Tuesday, June 3, 2014

Kanye's Cousin Wants You to Play Piano with John Legend

Kanye West's cousin, Devo Harris (who also goes by the name "Devo Springfield"), recently launched an interactive video company called "Adventr" (pronounced like the word "Adventure").  The site has a demo in which John Legend gives the user a simple, interactive piano lesson, which is pretty cool.

Harris has an MBA from Columbia Business School.

Read about the business venture here:


To play along with John Legend and see how Adventr's interactive video works, click here:


Will Beyonce, Inc. Ever Run the World?

The New York Times is out with a tribute to Beyonce.  There is no doubt that her talent and style are immense.  It will be interesting to see whether Beyonce is able to take the money she is making from her various ventures and turn it into a business like Oprah did with Harpo Productions and the OWN Network joint venture with Discovery Communications, and like Jay-Z is doing with Roc Nation.  While Beyonce can continue to be fabulously wealthy merely by generating creative work product in music, acting, and endorsements, it would be nice to see Beyonce, Inc. take things to another level with an enterprise that can endure even when her peak performing years are behind her.

Click here to read the piece in the New York Times:


Sunday, June 1, 2014

How A 26-Year-Old Black Female CEO Might Just Change the World

Jessica Matthews is the co-founder and CEO of Uncharted Play, Inc., which is describes itself as a company that intends to "connect the world through playful social invention."  So far, Uncharted Play makes a soccer ball that, after 30 minutes of play, can power a reading lamp for three hours, and also makes a jump rope that, after 15 minutes of use, can provide a 50 percent recharge of a smartphone.  Thus, in one fell swoop, Uncharted Play promotes increased physical activity and renewable energy.

Matthews is only 26 and has an undergraduate degree and an MBA from Harvard.  The child of Nigerian immigrants, Matthews is part of a new generation of minority entrepreneurs who are tech savvy, creative marketers, and socially conscious.  It should be fun to watch her attempt to build her business and change the world.

Click here to see more about Matthews:


Thursday, May 29, 2014

Why Oprah, Magic Johnson, and Grant Hill Should Rejoice

The Los Angeles Times is reporting that former Microsoft CEO Steve Ballmer has won the bidding to buy the Los Angeles Clippers, with a whopping price tag of $2 billion.  Owners of sports franchises around the world must be dancing with glee.  None of the reports indicate that Ballmer joined forces with any other investors, which would mean hopes for African-American partial ownership of the Clippers have been dashed.  Considering how long it might be before Ballmer gets a return on his investment in the Clippers, perhaps Grant Hill, Magic Johnson, and Oprah Winfrey should be dancing with glee too that they did not overpay for a franchise that is not even the most popular NBA team in its own city.  Here's hoping that Grant Hill will own a franchise someday at a reasonable price.

Also, someone who wants to own a piece of an NBA franchise could buy stock in Madison Square Garden, Inc., which owns the New York Knicks.  In light of the $2 billion price Ballmer is paying for the Clippers, Madison Square Garden, Inc.'s current $4.1 billion market cap looks like a pretty good price for the next billionaire who wants to buy an NBA team.

Wednesday, May 28, 2014

Celebrating a New African-American Billionaire

Ucanrise.com celebrates Andre "Dr. Dre" Young's ascendance to billionaire status, joining Oprah Winfrey as the only African-American billionaires in America.



Who will be next?  Possibilities include P. Diddy, Jay-Z, Michael Jordan, Magic Johnson, and Mariah Carey.  Here's hoping that an African-American in an industry outside entertainment and sports also rockets to billionaire status someday soon.  According to Wikipedia (which pulled the information from Forbes), there are 492 billionaires in the U.S.

It appears Oprah Winfrey and Magic Johnson might be part of the same consortium that will make a bid for the Los Angeles Clippers.  The question remains -- how large would their stake be?


Tuesday, May 27, 2014

Apple is Shocked, Shocked that Rappers Use Profanity

In a classic scene in the movie Casablanca, a law enforcement officer pretends to be "shocked, shocked" to discover gambling going on in a casino.  Commentators are speculating that Apple might be reconsidering buying Beats Electronics because of a profanity-filled video that actor/singer Tyrese made in which Dr. Dre appears to acknowledge that Apple is about to buy Beats and make him the first hip-hop billionaire.

Leo Hindery appeared on Bloomberg TV today and used a disturbing, condescending tone in describing hip-hop figures like Dr. Dre, even at one point referring to them and their audience as "aggressive young people."  Hindery implies that Apple should not place Dr. Dre in a position in which he will be regarded as a spokesman for Apple, because of the damage Dr. Dre could do to Apple's brand in the future.

