In those early days, the uranium mines fed Corley’s grocery store, clothing store, gas stations, and restaurant with plenty of customers. But when the mines shut down in the early 1980s, Corley kept food on the table by pumping gas, washing windows, checking under hoods at his service station, and working at the local post office. “It was hard. And my wife always stood by me even though we struggled sometimes,” recalls a teary-eyed Corley, now 74.

Then fate stepped in the day John Herbert, a minority dealer-manager for Ford, pulled into Corley’s station for gas and inquired about the abandoned Ford dealership lot across the street. Not knowing who he was talking to, Corley told him that it went out of business because it was mismanaged. “Why don’t you take it and open it,” Herbert suggested. Corley answered that he would, but he didn’t have the money.

“So when he left, he gave me his card. It said, ‘Dealer Placement Manager, Ford Motor Company,’” Corley recalls in mock shock. “We put together a deal, and I opened up the Ford dealership in 1982. I believe it was the good Lord that opened the door for me.”

Over the next 26 years, Corley would turn one Ford dealership into eight dealerships across six manufacturing brands, including Hyundai, Nissan, Chrysler, Chevrolet, Lincoln, and Dodge — and they are all managed by his children or other family members. Named the Corley Automotive Group, the dealerships together earned $107 million in sales for 2007 — a 16% increase over the previous year. Because of that impressive growth, combined with a steadfast commitment to customer service and a strong work ethic, BLACK ENTERPRISE has named Corley Automotive Group its 2008 Auto Dealer of the Year.

FAMILY RECIPE FOR GROWTH
To get started, Ford invested 80% of about $400,000 needed for Corley to purchase his first dealership. Corley put in the other 20%. Within five years, Corley had repaid his debt to Ford, and his dealership was generating between $12 million and $17 million annually. Corley admits that he had no sales experience, but he did have business experience. “I followed the dealership guidelines to the letter, keeping expenses tight and overhead low. We started out with about five cars on the lot, but soon we were able to sell up to 35 used and 30 new cars. It went a long way to helping us pay off the dealership.”

In 1994, Corley was approached by Dodge to open a dealership about 60 miles away in Gallup, New Mexico, which he purchased. His son Kaul, 45, became the general manager for the new site. They proceeded to open a Chrysler store in 1995 in Grants, now managed by daughter Faye Geter, 49; a Ford, Lincoln, Mercury, and Volvo dealership in Albuquerque in 1995, managed by son Eddie Jr., 46; a Nissan franchise in Gallup in 1999, now managed by daughter Debora Money, 50; and they added a Chevrolet in Grants in 2006, managed by daughter Carolyn Mazone, 47. In 2007, the Corleys added a Hyundai store in Gallup, run by daughter Ruthie Stephens, 52, and another Ford dealership in Espanola, managed by a cousin, Hartford “Trey” Hudson.

Jim Myers, a retired branch manager with the Ford Motor Co. Dealer Development department, which conducted the program instrumental in working out the deal for Corley’s first dealership, says he had faith in Corley’s ability to be successful after their first meeting. “He learned the car business pretty quick,” Myers says. “But another advantage for him was that he was very well-known in town and well thought of. You can’t go to a restaurant in Grants with Corley without people coming up to the table to offer their greetings. Ed really knows his market.”

According to Charles Henson, president of the New Mexico Auto Dealer Association, these are very trying times in New Mexico for auto dealers. “Whether you’re selling domestics or imports, it’s difficult. The industry is under a lot of pressure with gas prices and pressure with lenders. Many of the rural areas are populated with low-income people who require loans to buy cars. So the lender crackdown is going to create challenges that will take all of the Corleys’ creativity to overcome.”

The Corleys are no strangers to challenge. They are skilled adapters, and once faced an enormous hurdle that could have easily thwarted their growth and their faith.

TRYING TIMES
Sometime between 1999 and 2000, things began to fall apart, especially at their Ford location. Corley admits that the company was probably growing too fast and that he didn’t have the people in place at the time to watch cash flow, manage the service departments, and keep car turnover high on the lots. The company was also using its cash assets instead of loans to fund its growth. Profits dropped 50%, and the Corleys struggled to manage their dealerships — which numbered five back then. The company decided to hire an outside consultant to manage the finances, organize the company’s records, and generally help with the accounting.

Corley is now convinced that the person he hired to help get the company back into financial shape actually wanted to destroy the company. “He gave us all the wrong information. Things happened to my records, and once Ford Motor Co. stepped in to help, my accounting was unauditable. I couldn’t pay my bills and I was behind the eight ball with everyone, including the IRS.”

