Inside Tavis Smiley Inc.

“What’s up with your boy?”

The response to that question was met with a touch of gallows humor among the staff of The Smiley Group Inc. throughout much of 2008. TV personality Tavis Smiley and his team were feeling the heat after a series of commentaries on The Tom Joyner Show in which Smiley criticized then-Sen. Barack Obama during his historic run for U.S. president for what he viewed as Obama’s reluctance to focus on issues of race.

For months, his office had been bombarded by missives, e-mails, and calls from friends and strangers alike–one vitriolic detractor labeled him “a sellout and a traitor to your race.” In fact, Smiley said staff members were “literally berated” by family and community members.

But such blows had more than an emotional impact. His media empire-in-the-making took some severe financial hits. “I went from making about $1 million a year in speaking fees to barely $100,000 because people stopped inviting me to speak in certain places,” he recalls. “Personalities like me have a Q rating, and mine dropped lower than Michael Vick’s after the dog fighting conviction. I couldn’t engage new sponsors or get the ones who have been with me to raise their spending levels.”

That was only the beginning of the perfect storm that pounded his company. Although he didn’t lose any sponsors over “the Obama drama,” the Great Recession caused blue-chip accounts such as Toyota and Nationwide Insurance to not re-up the next year. Amid the turbulence, Smiley also had to contend with sagging employee morale.

So what did Smiley do? He rallied his troops to “stay focused on the work” as he conjured up new ideas and led his team to launch a new radio program, publish a slate of books that became top sellers, and create a traveling museum backed by Walmart, a long-time sponsor, among other ventures to fortify the company. “He kept going full steam ahead.

He talked us through the hard times and we supported him,” says Kimberly McFarland, a long-time Smiley Group employee. “He told us: ‘We know what we have to do. When we make black America better we make all of America better… we’re doing work for the people.’”

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Smiley, who maintains that he didn’t lose a single employee during the Obama kerfuffle or the economic crisis–which he called “black people’s purgatory”–asserts: “We more than survived, we thrived. I now know if I don’t know anything else that my brand can take the heat. And nothing makes me more proud of having survived these four years than understanding the value and integrity of my brand.”

Talk show host. Advocate broadcaster. Self-made entrepreneur. Smiley has created platforms to advance social, political, and cultural commentary and diversify the voices in media. Building a $12.9 million enterprise from scratch, he owns and produces vehicles where he can control the conversation as he finds unique ways to monetize the content. As evidenced by the Obama flap, his approach has produced a number of critics but has amassed a strong mainstream following. Now, he seeks to expand his personality-driven brand through the extension of new offerings.

Drive down Crenshaw Boulevard to Leimert Park in the heart of South Central Los Angeles and you’ll find the house that Smiley built. Once you enter his 6,000-square-foot office building, you’re immediately struck by the immaculate, contemporary facility that houses a radio broadcast studio–named after the late Sheryl A. Flowers, Smiley’s long-time executive producer who died in 2009 of breast cancer–and an array of striking black art and sculpture. It’s here where some of his team of 40 manages the operations that comprise TSG, a holding company dedicated to three core principles: to “enlighten, encourage, empower.”

His numerous holdings include:
– TS Media Inc., which produces the Tavis Smiley talk show that airs weeknights on Public Broadcasting Service (PBS), viewed in 96% of U.S. households with approximately 400,000 viewers nightly.

– Smiley Radio Properties, producer of his radio programs, The Tavis Smiley Show and Smiley & West, which he co-hosts with Cornel West, a close friend and one of the nation’s leading black intellectuals, for Public Radio International (PRI). Together, the programs reach more than 500,000 listeners daily.

– High Quality Speakers Bureau, which, in addition to Smiley and West, offers lecture representation for approximately 17 social commentators and motivational speakers such as Henry Louis Gates Jr., Iyanla Vanzant, and Dr. Robin Smith. (Denise Pines, Smiley’s partner and marketing guru for 15 years, holds a minority stake in the company.)

– SmileyBooks, a co-publishing venture with Hay House Inc. that has published 22 books to date including several best sellers.

– Tavis Smiley Presents…, a unit that has managed and produced company-sponsored public events.

– SIVAT Productions, a company that develops documentary films.

– America I AM: The African American Imprint, a four-year traveling museum that has developed a number of spin-off publications and products.

