Also in works: an airline for BET founder

Robert L. Johnson an important part of blockbuster deal

May 25, 2000|By Rona Kobell | Rona Kobell,SUN STAFF

Robert L. Johnson, the founder of Black Entertainment Television, emerged yesterday as a key participant in United Airlines' $11.6 billion attempt to acquire US Airways.

Under the proposed deal, a new company - DC Air - would be formed with Johnson in charge.

Unlike what occurs with most start-up companies, he would be getting a ready-made airline, picking up most of US Airways' East Coast routes. That would give the new airline 122 daily departures to 44 cities and 3 million passengers a year.

DC Air would lease 37 planes from United Airlines, as well as flight and ground crews, thus creating a new airline with the experienceof a major carrier based at Ronald Reagan Washington National Airport.

Among the routes are Washington to Hartford, Conn., and Manchester, N.H. US Airways is keeping its profitable Washington-New York Shuttle service.

Johnson's participation is crucial, analysts said yesterday, as United and US Airways attempt to avoid federal antitrust concerns.

US Airways controls 35 percent of National's business, according to the Metropolitan Washington Airports Authority. If most of the routes were retained by United, the Department of Justice would almost certainly rule that the airline constituted an unlawful monopoly there, analysts said. "It was done to pacify the DOJ," said Raymond Neidl, an airline analyst with ING Barings in New York.

Even with Johnson's participation, Neidl said, the government's approval of the deal amounts to "a toss-up," with the possibility that the airlines will have to modify the deal.

The deal would be another coup for Johnson.

The ninth of 10 children born in Hickory, Miss., he scrubbed toilets and cleaned the assembly-line floor of a battery plant before enrolling into the University of Illinois. There, he met Sheila Crump, whom he married in the campus chapel in 1969, the year after he graduated.

Johnson enrolled in Princeton University's Woodrow Wilson School of Public and International Affairs, graduating in 1972, then moved to Washington, where he joined the Corporation for Public Broadcasting. He dabbled in politics before becoming a cable television lobbyist.

In 1979, he founded Black Entertainment Television as a two-hour-a week channel focused on programming for black Americans.

Its parent company, BET Holdings II, now owns and operates the BET Cable Network, featuring 24 hours of black music videos, live performances, sitcoms, comedies, news and public affairs as well as youth programming. The network reaches more than 55.5 million cable households and 90 percent of black cable households, according to Nielsen Media Research.

The company also owns BET on Jazz, a jazz channel; Emerge, a black-focused magazine; Arabesque Books; a black romance novel company; and two theme restaurants.

Johnson took BET private in 1998 after seven years as a public company. One reason for that move was that the market wasn't valuing BET high enough, according to Alfred Edmond, editor-in-chief of Black Enterprise Magazine and an acquaintance of Johnson's.

Johnson has a close relationship with the Clinton administration, and has joined the president at state dinners.

Friends describe Johnson as a soft-spoken, regal entrepreneur who, despite his 5-foot-6-inch frame, can command a crowd upon entering a room.

"He's a very finished sort of person,' said Wayne O'Dell, president of the Cable Telecommunications Association of Maryland, Delaware and the District of Columbia.

O'Dell praised Johnson for "bringing a progress to the cable industry that hadn't been there before," and in the process becoming a leader. But, O'Dell said, Johnson never took on the characteristics of a media mogul, and was always accessible.

Edmond said Johnson's transition into airlines should be smooth, given the regulatory issues he has had to confront in the cable industry.

But after 30 years of piloting American Airlines planes, Frank A. Spencer isn't so sure. Johnson will inherit the labor-management difficulties that have plagued the industry for years, said Spencer, now professor emeritus of transportation and labor relations at Northwestern University's J.L. Kellogg School of Business.

Merging pilots will be particularly problematic because their seniority levels determine which routes they're assigned.

"Labor relations have not been the high point of success for airlines," Spencer. said.

Johnson will need to be a hands-on manager, Spencer said, juggling the various unions, flight schedules and safety concerns.

"If he's a good manager, and he's making the transition while people are making money, he already has a good thing," said Spencer. "He doesn't have to create a new airline out of the bushes."

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