To make matters worse, the same consultant began to drive wedges and breed distrust within the family, daughter Faye says. “The consultant didn’t tell us things and would tell one person one thing and not tell everyone else, or tell the other person a different thing. So no one was on the same page,” she recalls.

On a day Corley says he doesn’t want to remember, he and all his children went to the Ford headquarters to hammer out an action plan — together. They also fired the first consultant and hired a second person to help clean up their books. “The first thing we did in the meeting was pray,” Corley says. “Then everybody went around the table and gave a reason why they were not putting all of their efforts into the business. In the end, we all made commitments to each other that we would take this and we would fix it together and go forward.”

As a result, Corley Automotive Group recapitalized a large portion of its Ford dealership stock with the Ford Dealership Development program, keeping only a 12% interest in it. Unloading the dealership helped the family get back on track financially, and the cash infusion helped them pay their bills and shore up operations. They now own about 23% stock in their original Ford location.

Something else that came out of the gathering was a company-wide meeting every three months so that family and employees can discuss how the dealerships are being managed, talk about successes and failures, set goals, and offer incentives for innovative ideas that can help boost sales.

The Ford store is also back in a profitable position, Corley says. His daughter Florence recently took over the finance department there and has been working to find new ways to deal with lending restrictions customers are facing with the banks. “It is definitely harder to get things rolling, but we’ve been creative with the kinds of deals and incentives we offer potential buyers,” she says. Some of those incentives include free car wash service for the life of the vehicle at all locations.

DRIVING FORWARD
Despite a turbulent automotive market and past hardships, Corley Automotive Group was able to recover after 2000. Itgained an increase in sales because of the strategies put in place that helped increase new and used car and light duty truck sales. Purchasing three additional dealerships between 2006 and 2007 decreased their profits by about 15%, but the family hopes that recent executive promotions and other goals they’ve established will help them recover their profits and continue to grow sales.

Corley appointed his eldest son, Eddie Jr., to be CEO of Corley Automotive Group in June 2007, as part of his succession plan. “On the job, Eddie Jr. has done very well, and it seems like my other children will all accept his lead. He’s real smart, so he will make a good CEO,” Corley says.

In March, Debora, who is the general manager of the Nissan store, was made general sales manager of all three Gallup dealerships. “She is the strongest in our Group in finance, so she’ll oversee all the sales managers and finance managers. She is making sure that they maintain our gross profit,” Eddie Jr. explains. He also asked Kaul, the general manager of the Dodge dealership, to manage used car sales and inventory at the three Gallup stores: to be responsible for putting the numbers on all of the trade-in units and to keep inventory turn under 60 days. Stacey will fill the same role for the Grants Ford, Chevy, and Chrysler dealerships.

Other goals the Corleys have set in place are to increase the number of technicians they have in all the stores. To do this, they’ve made a commitment to help train some of the local community members at the General Motors technical school in Farmington, New Mexico. “I’m looking for kids out of high school that we can sponsor at the college. We’ll invest in this man if when he finishes his training he’ll come work for us,” explains Debora, who aspires to create a pipeline of skilled professionals for all the dealerships.

Eddie Jr. also hopes that moving his Ford, Lincoln, Mercury, and Volvo dealership from a leased lot to a newly purchased, state-of-the-art dealership will attract new buyers and people who had been traveling out of the area for service. “We are relocating to another part of Albuquerque, and it is going to increase our business because we’re going to be strategically located in the center of town, where all the growth opportunities are,” Eddie Jr. says. The project, which will cost between $5 million and $7 million to complete, will increase the number of service bays from 18 to 23 and will create the capacity to hold 250 to 300 vehicles in inventory. “The new location is going to be in plain sight off of the interstate, so we’ll get a lot of visibility. In addition to that, all of my competitors are on the same interstate: Lexis, BMW, Cadillac, Mercedes, Porsche, and Audi. So we’ll have a real chance to compete.”

Jim Mitchell, president and owner of the Jim Mitchell Auto Group in Winchester, Virginia, has known the Corleys for nearly two decades. He said of his friend Eddie Sr., “I think what he’s managed to do is very unique, especially for an African American. To start from scratch — because it wasn’t passed down from his grandfather or anything like that — and build a successful business is hard to do. I really don’t think you’ll find any other example of an African American who has built such a successful business and has brought in his family to run it.”

And that was Corley’s vision all along — to run a successful business with his family. “It’s mighty funny that doors open to those who work real hard. But I think you also have to have trust and faith that it can happen because I always wanted to have a dealership for each one of my children. It’s a very risky business, handling so many dollars. But now all my children own percentages of their own dealerships, and they’re happy. I’m very pleased and my wife is also,” he says.