The Tavis Smiley Foundation, the philanthropic arm that has raised $322,000 to teach youth leadership skills as well as Smiley’s investments in residential and commercial properties in California and his home state of Indiana are also under the TSG umbrella. He also owns a number of Marco’s Pizza franchises throughout Indianapolis.

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Learn, Leave, Launch
Smiley began his entrepreneurial journey through a pink slip. The Indiana University graduate who served as an aide to the late Tom Bradley, the first African American mayor of Los Angeles, gained a following in the late 1990s as a late-night talk show host known for his ability to secure high-profile interviews with the prominent and the powerful, ranging from poet Maya Angelou to President Bill Clinton. In 2001, at the height of his popularity, he was released from his contract by BET founder and CEO Robert Johnson for producing a segment for a competitor. “When Bob Johnson fired me at BET I realized then that this is the first and last time because I don’t want to endure this,” Smiley declares “I wrote down in my journal that when I wake up in the morning and look in the mirror I want all of my shareholders to like me. Thankfully, when I look in the mirrors these days all of my shareholders like me because I am the only shareholder.”

By owning his television and radio programs, Smiley generates revenues from sponsorship, domestic and international royalties, licensing and digital and video-on-demand offerings.

In designing his entrepreneurial future, he followed a number of self-imposed guidelines. Always drawn to public service–he once considered a career in politics–Smiley maintained that his pursuits would honor the legacy of slain civil rights leader Dr. Martin Luther King Jr., whom he considers “the greatest American this country has ever produced.” And he chose media as the platform to activate his mission of exposing issues such as poverty, education, and culture to the masses.

He developed an iron-clad rule from his experience at BET: “Control everything.” To ensure that he met this mandate, Smiley devised a process to understand the business and technical dynamics before he initiated any venture: “I call it the three Ls–learn, leave, launch. In every one of these areas I learned everything that I could and I eventually left. Sometimes I left on my own. I’ll put it this way: Sometimes I jumped, sometimes I got pushed.”

After exiting BET, for example, Smiley developed a radio program in 2002 for National Public Radio as part of collaboration between NPR and a consortium of African American public radio stations to bring greater diversity to public airwaves. He decided not to renew his contract with NPR in 2004 but used the experience to create his own vehicle and strike a deal with PRI to air the show nationwide on its 727-affiliate network.

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A quick study, Smiley discovered other ways to generate additional revenues from his properties through access and conversations with successful media entrepreneurs such as Prince (“content is king; he who owns the content is king and kingmaker”) and Oprah Winfrey, who told him to own all intellectual property rights including his show’s theme music. So every year PBS must cut Smiley a check for the theme music that accompanies the airing of each episode of Tavis Smiley. And when media outlets such as Vanity Fair needed to secure a photo of Harry Belafonte or when CBS network’s Kennedy Center Honors sought footage of his interview with jazz great Sonny Rollins, he received a tidy sum in licensing fees. Says Smiley: “They taught me that you can make money from your properties for years.”

Smiley concedes no formal training in business, having learned his financial management from his mother who raised 10 children. He quips: “I tease my mother that she invented the copper wire by stretching a penny.” That doesn’t mean all of his projects have been smart business decisions. For several years, he would jump at ideas to reach African American audiences through health fairs, technology summits, and financial literacy events. Even though he eventually secured prime sponsors such as Kaiser Permanente, Microsoft, and Wells Fargo, the events lost thousands. “I realized one day what I had to do was just quit and not be the guy that’s going to take all of the risk.” Today, he doesn’t pursue any ventures unless Pines snares sponsorships and Operations Manager Eugenia Marshall runs a profit and loss statement to ensure profitability. “Even though Tavis says he is not in business to make money, we make sure that he doesn’t lose any,” asserts Pines, an M.B.A. who has held positions at Gap Inc. and AT&T and helped increase revenues by 20% annually over the past decade.

Smiley admits he’s managed to take the company further through his partnership with Pines, who met Smiley two decades ago. She says of their business relationship: “We’ve had this great friendship that we’ve been able to turn into a business; I’m profit-driven and he’s completely the social activist, and about black people 100% of the time. Even when he was flat broke and got a little money, he would tithe 10% of that.”

Marathon Man
Smiley is a man in perpetual motion with each hour of his day accounted for.

