Wednesday, March 15, 2006

BET's Johnson To Form Black Bank

Forming "Urban Trust" will probably remake Bob Johnson's image as Black entrepeneur extraordinaire, since it took multiple hits over the sale of BET to Viacom, lack of critical news programming on the cable mammoth and the proliferation of scandalous, denigrating music videos that became fair game. And BET didn't do itself or its audience any justice when it refused to air Coretta Scott King's funeral live.

This latest venture is sure to get many excited. Memories will be shortened. Johnson will be viewed as a pioneer in Black finance, triggering the type of economic empowerment model African Americans will need to improve their collective condition in the 21st century. On its face, it's a good idea: a national bank and financial services firm targeting a debt-ridden but spend-happy Black community. If not for the excessive spending and inability to reach consensus, African Americans as a whole could be generating as much wealth as South Korea. The whole concept of creating a financial literacy and education network is a critical step in the right direction. Financial literacy is not only important for the Black community - it's important for everyone.

But, the reality of the complex, globalized and volatile economy we live in today presents another angle that is less idealistic and culturally utopic. In forming hedge and leverage buy-out funds with assistance from Deutshe Bank AG and the Carlyle Group, there's no indication that the money used to purchase Florida-based Metro FSB is completely Bob Johnson money. To us, that's a simple signal of the times: there may be no such thing anymore as a complete "Black-owned" business; instead, Johnson's venture could be a collection of various shareholders who can put their money where their mouth is - regardless of the color of their skin or their politics. Johnson plays that game well.

What we predict is the impression or visual image of a Black-owned bank simply based on the novelty of another Bob Johnson enterprise. It may be "independent" for some time, but he'll end up spinning it into a subsidiary of a larger global bank or financial services firm that wants the Black business. And, there's nothing totally wrong with that since we've arrived at that stage in our political and economic maturity where we can no longer say we're "the first" to do this and that.

Still, we hope that the financial literacy aspect of it is truly sincere and solid. What we're looking for here is not another round of seminars, tours, book promos and marketing schemes where famous people tell working people how they made money ... "and you can do it too!" No: the masses are looking for something elementary, basic, straightforward and practical. Something universal and perhaps the beginning of a movement that teaches kids (at an early age) how to invest, save money, write checks, balance budgets and ledgers in the classroom. The true road to financial and personal freedom is through financial literacy.