Corley adds that he always looked to surround himself with good people that he felt could be trusted as well as perform in the workplace. “I’m proud of who I am and what I have been blessed with. You have to be blessed with the family. They don’t have any choice who their people are — I wasn’t able to choose my parents and they weren’t either — but since I’ve been blessed with them, I try to live to be the kind of father and businessman and person who they can always respect. And that’s my life.”

The U.S. Census reports that only 7% of all blacks were married interracially in 2000 compared with 56.7% of American Indians, 14% of Hispanics, and 16% of Asians.

A study, entitled Interracial and Intraracial Patterns of Mate Selection Among America’s Diverse Black Populations, used Census data to examine a sample of more than 62,000 married and cohabiting couples between the ages of 20 and 35 in six metropolitan areas.

“For blacks, a reluctance to marry across racial lines is historically due in part to white discrimination and a sense of racial pride and identity,” suggests Renee Romano, author of Race Mixing: Black-White Marriage in Postwar America and associate professor of history and African American studies at Wesleyan University. “Probably the biggest single reason that the intermarriage rate has been low is because America remains in many ways a segregated society. However, I suspect that these numbers will increase in 2010. Young people today are much more likely to have friends and date across racial lines than their parents’ or grandparents’ generations,” Romano adds.

The report, which also studied marriage between other blacks in the U.S., such as West Indians, Africans, and non-White Puerto Ricans in addition to U.S.-born blacks, went further to show that even intermarriage between black cultural groups remains limited. About 70% or more of West Indians married other West Indians regardless of education. Similarly, between 65% and 84% of Africans, regardless of education, married other Africans. The same held true for Puerto Ricans.

“Marriage is an indirect measure of social distance,” explains Daniel T. Lichter, one of the authors of the study. “This study is not only an indicator of how separate blacks and whites still are in the United States. Some people tend to view the black population as monolithic, but this shows that blacks are very different across cultures.”

Based on figures from the Adoption and Foster Care Analysis Reporting System (AFCARS), black children make up 32% of those in foster care, as compared with 15% of the general population of U.S. children. AFCARS, which provides data as of fiscal year 2005, is a report compiled by the U.S. Department of Health and Human Services’ Administration for Children and Families. It examines public adoptions only.

Ralph Bayard, senior director for systems improvement and disproportionality at Casey Family Programs, says the reasons black children are overrepresented are numerous. “Black children are more likely to be raised in single-parent households and black communities often don’t have the resources to support poor families. The consequence is that children are exposed to abuse and neglect. Yet this is no less true for white families. Here is where racism comes in-situations among black families are more reported, substantiated, and investigated, and black children are removed and placed at higher rates. The circumstances of poverty bring them more attention,” Bayard says.

Additionally, African Americans stay in the system longer and make up a large portion of the youths that age out of the system at 18 years old without the support services they still need. According to the report, older youths are often left vulnerable to early parenthood (84%), unemployment (51%), and homelessness (25%) among other things. Tony Shellman, a national spokesman for National Foster Care Month, was an adoptee. During the month of May, the co-founder of clothing lines Mecca, Enyce, and Parish Clothing Co., urges people to adopt a child. “And if you can’t adopt, then become a mentor to a foster child, or invite a foster child to be an intern at your company, or donate five minutes to call and check on a foster child everyday. Become a part of the solution,” Shellman says. “These are kids that have no support staff-no mom, dad, brother, or sister. Without this support, we’re not building strong soldiers.”

For more information, visit www.fostercaremonth.org or call

1-888-799-KIDS.

The study, which surveyed more than 1,000 black women between the ages of 18 and 49, found that women allow their work environment to alter their self-perception. Almost one-third of women surveyed reported that they work hard to ensure their personal style fits the work environment, while 12% say they have altered their personal style to feel accepted in the work environment. Twenty percent said that they believe the way they wear their hair really matters at work.

Not surprisingly, 54% of those surveyed believe that black women’s beauty is more heavily scrutinized at work than other racial groups and nearly half of the women surveyed (43%) thought that black women are more focused on appearance in the workplace than other racial groups for that reason. One-quarter of women said that they don’t perform as well on the job when their beauty confidence is down. Another 16% said that co-workers influence their personal perception of beauty.

“These findings are important,” says Najoh Tita-Reid, associate director of multicultural marketing for Procter & Gamble and visionary of the My Black is Beautiful initiative, “because when companies and employers celebrate diversity, not only does black women’s self-confidence increase but so do morale and performance.

