In covering African American’s participation in commerce and finance for 35 years, BLACK ENTERPRISE has exposed the good, bad, and ugly. In the 1970s, black entrepreneurs and corporate professionals expanded their horizons as a result of civil rights legislation, affirmative action, and the rise of black political power. In an ironic move, ultraconservative President Richard Milhous Nixon signed Executive Order 11458 in March of 1969, mandating the Commerce Department to coordinate federal government programs to create and bolster black businesses. These would be some of the same initiatives weakened by Republican administrations from the 1980s to the new millennium: the 8(a) minority set-aside program, MESBIC financing (Minority Enterprise Small Business Investment Companies), and the agency known today as the Minority Business Development Agency. The force that truly propelled black entrepreneurship forward in the 1970s and 1980s, however, was the activism of mayors such as Atlanta’s Maynard Jackson; New Orleans’ Ernest “Dutch” Morial; Detroit’s Coleman Young; and Fayette, Mississippi’s, Charles Evers, brother of slain civil rights leader Medgar Evers and BE’s first cover subject. These achievements fell in lockstep with African Americans moving into the executive suite and the ascendancy of the black middle class.
For more than a generation, our editors and readers witnessed the triumphs and disappointments of black businesspeople as American industry evolved. In the span of 35 years, large and small corporations evolved from conducting business with the use of electric typewriters and dictating machines to the Internet and cell phones. But even though sweeping social changes and life-altering technological advances opened doors and created once-unfathomable opportunities, African Americans still have to clear major hurdles that include corporate glass ceilings, unyielding good ole boys’ networks, and government rulings that are inhospitable to affirmative action.
Despite the obstacles — and, in many cases, because of them — a large number of black entrepreneurs and executives emerged victorious. Just take a look at some of the milestones over the past 35 years: Four black-owned companies surpassed the billion-dollar revenue mark, more than 40 African Americans served as CEO or president in corporations that were among the top 1,000 publicly traded in the U.S., and black politicians ascended to some of the nation’s highest political posts.
Our selected timeline, based on when key events appeared on the pages of BE, illustrates moments that capture black wealth, power, and success.
AUGUST 1970
BLACK ENTERPRISE debuts. The magazine becomes, and remains, the bible of black business.
JANUARY 1971
Rev. Leon H. Sullivan becomes the first black person named to the board of directors of General Motors. His appointment makes him the first African American director of one of the nation’s top 500 publicly traded corporations. Today, there are 255 African American directors on corporate boards at the top 500 publicly traded companies.
JANUARY 1971
Johnson Products Co. goes public. The nation’s largest hair care manufacturer becomes the first black-owned company to be publicly traded on the American Stock Exchange.
JULY 1971
Daniels & Bell becomes the first black investment banking firm to purchase a seat on the New York Stock Exchange. Two years later, investment banker Harold Doley pays $90,000 to become the first African American individual to buy a seat on the NYSE. When Daniels & Bell is liquidated roughly 20 years later, the firm loses its seat while Doley remains the only black with a NYSE membership.
JUNE 1973
BE unveils its list of the Top 100 black businesses. The original Top 100, which includes industrial, service, and professional businesses, has total sales of $473.4 million.
OCTOBER 1973
Maynard Jackson is elected mayor of Atlanta. By mandating that minority businesses gain a fair share of municipal contracts, Jackson creates more black millionaires than any other public official and a business development model adopted by other big-city mayors and federal agencies.
MAY 1974
Atlanta University School of Business becomes the first black business program to gain accreditation from the American Assembly of Collegiate Schools of Business. Today, there fewer than 15 historically black colleges and universities that have accredited business schools.
APRIL 1975
Frank Robinson becomes the first black manager of a major league baseball team, the Cleveland Indians.
SEPTEMBER 1975
Purchased for $750,000, Detroit’s WGPR-TV becomes the first black-owned and operated television station in the U.S.
JANUARY 1977
Aided by what is now known as the National Minority Supplier Development Council Inc., minority firms top $1 billion for goods and services sold to majority firms. Today, black-owned businesses receive billions in contracts from many of the nation’s top 1,000 public companies.
AUGUST 1978
President Jimmy Carter hosts the first White House summit of BE 100S CEOs. At the session, they discuss government initiatives that will expand opportunities for black-owned businesses.
