen to pursue his television career while attending USC film school.
Transition to Business: Navigating Contract Disputes and Expanding Knowledge
A contract dispute with Real People prompted Allen to explore the business side of entertainment. He transitioned from creative talent to a savvy business mind, understanding the industry’s principles and establishing a network of channels. He emphasizes the importance of business knowledge in the entertainment industry, which led him to attend his first television convention at 19. This knowledge became the foundation for his future success in creating and managing multiple television shows and networks.
Mentorship and Starting a Company: A Dining Room Table Beginning
Meeting Al Massini, a renowned TV producer, was pivotal in Allen’s journey. Massini’s mentorship provided insights into TV production and showmanship, inspiring Allen to start his company from his dining room table. Massini instilled in Allen the importance of loving and nurturing others, investing in people, and appreciating their talents. Allen credits Massini with helping him start his company from his dining room table.
Overcoming Financial Struggles: The Banker’s Support
Allen’s path was fraught with financial difficulties, including extreme challenges like foreclosure threats. However, a supportive banker at Bank of America provided crucial advice, aiding him in navigating these hardships. This phase highlighted his commitment to his vision.
Building a Media Empire: Business Strategy and Acquisitions
Allen’s business strategy centered on adding value to clients and partners, leading him to secure partnerships across various industries. His approach involved acquiring television shows and embracing emerging technologies. Notably, his acquisition of the Weather Channel marked a strategic expansion, influenced by encounters with figures like Steve Mnuchin and Howard Marks.
Visionary Leadership: Content as the New Oil
Allen views content as the driving force of the digital revolution, akin to oil during the Industrial Revolution. His ambition to become the “Rockefeller of content” underlines his commitment to providing diverse content across multiple platforms. His acquisition of regional sports networks and major network affiliates further cements his status as a visionary leader.
Resilience, Innovation, and Strategic Partnerships
Byron Allen’s story exemplifies resilience, innovation, and the power of strategic partnerships. From witnessing historical events in Detroit to building a media empire, his journey underscores the importance of perseverance, seizing opportunities, and the impact of mentorship. Allen’s focus on content and commitment to underserved communities position him as a trailblazer in the media industry.
Gratitude and Community Engagement
In closing, Allen extends an invitation for collaboration and expresses gratitude for the community’s support. His story serves as an inspiration for aspiring entrepreneurs and industry leaders alike.
Acknowledging Support: The 2019 Greenwich Economic Forum Sponsors
The success of the 2019 Greenwich Economic Forum, where Allen shared his journey, was made possible by sponsors like Bridgewater Associates, Churchill Asset Management, and others. The Financial Times and Greenwich Business Institute’s role in hosting the event is also acknowledged, highlighting the collaborative efforts that made this platform for sharing Allen’s remarkable story possible.
Byron Allen’s Efficient Approach to Content Production and Acquisition of the Weather Channel
In the realm of content production, Byron Allen emphasizes efficiency, aiming to maximize productivity while minimizing waste. He advocates for a multi-platform approach, wherein content created for one network is repurposed across several others, thereby optimizing production resources. This innovative content strategy has led to the successful launch of multiple 24-hour HD networks. Regarding the acquisition of the Weather Channel, Allen was approached by a satellite provider who recognized his business acumen and efficient operating style. The provider pointed out the potential profitability of the Weather Channel despite its ownership issues. Allen’s prior business dealings with Steve Mnuchin, as well as his familiarity with the Weather Channel’s owners, Bain and Blackstone, influenced his decision to pursue the acquisition. This decision was further reinforced by a chance encounter with Mnuchin at a coffee shop, where Mnuchin shared his ambition to revitalize Indymac Bank, showcasing his business prowess.
Byron Allen’s Journey to Media Mogul: From Predatory Loans to Building a Billion-Dollar Empire
Byron Allen’s journey to media mogul status was marked by significant financial obstacles, particularly in obtaining financing for his company as a person of color. For nearly two decades, he grappled with high-interest rates and limited access to capital. At a 50th birthday party, Allen met Steve Schwartzman and Howard Marks, influential figures in private equity. Schwartzman facilitated a meeting between Allen and Peter Wallace, while Marks offered support and admiration for Allen’s intelligence. This networking led to Allen overcoming resistance in the bidding process for the Weather Channel, with Schwartzman and Wallace assisting him in gaining entry. When the terms were unexpectedly changed, Howard Marks quickly provided $310 million in financing, allowing Allen to close the deal and pay back the loan in just five months. This success allowed Allen to invest in other media companies, including the acquisition of big four network affiliates under Allen Media Broadcasting and the purchase of 21 regional sports networks from Disney through his family office.
Byron Allen’s Closing Remarks and Shout-Outs at the 2019 Greenwich Economic Forum
In his closing remarks at the 2019 Greenwich Economic Forum, Byron Allen extended an invitation for collaboration, expressing his joy in meeting new people and forming potential partnerships. He offered his willingness to assist and provide advice, emphasizing the value of community support and engagement. Allen’s encouragement for those interested in connecting further was evident as he shared his contact information, inviting direct communication.
The 2019 Greenwich Economic Forum was a collaborative effort, supported by a diverse array of organizations and institutions. Sponsors like Bridgewater Associates, Churchill Asset Management, Nuveen, Ropes & Grey, Aurora Capital, Gramercy Funds Management, Bank of America, Noah Private Wealth Management, Gotai Jinan Futures, China Industrial Securities, Titan Advisors, the Financial Times, and the Greenwich Business Institute played a pivotal role in making the event a success. This collective effort not only facilitated the sharing of Byron Allen’s remarkable journey but also underscored the importance of partnerships in achieving common goals. The forum concluded with a break, signaling the continuation of its diverse and impactful programming.
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