Tita-Reid adds, “More important, the initiative is a call to black women to define their own standard of beauty and not look to the negative portrayals of African American women in the media or to co-workers or to anyone else to define their beauty.”

The four-day summit that kicked off on Feb. 13 at the La Quinta Resort & Club near Palm Springs, California, began with a tribute to Academy Award nominated actress Ruby Dee Davis, corporate pioneer Ann M. Fudge, world renowned poet Nikki Giovanni, and activist Dorothy I. Height. In accepting her award, Height reminded those in attendance that they did not simply earn the positions they currently hold with the sweat of their own brow but also from the sweat and sometimes blood of the women and men that came before them. In that spirit, she encouraged everyone to help the next generation coming up behind them. As to why an event of this caliber is imperative, Height said it best: “The better you feel about yourself, the more you can help others. And the more you can help others, the better you will feel about yourself.”

Height added, “It is a great reminder to me that I have had the benefit of so many women who showed their power, who understood that power was neither bad nor good; it’s how you use it. I’m glad to see that women are rising up to realize that and to spend several days to think about is a wonderful thing.”

Giovanni agreed, “I’m a big fan of the black woman and I’ve often said that if we didn’t exist we would have to be invented. I think this gathering is a very important one.”

This year’s featured keynote speaker was Sheila Johnson, America’s first black female billionaire. As co-founder of Black Entertainment Television (BET), president and managing partner of the WNBA’s Washington Mystics, and a partner in Lincoln Holdings L.L.C., owners of the NHL’s Washington Capitals, Johnson serves as an inspiration for women in business across the country. She is also CEO of Salamander Hospitality L.L.C., a company she founded in 2005, where she oversees a growing variety of luxury properties while simultaneously serving as an ambassador for CARE, a humanitarian organization dedicated to fighting global poverty.

Johnson continued the message of mentorship, urging each of us to play a role in solving the challenges of today rather than allow them to hold us back. “Live in the light,” said Johnson, who added that as we gather to both follow and lead, we build upon the sacrifices of women before us. “Be a catalyst for good.”

The highlight of the conference, by far, had to be the exclusive interview with Anucha Browne Sanders with Star Jones. After being let go as senior vice president of marketing and business operations for the New York Knicks in January 2006, Browne-Sanders filed a sexual harassment suit against Madison Square Garden and Isiah Thomas. The parties eventually reached an $11.5 million settlement. Browne Sanders granted BLACK ENTERPRISE and Star Jones the first and only interview following the settlement.

When asked why she chose this forum for the interview, Browne Sanders said, “I felt empowered and I think it is so important to have a dialogue with women who are coming up through the ranks who at some point in their career are going to be faced with adversity and knowing that there is recourse. It’s so important to stand on integrity and stand on character and to have a strong backing.”

Browne Sanders added, “I think that the environment that I was in particularly, I really tried to focus on the things that I enjoyed about my job and not allow that to be the chip on my shoulder. And I think it is important for us black women, as women of color that are going to be constantly be faced with the need to be 20 times better than our male counterparts or our white counterparts, to have the resolve, to have a strong backbone, and to figure out from every situation what are you learning? What could you have done better? What can you do better in the next situation to avoid some of those pitfalls?”
One of the most popular sessions of the event was the Creating Your Playbook for Success: Why Talent is Not Enough, moderated by Andréa Bradford, senior vice president, organizational consultant, and executive coach with Right Management. Panelists included Shirley W. Bridges, CIO, president and CEO of Delta Airlines; Joyce M. Roché, president and CEO of Girls Inc.; and Debra A. Sandler, worldwide president of McNeil Nutritionals L.L.C.

Sandler suggests that all young women need the following three things in their playbook: “The first part of the playbook is how are you going to get the job done? Talent is critical. Ask yourself, ‘Do I need training? Who are the people in the company that are excellent at this? How do I model myself after what they do and how they do it?’ The second thing is how do I build a network? A personal and professional network is about having champions, mentors, and supporters. At the end of the day, when the door is closed, who’s going to be able to speak on your behalf?” “The other thing is really be flexible. Figure out how to be true to yourself and what are your strengths and what are your weaknesses and be open to criticism.”

The conference wasn’t without moments of fun. Acclaimed singers and songwriters Brian McKnight and Jill Scott headlined the all-star entertainment and each morning began with either a boot camp Cha-Cha or Latin Fusion, where instructors taught the latest dance moves. Evenings were filled with shopping excursions or a fashion show.

What are your thoughts on the upcoming presidential elections?
I think it could be the most interesting election in 40 years, maybe 50. It is so wide open that we no longer even blink that we may be on the verge of having the first Italian-American elected. That would’ve been a big deal at any other time. But now you’ve got a woman, a Mormon, and an African American, so no one even blinks anymore.