NOVEMBER 1983
Rev. Jesse Jackson becomes the first African American to make a serious bid for the U.S. presidency. His impressive showing in the primaries pushes the Democratic Party to adopt his platform plank calling for the use of affirmative action to provide greater job opportunities. In 1988, presidential candidate Jackson becomes an even greater political force among Democrats when he wins five states and places second in four others in Super Tuesday primaries.
OCTOBER 1984
Los Angeles securities attorney Aulana Peters becomes the first African American appointed to the Securities and Exchange Commission.
The Democratic appointee from the Reagan administration is chosen for her skill in handling hostile takeovers, leveraged buyouts, and other activities of corporate raiders — a hot issue during the ’80s.
JUNE 1985
Michael Hollis launches Air Atlanta, the nation’s first black-owned commercial airline. Hollis raises more than $45 million in capital from companies such as Equitable Life Assurance Society (known now as AXA Financial Advisors); General Electric Credit Corp.; and UNC Ventures, the largest black venture capital firm at the time. By 1987, Air Atlanta becomes a casualty of the decade’s airline wars. The airl
DECEMBER 1986
Oprah Winfrey negotiates a distribution deal with KingWorld, her show’s distributor, and walks away with the rights to produce and host The Oprah Winfrey Show. That deal spawned a business empire that includes a television and motion picture production company, a magazine, national cable network, and Harpo Inc. (No. 14 on the BE INDUSTRIAL/SERVICE 100 with $275 million in sales). Those enterprises, along with Winfrey’s other business interests, have made her the first black woman to enter the ranks of the billionaires’ club.
FEBRUARY 1987
Clifton Wharton is named chairman and CEO of $70 billion TIAA-CREF, becoming the first African American to run one of the nation’s top 1,000 publicly traded corporations. This milestone raised the question: Would another deserving African American take the helm of one of the nation’s largest corporations?
NOVEMBER 1987
Reginald Lewis’ TLC Group acquires the international food and beverage manufacturing division of one of the 500 largest corporations in a $985 million leveraged buyout, the largest offshore transaction at the time. The deal creates TLC Beatrice, which appears on the 1988 BE INDUSTRIAL
/SERVICE 100 as the nation’s largest black-owned business with gross sales of $1.8 billion. It would take 15 years for another black-owned business — Houston-based CAMAC International — to pass the billion-dollar revenue threshold.
JUNE 1988
This issue of BE signals the creation of the BE 100S — the top 100 industrial/service companies and 100 leading auto dealerships. Collective sales for 2004: $23.2 billion.
APRIL 1989
In Croson v. City of Richmond, the Supreme Court strikes down a Richmond, Virginia, law guaranteeing that 30% of the city’s public works contracts go to minority-owned firms. That ruling effectively puts an end to set-aside programs for minorities in 36 states and 200 municipalities and begins a series of death blows to affirmative action in business and education. One of the most severe hits: the 1995 ruling in Adarand Constructors Inc. v. Peña. The high court calls for “strict scrutiny” in determining a history of discrimination before the implementation of a federal affirmative action program.
NOVEMBER 1989
Virginia Gov. L. Douglas Wilder is the first African American elected to run a state in the history of American politics. Serving during a rough national recession, he is lauded for operating one of the nation’s best-managed states. After a withdrawn presidential bid in 1992, Wilder now serves as mayor of his hometown, Richmond, Virginia. But his example has inspired a legion of black politicians to run for statewide and national offices over the last decade.
MAY 1992
BET Holdings, parent company of Black Entertainment Television, raises $72.3 million in an initial public offering, making it the first black-owned company controlled by African Americans on the NYSE.
Founder Robert Johnson sees the deal, in part, as a means for black companies to gain access to capital
NOVEMBER 1993
In a one-for-one stock swap valued at $67 million, Johnson Products Co., the hair care products company known for Ultra Sheen and Gentle Treatment, is acquired by IVAX Corp., a Miami-based cosmetics and pharmaceutical firm. The sale represents the first BE 100S hair care manufacturer bought by a majority company and begins a decade-long series of mergers and acquisitions that virtually wipes out African American ownership within the black hair care industry. Only one black-owned hair care firm is featured on the 2005 BE INDUSTRIAL/SERVICE 100: Marietta, Georgia-based Bronner Brothers.
