Billionaire investor Warren Buffett once said that he would never buy any newspaper for any price, since the industry has potential for unending losses. Besides financial positions he holds in a couple of media companies (for reasons that I won’t go into), Buffett avoids that industry like the plague. Magazines aren’t much different from newspapers, since people just don’t have an appetite for paper anymore. When the Internet stepped into media, the entire game changed, and I believe that it has changed for the better: barriers to entry have been eliminated, and power is not concentrated to a select few, but shared in a more Democratic fashion.
Black America is no different from everyone else, as we’ve slowly put down our Ebonys and Jets, and are now getting our news with the click of a mouse. We are more likely to read sites like NewsOne, TheGrio and Black Voices than we are to actually pay money to carry around a pile of paper with week old information. The juggernauts of media are dying a slow death, as media has opened up in ways we never thought possible.
By looking into the purchase of Ebony Magazine, Magic Johnson might be making a good move for himself and his company. I have no idea how the negotiations are going behind closed doors, and I certainly applaud Magic for trying to save such an important institution within the black community. I do wonder, however, why other companies have not come along and swooped up Ebony the same way that Essence Magazine was quickly eaten by the Viacom empire. Is it because Ebony is a risky purchase? Was the asking price too high? Was the company insistent upon remaining black-owned? Personally, I prefer to see Ebony Magazine remained black-owned, but new and creative management strategies are critical in order for the company to prosper.
Ad revenue for Ebony has dropped to just $35 million per year, a 38 percent decline from a year before. Ad space in Ebony Magazine was once cherished and valued in the tens of thousands of dollars per ad. Now, the luster of appearing in their pages has diminished dramatically. In order for Ebony to survive and prosper, Magic Johnson would have to find a way to utilize the Ebony brand name in a new and more creative business model. I am not sure if Magic has the expertise to pull it off, but it will be interesting to see if he can.
I must confess, however, that Magic’s business relationships confuse me. On one hand, I am excited about his commitment to creating economic establishments within African American neighborhoods that others are afraid to visit. On the other hand, I become disheartened to see Magic doing commercials for companies like Rent-a-Center, where people in urban America are being continuously exploited (the Congressional Black Caucus is also supporting the rent-to-own industry, which is reason for us all to be concerned). He, and other recognizable black male figures, such as Russell Simmons and Montel Williams are lending their names to companies that charge extraordinarily high fees to either loan you money or give you access to your own money. Either way, there’s a problem.
But the bottom line is that Magic is doing something special with his life. He has transformed a sad ending to his basketball career into a celebrated revival that presents him as an empowered businessman who remains connected to his community. The challenge Magic must overcome is making sure that he doesn’t simply become another slum lord, but instead becomes the kind of leader that the community needs in order to make a difference. For that to occur, he can’t follow the model of Bob Johnson at BET, or that of his buddy Michael Jordan, men who simply waste their lives chasing money: A more altruistic African American capitalist is someone who knows how to genuinely balance the bottom line with the fact that lifting a community doesn’t always mean making the highest profit you possibly can. Giving back means more than financing two or three scholarships every year: It means truly working to lift people out of poverty in a way that genuinely promotes productive behavior. Productive behavior DOES NOT involve teaching people how to visit the local Rent-a-Center.
It is my hope that Ebony Magazine does indeed find a buyer. Magic Johnson is as good as any at this point. But the great challenge for Magic and everyone else involved is that no one knows how deep the rabbit hole goes when it comes to the massive losses in media. That is going to make this an interesting story to follow.