What is a key issue that you hope the new administration will address?
Our education system. Because of legitimate criticism, a lot of changes have been made over the last 15 to 20 years. In many cases, we see kids going to school longer in terms of the individual day, with after-school programs, and even during summers. But, for all of those changes, I don’t think that we can be happy when we step back and look at situations where, from Baltimore to Los Angeles, the majority of black boys who start off high school are not likely to graduate. I think it is a tragedy that the greatest nation in the history of the world can’t do better. I think that there’s a real opportunity for the next president, should she or he decide to focus on this, to really make substantial headway. I want to see, among other things, not just a focus on the basics, but really an encouragement of all of our kids to try to go on for higher education in this information century. And not just incrementally more … I’d like to see it double, triple, even quadruple. I would love to see the next president establish a national goal much like John F. Kennedy did by putting a man on the moon at the end of the decade. I love kids!

What do you think about Oprah supporting Barack Obama in his presidential bid?

I think she just continues to be exceptionally relevant to everyday lives, both big and small. I’m ok with it any time we’re able to get more of our citizens to do good things, and the fact that one of them is high profile in the media is even better. I might feel differently if she were a day-to-day reporter or if she was a classic journalist. I think she’s carved out a different niche for

herself, as a talk show host. She’s an adviser to people for many things, to the books they should read, to how they should relate to their spouses, to how they should raise their kids, to what kind of health things they need. I think it’s a good thing saying that politics matters.

Is it possible for her to go too far in her support for him?
She would be crossing the line if she used her show to give him an unusual advantage.

As journalists, we’re supposed to separate personal feelings from work. But it’s hard not to form opinions about the newsmakers you cover. Who do you think are the most interesting people in the news?
Dick Parsons. I think his departure as Time Warner’s CEO is significant. I think it’s significant that he came in and left on his own terms. I just think his run is fascinating-not as an African American, but as a media mogul period-having a prolonged run at the top of the company and not imploding, not falling in the heap, not getting whacked. That’s not easy to do.

The cover story, “Power in the Boardroom,” featured influential executives such as Richard D. Parsons, chairman of Time Warner; John W. Rogers Jr., chairman and CEO of Ariel Capital Management L.L.C./Ariel Mutual Funds; and Joyce M. Roché, president and CEO of Girls Inc., all of whom were in attendance for the evening’s festivities.

Rogers, who sits on the boards of McDonald’s, Exelon, and Aon Corp says “The only ways to gauge the progress is to have regular discussions in the board room and there need to be measurements. You have to measure not only corporate spending with minority firms, but it must be broken down by category so that no area—whether it’s advertising, procurement, or supply management—is left out .”

These guardians of shareholder value, as the feature coins them, who are charged with protecting trillions in assets, don’t go on unchanged by the tremendous responsibility that they carry. Vernon E. Jordan Jr., senior managing director of investment bank Lazard Frères & Co. L.L.C. and a 35-year boardroom veteran who serves as a director of Xerox and American Express, reveals, “It’s been a process where I have been able to grow, develop, and mature in terms of understanding not only the system but how human beings react to situations.”

More than 150 people gathered for the intimate event with BE CEO Earl “Butch” Graves Jr.; Chairman and Publisher Earl G. Graves Sr., Executive Editor Derek Dingle, and Rogers giving brief speeches to explain the methodology of the list and the importance of diversity on corporate boards.

Said Graves Sr., “BE’s exclusive registry of African American corporate directors is not merely an impressive list of names; it is first and foremost a challenge to the men and women in this room and to every African American who has or ever will reap the rewards of success in corporate life. That challenge is to both meet and exceed the responsibilities inherent in board service.”

He charged each officer with fulfilling an activist role that both serves the interest of the company shareholders and helps to make a better, fairer, more just place for people of color. He added, “The idea that black people who succeed have no responsibility beyond their own self-interest won’t do. Remember you didn’t get invited to the board you serve on because they ran out of smart white people.”

J. Gary Cooper, chairman and CEO of Commonwealth National Bank and a member of United States Steel board, said, “I’d like to think that I’ve added some sensitivity to the importance of diversity to the board … diversity across the board in hiring, purchasing, and even within the community participation. That is our responsibility.”

In running her own label, Tamia controls the purse strings. Since she transitioned from Atlantic, Tamia maintained relationships with people in the music business, which helped her keep costs down.