AUGUST 1994
Ann C. Fudge becomes president of the Maxwell House division of Kraft General Foods, making her the highest-ranking black woman in corporate America and one of the most powerful black executives in corporate America. By 2003, Fudge becomes chairwoman and CEO of the troubled Young & Rubicam Inc., propelling her to become one of three black female CEOs of major companies on BE‘S Top 75 Most Powerful Blacks In Corporate America list.
JUNE 1996
The death of Ronald H. Brown, the first black commerce secretary, ends what had been considered the most effective Commerce Department in American history. Ushering in a new era of “commercial diplomacy,” Brown fostered international trade, promoted new technology development, and ensured that the Minority Business Development Agency — and other agencies within Commerce — fully addressed the needs and concerns of minority business.
AUGUST 1998
Franklin Raines announces he’s leaving his position as director of the Office of Management and Budget in the Clinton administration to serve as CEO of Fannie Mae, making him the first African American to head one of the nation’s 500 largest corporations. Within years of his appointment, other African Americans would join Raines among the world’s corporate elite, most notably American Express’ Kenneth I. Chenault, Merrill Lynch’s E. Stanley O’Neal, and Time Warner’s Richard Parsons. In 2005, Raines announced an early retirement as a result of a federal probe into accounting irregularities at Fannie Mae.
JANUARY 2000
BE launches the Black Wealth Initiative. The highlights of our financial literacy and empowerment program include the Declaration of Financial Empowerment (DOFE) and Financial Fitness Contest, in which selected readers receive free consultations with a financial planner and $2,000 toward their financial goals. BE has awarded more than $120,000 to contest winners over the lastfive years.
MAY 2002
Hip-hop is recognized as a global economic force impacting the music, fashion, sports, film, advertising, technology, and finance industries. The culture spawns multimillion-dollar enterprises run by hip-hopreneurs such as Russell Simmons, Sean “P. Diddy” Combs, Jay-Z, and Ice Cube.
AUGUST 2002
Alan Bond, highly regarded money manager and a frequent guest on Wall Street Week with Louis Rukeyser
MARCH 2003
Billionaire Bob Johnson becomes the first black person to acquire an NBA franchise, the Charlotte Bobcats — a milestone in sports business history. Johnson succeeds where other entrepreneurs — such as the late Betram Lee and, most recently, Reginald Fowler — failed in attempts to gain majority ownership of sports franchises. Ironically, Johnson’s ex-wife, Sheila, recently became the first African American woman to gain an ownership stake in three professional sports teams through her partnership with Lincoln Holdings L.L.C: the WNBA’s Washington Mystics, the NHL’s Washington Capitals, and part of the NBA’s Washington Wizards.
FEBRUARY 2004
Vanguarde Media, publisher of Savoy, Heart & Soul, and Honey magazines, files for bankruptcy due to a lack of capital and a flawed business strategy. Vanguarde, once considered the most capitalized black-owned business in U.S. history, receives $60 million in capital over four years from investors that include private equity firm Provender Capital Group L.L.P. (No. 6 on the BE PRIVATE EQUITY FIRMS list). Savoy recently returned to newsstands after being acquired by Hartman Publishing Group, a black publisher based in Chicago.
NOVEMBER 2004
Illinois politician Barack Obama is elected to the U.S. Senate, making him the only African American in that body and one of only three blacks to ever hold that position since Reconstruction. One of the rising stars in the Democratic Party, he has blazed trails for 2006 contenders such as former NAACP CEO Kweisi Mfume and Maryland Lt. Gov. Michael Steele, who are running for the same U.S. Senate seat; and Harold Ford Jr., a prospect for a forthcoming vacant seat in Tennessee.
MARCH 2005
Essence Communications Partners announces it will sell the remaining 51% of the company that publishes the nation’s leading black women’s publication to Time Inc., the magazine publishing arm of media giant Time Warner. As a result, ECP leaves the ranks of the BE 100S, a status it has held since the inception of our rankings in 1973. Only three other companies have been listed on the BE 100S during its entire 33-year history: Johnson Publishing Co. (No. 5 on the 2005 INDUSTRIAL/ SERVICE 100 with $498.2 million in sales); H.J. Russell (No. 13 with $304.2 million in sales); and Earl G. Graves Ltd. (No. 64 with $57.8 million in sales), the pub
lisher of this magazine.
JUNE 2005
Prestige Automotive becomes the first black auto dealer to surpass the billion-dollar revenue mark and one of four black companies to achieve that feat in the history of the BE 100S. The others are TLC Beatrice, CAMAC International, and World Wide Technology.