If it took Tyrese's video to alert Apple to Dr. Dre's history and personality, then Apple's management must have been asleep for the past 20 years.  Apple cannot have it both ways.  Beats Electronics is closely identified with Dr. Dre, and that is the major factor in why young people consider the headphones cool and a must-have fashion accessory.

The notion that Apple now is willing to pull out of a $3.2 billion deal solely because Dr. Dre and Tyrese used a lot of profanity on a video to celebrate the upcoming transaction is ridiculous.  If Apple wanted a straight-laced business partner, there are other, less edgy people from the hip-hop world they could have joined forces with.  If Apple decides not to purchase Beats Electronics after all, it won't be because of Tyrese and Dr. Dre's comments on the video.

With Darden Restaurants' struggles, the vultures are circling around its CEO Clarence Otis.  Hopefully, the upcoming sale of Red Lobster can help him get the company on a better footing.  Seventy-six board meetings a year does sound like an awful lot.  Couldn't those companies find someone else to serve on the board?


Monday, May 26, 2014

Why Oprah Won't Own the Clippers

Reports that Oprah Winfrey, Grant Hill, and Magic Johnson are among investors interested in buying the Los Angeles Clippers highlights an interesting phenomenon among African-American owners of sports franchises.

Traditionally, professional sports franchises were owned by a wealthy individual.  With the price of sports franchises rocketing into the billions, it is common these days for a syndicate of wealthy investors to buy franchises.  The remaining owners give up the convenience of having easy access to a single individual able to make decisions, but in return, the league gets buyers willing to pay a premium, with access to more capital to purchase the team, build new arenas, and pay the athletes.

Because of the interest in having more diversity among the owners, and having teams appeal to a more diverse market of fans, a strategy that appears to be in vogue is to have a prominent African-American investor join a consortium of wealthy white investors.  There is nothing inherently wrong with this strategy, as it provides the African-American investor with an opportunity to participate as an owner when he might not have enough money to buy the team on his own, or might not want to take that much financial risk.  The celebrity status of the African-American investor provides the remaining investors with a powerful marketing tool that they can use to generate publicity and increase the fan base.  However, one hopes that if the African-American investor is a celebrity and will be the "face" of the consortium, the African-American investor will get an ownership percentage reflecting the value of his celebrity status.

For example, though it was widely reported a few years ago that Jay-Z had taken a stake in the Brooklyn Nets, Jay-Z's ownership stake was less than one percent.  He later sold that interest when he formed Roc Nation Sports and started representing athletes.

Likewise, though Magic Johnson joined with Guggenheim Partners to buy the Los Angeles Dodgers, according to sbnation.com, Magic's share of the team is approximately 2.3 percent.  Magic says he wrote a check for $50 million for that stake.

One minority investor who appears to have chosen a more traditional ownership model is Michael Jordan, who reportedly owns 80 percent of the Charlotte Hornets (formerly known as the Charlotte Bobcats, which were previously known as ... the Charlotte Hornets).  Jordan's investment also highlights the risk associated with investing in a professional sports franchise.  The Hornets are reportedly losing money, and Jordan continues to pour money into the team as he attempts to turn it around.

Though the Hornets might be losing money, the overall value of the team appears to be steadily increasing, along with the value of other NBA franchises.  Forbes values the Hornets at $410 million, which is a huge increase from the $175 million purchase price in 2010.

Don't get me wrong.  Anytime a minority investor takes an ownership stake in a professional sports franchise, either alone or with a group of other wealthy investors, that is progress as long as they are paying a reasonable price.  However, as Oprah Winfrey, Grant Hill, Magic Johnson, and possibly others prepare to bid for the Los Angeles Clippers, keep your eye on whether their ownership percentage is large enough to warrant a genuine celebration of a historic achievement, or just a mere tip of the hat.

Sunday, May 25, 2014

Emory University Makes History

Congratulations to Emory University for putting another crack in the glass ceiling at major business schools.  The school recently named Erika James to be Dean of its business school.  It won't be long before a publicly traded company invites Ms. James to serve on its board.


Grant Hill's Big Money Backers for Clippers Revealed

ESPN.com is reporting that Southern California businessmen Tony Ressler and Bruce Karsh are two investors in the Grant Hill-led consortium that plans to make a bid to purchase the Los Angeles Clippers.  Ressler co-founded two private equity firms and is a minority owner of the Milwaukee Brewers.  Forbes recently estimated Ressler's net worth at $1.29 billion.