Although Tamia wouldn’t divulge exactly how much money she spent to get Between Friends made, she says it cost only a fraction of the $400,000 it could normally cost to make such an album, including studio time, producers fees, travel, hotel rooms, rental cars, photo shoots, packaging, videos, tour support, retail programs, and marketing and promotion.

Tamia, who is married to Phoenix Sun’s forward Grant Hill, with whom she has two daughters, says she doesn’t have an in-home studio, so she rented studio time. She says an artist can spend between $10,000 and $100,000 per track for a producer; moreover, renting time in a studio can run $1,000 a day.

Out of Pocket
Indeed, the costs for producing a purely independent album can soar from a few hundred thousand dollars to a seven figure sum, says Lisa E. Davis, a partner at Frankfurt Kurnit Klein & Selz PC, a leading New York-based media, entertainment, and advertising law firm. “Much of it is done electronically; most people are not bringing live musicians into the studio. But, a superstar producer demanding a per-track fee could get $100,000 per track. That’s not an insubstantial amount of money and can significantly increase the production costs.”

Lawyer Ryan Smith, partner at J Ryan Smith & Associates P.L.L.C., a New York-based entertainment, corporate, and intellectual property law firm, and co-host of BETJ’s My Two Cents, adds, “For pure independents, the costs weigh a lot more significantly into marketing and promotion. If we’re talking about promotion on the Internet, then it could be in the thousands or more depending on the promotional effort launched. For something more than that, it can be tens of thousands or even hundreds of thousands.” But indies face other significant costs as well. “Also, packaging and distribution of CDs isn’t cheap. There’s often a 20% to 25% packaging fee for CDs that comes off the top of the royalty computation price from independent distributors.”

According to Davis, however, there are several benefits to going independent that add to an artist’s bottom line. Copyrights are a significant deciding factor. Though indie artists won’t get a six-figure up-front advance like major label artists do, they own the copyrights in the recordings of their music, unlike most major label artists.

“In a traditional recording deal, the record company owns the intellectual property, which is tremendously valuable because if somebody wants to sample it or use it for a commercial, [the artist misses] out on the synchronization license fee and the master license fee,” explains Davis. Indies can build up a catalog of intellectual property and use it to acquire other capital down the road, she adds.

Royalties are another good reason to become an independent artist. Davis explains that, apart from the up-front advance, artists are paid in royalties. According to PerformerMag.com, an online resource for musicians, most major label artists earn a 10% to 15% royalty rate. The problem is that royalties are paid only after recoupment of recording costs and are not generated by the majority of major label releases. Every expense delays the point at which royalties are payable, such as costly sample clearance, producer fees, recording studio crew, promotion, music videos, etc. Before an artist can receive royalties, he must pay back all debts, including advances, which range from $150,000 to $300,000.

Daylle Deanna Schwartz, a music consultant to indie artists and author of I Don’t Need A Record Deal: Your Survival Guide for the Indie Music Revolution, agrees that most new artists signed to major labels don’t earn enough royalties to pay back recoupable expenses after they make their first CD. “The label recoups all of the recording expenses, advances, fees to producers, engineers, tour support expenses, and other things agreed to in the contract,” she says. “It all comes out of the small royalty the artist earns per sale which ranges from 65 cents to maybe $1.75 per CD. Everything else from the sale goes to the label.”

In Your Pocket
“This has, of course, been completely upended with the digital distribution and the digital promotion of music,” explains Davis. “I think that’s why you have a greater trend toward indies now because people realize, ‘Hey, I can put up a MySpace page and get 500,000 friends, and if I can get my songs on iTunes and get downloads, then somebody will pay me 99 cents for my music.’” Many artists are signing deals with iTunes, which greatly reduces costs. There are no warehousing or shipping costs because there is no physical product.

There’s more than one way to be independent (see sidebar, “What’s the Deal?”), and how much an idie artist makes depends on his or her arrangement. In general, an indie performer can earn as much as 40% to 75% of net profits, through profit-sharing deals, according to PerformerMag.com. After all expenses have been paid, the profits are split between the label and the artist.

Chris Hicks, senior vice president, head of Urban Music for Warner Chapel Music and senior vice president of A&R Urban Music for Atlantic Records, says, in addition to the money earned, there’s a big difference in the contract’s duration. An indie’s contract could be for one year, while an artist working with a major label could be working for three to five years, he says. When Tamia was with Atlantic, she had a multi-album deal with options. Now, she has a one-album deal with Image Entertainment, a distribution company that she hired to package and distribute her album. It’s too early to tell how much money she’s made from record sales, Tamia says, but she believes the profits will be greater now that she has her own label. “I don’t need to sell as many albums to make as much,” she says.

