Granite Broadcasting knows by heart. Over the last two years, the BE 100s CEO has blazed a trail acquiring new stations and breaking into new markets. Cornwell’s publicly traded company, Granite Broadcasting (NASDAQ: GBTVK), recently purchased Detroit and Bay Area WB Network-affiliated television stations. (Granite sold two of its Michigan-based television stations for $170 million to Freedom Communications Inc., a diversified media company, to help pay for the acquisitions.)
As Don Cornwell says: “The acquisition significantly changes the face of Granite and immediately increases the value and growth potential of our station group. We have increased the size of the advertising revenue pool available to our stations to more than $1.5 billion annually.”
6 GET BIGGER.
There will always be a place in America for the small business entrepreneur, who has spent most of the past decade creating the businesses that have driven job growth for this nation. However, as BET Holdings CEO Robert Johnson has been preaching since before he took his company public in 1991, rapid wealth accumulation– and the economic power and political influence it brings–comes only with size. That means creating more black-owned multibillion-dollar companies that can compete in a marketplace of merger spawned behemoths like Citigroup and Disney/Cap Cities.
“Although in some businesses, technological change has decreased the most efficient size of operation, economies of scale in marketing, distribution and purchasing power make it difficult
for a small business to remain competitive in many markets,” Conrad asserts. “Even in the funeral home industry, a multinational company has threatened the existence of small, familyowned businesses. Too often, entrepreneurs value independence over growth, and wait too long to recognize the importance of scale economies.”
“Consolidation–‘beefing up’ through mergers, acquisitions and partnering to achieve effective market size–is a strategy being pursued by majority-owned firms in financial services, transportation, utilities, communications (including print and electronic media), computer services and the pharmaceutical industry,” says Northwestern University’s Alexis.
Partnering has never been more crucial, say the Board of Economists members. Joining with larger majority companies often gives minority firms quick access to added capital and resources. But the CEOs of black firms must first lay egos aside and decide what’s in t he best interests of their concerns.
“We have a number of black automobile parts manufacturers, several of which are doing well over $100 million in annual revenues,” says Alexis. “If some of them got together and became a billion-dollar auto parts manufacturer, you might have a much different kind of presence in the industry. The question is whether you can get these people with different aspirations together. You’ve got a group of people in their 40s who’ve gone to very good schools and have M.B.As. If you’ve got six people like this, all of whom want to be the CEO, how do you deal with that?
“Black businesses are clearly at a crossroads. It comes down to the notion of being in business for profit versus some symbolism of saying ‘I own 100% of this business, and I’m the chairman and CEO.’ Does black business mean I