Bruce Karsh, who heads up another asset management firm, also serves on Duke University's Board of Trustees.  Perhaps the Duke University connection is what brought Grant Hill into contact with Karsh.  Forbes estimates Karsh's net worth at $1.8 billion.

Ironically, considering the controversy over Donald Sterling's remarks, with estimates that the bidding for the Clippers could start at $1.5 billion, Donald and Shelly Sterling appear poised to command a premium price for the sports franchise despite the forced sale.


Mental Floss estimated the Clippers value at $430 million just a few weeks ago.  http://mentalfloss.com/article/53477/how-owners-all-30-nba-teams-made-their-money

It will be stunning if the Sterlings get more than $1.5 billion for the Clippers, and even $1 billion might be too much.  Having to share the Los Angeles market with the Los Angeles Lakers should impair the value of the franchise compared with teams that have exclusive rights in comparable markets, like the Chicago Bulls.  However, considering the NBA's potential for international expansion, the popularity of the NBA in China, and the favorable economics for NBA franchises (82 regular games a year; plus only a few premium contracts per roster), one can understand why investors are eager to become owners of an NBA franchise.

Saturday, May 24, 2014

Billboard is reporting that Apple "freaked out" over a profanity-filled video of Dr. Dre and Tyrese in which Dr. Dre appears to acknowledge the acquisition will make him the first Hip-Hop billionaire.

ESPN.com is reporting that Grant Hill, Oprah Winfrey, and Magic Johnson are potential buyers of the Los Angeles Clippers NBA franchise.  The article mentions Oprah potentially pairing with Oracle founder Larry Ellison, and Magic Johnson potentially joining the same group from Guggenheim Partners that bought the Los Angeles Dodgers baseball team.  While Grant Hill's interest in buying the team is an interesting and exciting development, Grant Hill doesn't have enough money to buy the team on his own.  He would have to pair with wealthy partners.

When it comes to sports franchises like those in the NFL, the NBA, and in Major League Baseball, owners of the other clubs have to approve a sale.  Remember, the MLB rebuffed Mark Cuban a few years ago when he was interested in purchasing the Chicago Cubs.

NBA owners will want the Clippers to command a high sale price, because the sale price of the Clippers franchise will affect the valuation of the remaining franchises, much like the sale of a house in the neighborhood affects the value of the remaining houses in the neighborhood.  NBA owners also will frown on a consortium that is too large, because they will prefer to have a single, clearly identifiable majority owner who has authority to make decisions on behalf of the team rather than a glorified general manager who answers to an absentee owner or group of owners.

Among the potential owners that have indicated interest, the NBA is likely to favor Yao Ming.  Yao's purchase would help build interest in the NBA in China, where Kobe Bryant is popular as well.

Although Oprah Winfrey would generate buzz, and is fantastic at promoting her brands, I don't ever recall seeing Oprah at an NBA game  -- even when Oprah Winfrey and Michael Jordan were the toast of Chicago.  NBA owners will want the Clippers owner to be someone who is committed to building the value of the Clippers over the long term.  They will be fearful that Oprah will quickly lose interest in the franchise after the media interest dies down, much like Oprah seemed to lose interest in her satellite radio venture with XM Radio several years ago.

All that aside, here's hoping that Grant Hill manages to successfully bid for the team with a consortium.  Magic Johnson is so clearly identified with the Lakers, it would be odd for him to buy the Clippers and then wind up being the Lakers' principal competitor in Los Angeles.

Watch closely to see who partners with Grant Hill to make a bid for the team.  It needs to be someone with plenty of cash, and with a pedigree that makes the other NBA owners comfortable.  If Grant Hill could get someone like Facebook exec Sheryl Sandberg to join his consortium, that would add the cash and sizzle factor NBA owners will crave as they attempt to expand the NBA brand internationally.

Thursday, May 22, 2014

Jay-Z's investments

One challenge in tracking the investments of wealthy African-American celebrities is that they don't have to disclose their investments.  The Wall Street Survivor's Blog recently summarized the principal known investments of Jay-Z.  It's worth a look.

Here's more on Nili Gilbert, co-founder of Matarin Capital.

CNBC's Fast Money seems to be making a sincere effort to include a more diverse set of guest commentators.  Although it would be nice for the show to have a regular African-American panelist among its standard slate, at least the show is making a move in the right direction.  Yesterday, the show featured Nili Gilbert of Matarin Capital.  Click the link to see it.


Thursday, May 15, 2014

CNBC's Fast Money show today featured an interview with Jacob "Jake" Walthour, vice president of global investment management firm Ramius.  Walthour made an interesting point about activism taking over for private equity in the markets these days.

See the interview here.