Ironically,
Tamia said it was her success with Electra that made it easier for her to become an indie artist: “It’s not an option for everyone, but because I had an established name and have cultivated relationships, it was a bit easier.”

Indie Producer?
The indie game isn’t just for performers. Producer Bosko, who’s worked with Kanye West, E-40, Tupac, Lil Jon, Tyrese, and the Hot Boyz, fell into the independent game because growing up in Portland, Oregon, he had no access to major record labels. “I would send stuff out and it would be sent back,” he says.

Bosko came from a musical family but didn’t seriously think of getting into the business until he won a set of turntables in a break-dancing contest at age 11. He soon started earning money working as a deejay and eventually bought a drum machine and microphone. He moved to California when he was 17 to attend the University of Southern California and to be closer to the music business. He started sending out tapes; formed a rap group called 3 Way; and met E-40, who asked Bosko to produce the remix of “Sprinkle Me.” “It took off after that,” says Bosko of his career. In 2000, Bosko and his partner, rapper Cool Nutz, launched Jus Family Records, his independent production company. He produced Harsh Game with Cool Nutz, which sold 10,000 copies.

“It was great to crack into the business and get the product out and not go through the label,” Bosko says. He sold those CDs at shows and to local record stores that supported indie artists. Jus Family also used the Northwest Alliance of Independent Labels, a Portland-based company known today as Pampelmoose, which provides services to indies such as online store development, Web design, and event planning.

Starting out, Bosko says he and Cool Nutz looked for the least expensive services—the studio was in his dorm room, and a friend at Kinko’s who knew his way around a computer designed the fliers. Bosko says with advances in technology, all an independent producer needs today is a decent laptop, which could run $700; start-up audio software; a decent mic; and speakers, which each cost about $500. “That would be powerful enough to record an entire album,” he says.

But now that Bosko is an in-demand producer, his monthly expenses, which include an assistant’s salary, the mortgage on his home—where his studio is located—studio upkeep, and travel, average about $20,000, he says. His annual salary, which depends on how well the records sell, ranges between $200,000 and $500,000. “I feel like I do pretty well. It’s competitive, and most producers aren’t doing as well as I am,” he says.

Bosko is also a singer-songwriter looking for a major record deal to promote his next CD, The Good Life Movement. He feels that his success as a producer will make it easier for him to sign with a record label. “It takes too much money to compete with the major artists. It makes more sense to let someone else invest in me,” he says.

Digital Ownership
Tamia, who owns the masters to her latest album, says she likes the freedom of making deals without the middle man. She’s worked with companies in Canada, South Africa, and Japan to sell her album. In addition to striking their own deals, indie artists also have a greater chance of success today because of the Internet.

eMusic.com is the world’s largest retailer of indie music and the second largest seller of digital music, after iTunes.com, according to Michael Azerrad, the site’s editor-in-chief. The company has relationships with nearly 20,000 indie record labels, Azerrad says. “We’re doing something right. We’re the foremost booster of independent music on the Web,” he says. “We support the labels, and the labels support the artists.” With limited shelf space in stores and the recent closing of Tower Records, independent artists rely on the Internet to sell their music, Azerrad says.

Tower Records was the company that really fostered independent music. But the problem with selling independent music at major retailers is that it is very niche. Few stores out there, except smaller mom-and-pop-stores, distribute hard-core independent music.

Azerrad says sites like his are picking up the slack. “We’re exposing artists who don’t have the financial backing to put out music. It levels the playing field [for] everybody.”

Don’t Get Burned
A bad production deal starts with a subpar royalty rate—around 4% to 5%, explains lawyer Ryan Smith, partner at J Ryan Smith & Associates P.L.L.C. “Generally speaking, a new artist may get a royalty rate of 10% to 14% on the suggested retail list price from independent labels, 12% to 14% from major or mini-major labels.” It doesn’t stop there. “The costs for independent promoters, those paid to get the album played at radio stations, are sometimes 100% recoupable from the artist’s royalties. Since these fees can be tens of thousands of dollars, this is problematic insofar as artist revenues are concerned. Artists should ask for a cap on how much they can be charged for these promoters and get the recoupable percentage to 50% or lower. In addition, in normal record deals, 50% of music video costs should be recoupable against your audio record royalties. They can really nickel-and-dime you on the percentages. For any artist, you need to watch your percentages and make sure they are within industry standards.”

The best advice for any artist, in addition to hiring an experienced entertainment lawyer, is to retain the services of a knowledgeable accountant with experience in the music industry, stresses Smith.