His day begins at LB4LB Boxing, where the 47-year-old, who gave up running for the sweet science, works up a sweat with owner Terry Claybon, a former boxer who’s trained, among others, Denzel Washington for his role as middleweight Rubin “Hurricane” Carter. Smiley’s regimen includes a series of three-minute rounds sparring with Claybon in the ring and a “knockout drill” on the heavy bag that Claybon says brings out “the killer instinct.” For Smiley, the routine reinforces discipline, strategic thinking, and fortifies his quest for new challenges. “Boxing is like business,” he maintains. “You have to know when to be offensive and defensive. Every punch has consequences and repercussions.”

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The workout also gives him the stamina to handle the round of activities he has lined up across these two days in mid February. After his workout, he preps for an afternoon in which he tapes five episodes of his TV show back to back–a day after the Grammy Awards, he engages in one-take interview sessions with guests such as crooner Anthony Hamilton and rocker and actor Steven Van Zandt as well as former advertising executive and author Charlotte Beers. True to form, his evenings are devoted to reviewing mounds of research so that he’s ready for the next day, taping a series of segments for his radio shows. He will end one evening by assembling his staff at the Ebony Repertory Theater for his live narration and screening of a digital version of the successful American I Am black history exhibit, which ends its four-year run in Charlotte, North Carolina, this summer.

To keep track of it all, he makes time each Tuesday to gather the troops in his spacious office for an all-hands meeting. The heads of each division not only report on the objectives of individual units but identify ways to “connect the dots.” For example, Tavis Smiley Presents has secured speakers such as personal finance guru Suze Orman and Labor Secretary Hilda Solis for a conference on women and poverty–an idea Smiley conjured up a month earlier at 3 a.m.–while Pines reeled in sponsors for the event during a recent trip to New York to review plans for the release of a new book on women’s health.

Via phone, SmileyBooks chief Cheryl Woodruff discusses the marketing strategy for another title: Soula Coaster: The Diary of Me, a new autobiography by singer R. Kelly; Smiley pushed his television production team to quickly develop a promo to coincide with the airing of Kelly’s Valentine’s Day special on BET’s Centric and to schedule the entertainer to appear on his television and radio programs at the time of the book’s release. The team, a mix of Gen X veterans and Millennial professionals, appears tight-knit, focused, and devoted to the company’s agenda and, more importantly, the boss. Smiley has done much to breed loyalty, constantly communicating the mission of empowerment while, despite his need for control, giving members the autonomy to run their divisions. He’s also shrewd enough to recruit top business and technical talent. For example, Smiley hired Jacoba Atlas, the former PBS executive who oversaw his late-night talk show at the network, as executive producer and  writer of his slate of prime-time specials. Atlas decided to join the TSG fold because she found him to be “incredibly collaborative.” Staffers say that he wants concepts to be fully fleshed out and has little tolerance for factual inaccuracies, especially in the digital age when information can become viral. But he also promotes professional and personal development. Take McFarland, one of the managing partners of the Speakers Bureau who served as Smiley’s executive assistant for several years. He promoted McFarland to her current position as encouragement for her  to complete her M.B.A. Moreover, when he taped his special on China last year, he arranged for his entire staff to visit the country.

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Now, the challenge for the company is how to expand its presence beyond a brand of one. Rhonda Nelson, director of brand integration and partnerships, says she has had to learn how to market the qualities of a personality after years of developing ad campaigns for inanimate products such as automobiles. Her emphasis today is to use social media to help the Smiley brand of social activism connect with Millennials as well as repackaging content for global markets. And Pines disclosed such extensions as the development of programs, publications, and events for the Latino markets–ventures in which Smiley would not serve as the front man–as well as diversifying the Speakers Bureau.

Sponsors continue to be drawn to TSG’s multiplatform approach. “It’s more than a media buy,” says Tony Rogers, senior vice president of marketing for Walmart. “We gain access to the TV show, America I Am exhibit, community outreach, and other ventures as a holistic brand. We’re investing in Tavis.”

New developments will not keep Smiley from being outspoken on issues of race and social justice or from initiating projects such as his recent Poverty Tour with West, however. The new ventures, products, and associations must be consistent with TSG’s mission and message. “You have to put out a high-quality product. And that product has to stand the test of time,” he says. “People have to see that it’s the real deal. They have to come to trust you, to believe you, to appreciate your integrity and your intellect. There is no shortcut to brand value. It takes time to build that.” BE