Smith’s next tip: Protect your intellectual property. Do this by registering the words, sheet music if you have it, and master, with the United States Copyright Office. Smith surmises that more than half the music copyrights in the U.S. have not been registered. “Also, if someone is producing your music, writing a track for you, or even playing a keyboard on one of your songs, sign an agreement with any of these persons to have their rights granted to you. Without this, they may have a claim for partial ownership of your work. [And] if that is the case, it may be difficult to secure a record deal without their permission,” warns Smith.

WHAT’S THE DEAL?
The world of music is as varied as the artists that inhabit it, explains entertainment lawyer Lisa E. Davis, partner at Frankfurt Kurnit Klein & Selz PC. Some artists sign deals with major labels such as Sony BMG, IDJ, Warner Music Group, and EMI. However, more artists are opting for independent deals.

MAJOR LABEL DEAL

• Artist becomes part of label’s roster and must share attention and support
• Artist generally signs a multi-year, multi-album contract
• Label pays all charges, including marketing and promotion of recording, manufacturing, and distribution costs
• Artist typically receives a significant up-front advance and a royalty rate of 10% to 15%
• Artist can’t receive royalties until all costs are recouped by the label, including advances
• In most cases, unless the artist scores a hit record, the artist won’t see any more money after the advance
• Generally, label owns copyrights to all recordings

INDIE DEALS
True Indies

• Indie has own source of capital
• Indie pays for the recording costs and some promotion
• Indie may rent distribution system from the major labels, which will charge for manufacturing the CDs, converting the files digitally to make them available for download, shipping, and storage; in some cases, the label will also create cover art for an additional fee
• Indie owns copyrights to all recordings

Joint Ventures (between an indie label and a major label)

• Indie and major label enter an agreement where both parties share costs and profits
• Indie generally performs the artists and
  repertoire (A&R) function, selecting the artist and paying for the recording and production
• Label pays manufacturing and distribution costs and may pay some promotion costs
• Ideally, indie pays 50% of the cost and receives 50% of the profit

Production Deals (including most vanity labels)

• Deal between major artist and his or her major label
• Label allows that artist to act as a producer, identifying and mentoring new talent under a separate indie label
• Major artist receives overhead, branding, and an increased royalty rate on the new talent—generally as much as 20%
• Major label pays all charges but the indie label doesn’t get paid until those costs are recouped new talent will most likely receive an advance; in some cases, that artist won’t see any more money

Sykes, one of be’s Most Powerful Black Women in Business, will be responsible for the financial stewardship of the university, including budgeting, accounting, transaction management, financial reporting, internal control, and the integrity of financial information, points out King. Sykes will be managing a budget of approximately $22 billion. “A critical focus of Gwen’s will be on systems and process transformation, and the use of technology and process redesign to increase the efficiency and quality of core activities such as accounts payable, payroll, financial budgeting, and reporting,” adds King.

“I am looking forward to the fantastic opportunity of leading the Yale University financial team. I am honored to have had the opportunity to work at NASA and help to inspire the next generation of explorers. Now I look forward to developing the next generation of future leaders at Yale,” says Sykes.

Sykes was appointed CFO of NASA in 2003 by President George W. Bush and confirmed by the U.S. Senate. She oversaw the fiscal operations of the $16.5 billion space exploration program and led the agency to organize under one accounting system, successfully closing a $1.7 billion discrepancy gap in NASA’s books.

This won’t be Sykes’ first stint at an academic institution. She served as an adjunct professor with American University in the School of Public Affairs. “I was part of a unique team of individuals who made it their business to inspire students to be greater than themselves,” explains Sykes. “I hope to bring that same energy and passion to developing and sustaining a solid financial core at Yale.”

Graves was chosen not only for launching BLACK ENTERPRISE–a multimedia company that boasts annual sales of nearly $60 million–but also for changing the landscape of the African American business community. “It is awe-inspiring to be included with other successful businessmen and -women,” says Graves. “It challenges me to do even more in the betterment of all Americans and, in particular, African Americans.”

Graves is only the sixth African American to be inducted into the Hall. The others include: Kenneth Chenault (American Express chairman and CEO), Berry Gordy (Motown Records founder), John Johnson (Johnson Publishing Co. founder), Charles Spaulding (founder of North Carolina Mutual Life Insurance), and Madam C.J. Walker (cosmetics).

“Inducting a laureate with Mr. Graves’ extraordinary reputation and stature in the African American community demonstrates JA Worldwide’s sincere commitment to providing youth with strong role models representing our nation’s diversity ,” says David S. Chernow, president and CEO of JA Worldwide. JA Worldwide is a not-for-profit organization whose goal is inspiring and preparing young people to succeed in a global economy.