Byron Allen: Taking on the Distributors

Programmer says Charter-TWC diversity pact inspired $10B discrimination lawsuit
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African-American media mogul and Entertainment Studios chairman and CEO Byron Allen has aggressively pushed for more inclusion of 100% African-American-owned networks by targeting major cable industry mergers with discrimination lawsuits. Allen and the National Association of African-American Owned Media (NAAOM) in May filed a $10 billion suit against Charter Communications, trying to stop Charter’s acquisition of Time Warner Cable, claiming Charter has engaged in racial discrimination by not contracting with 100% African-American-owned media. He also chastised Charter for having an all-white board of directors and criticized the memorandum of understanding Charter reached with the Rev. Al Sharpton and other multicultural organizations this past January outlining diversity mandates for Charter as part of merger approval.

Allen has sued before. Allen and the NAAOM (in February 2015) filed a $20 billion lawsuit against the Comcast-NBCUniversal merger: the merger was approved but the suit is still pending. He also, in 2014, sued to block the DirecTV-AT&T merger. That suit was settled in December 2015, after AT&T agreed to carry Allen’s Comedy.TV, Justice Central, Recipe.TV, ES.TV, MyDestination.TV, Cars.TV and Pets.TV on AT&T U-verse TV and DirecTV. The Charter-Time Warner merger was completed in May.

Charter said it added Mauricio Ramos, CEO of telecommunications company Millicom, to its board at the close of the merger, and responded to Allen’s comments with a statement: “Mr. Allen’s history of frivolous claims speaks for itself. Charter is committed to expanding diversity and inclusion throughout the company as reflected in the MOU we signed with leading national civic organizations representing communities of color. Our commitments will enhance diversity in corporate governance, including on our board of directors, employment, suppliers, community investment and in the programming we carry.”

Allen further explained his reasons behind filing the suit, and thoughts on industry trends, in an interview with Multichannel News programming editor R. Thomas Umstead. An edited transcript follows.

MCN: Give me a sense of how you see the cable industry today and what challenges it faces in a very competitive and crowded entertainment environment.

Byron Allen: The industry is definitely very fluid and it’s developing at a rapid pace. The Internet is definitely having a huge impact on how people consume content, and that is unfortunately at the expense of independents and minority voices — especially people of color — and that is something that we have to be very careful about. It’s important for all of our voices to be heard and widely distributed, and unfortunately that isn’t the case.

MCN: You’ve been very vocal in stressing that to the point where you’ve filed discrimination lawsuits against a number of mega-cable mergers, most recently against the Charter-Time Warner Cable union. How effective do you believe your activism has been in terms of getting your points across?

BA: We have a $10 billion lawsuit against Charter. This is an important lawsuit — it is based on the Civil Rights Act of 1866, section 1981. It was a lawsuit that was put on the books to protect the newly freed slaves 150 years ago, to make sure that the newly freed slaves had economic inclusion and, unfortunately, 150 years later that is not the case. I was very disappointed to see that Charter had an all-white, male board — not even a woman on the board to represent 60% of the global population.

I was disappointed that there are no Asians, Hispanics or African-Americans on the board. You would think that in 2016 you would not have to say that. I was disappointed that Charter, under the leadership of [CEO] Tom Rutledge, has signed an MOU — a memorandum of understanding — with Rev. Al Sharpton, as if Al Sharpton represents all black people. Al Sharpton does not represent me. The very idea of that is racist and disrespectful. I didn’t do anything regarding Charter[‘s] pending acquisition of Time Warner Cable until I heard Tom Rutledge signed an MOU with Al Sharpton, and that lit me up like a Christmas tree. That’s when I had to step in.

When I looked at the [Charter] board, as well as the fact that [Charter is] spending billions of dollars and none of it is going to 100% African-American-owned media, that’s when I filed the lawsuit. I’ve asked Tom Rutledge to sit down with me, and at this point he has refused to do so. I don’t think that’s in the best interest of the stockholders, the public, and I don’t believe the government should have supported the type of behavior that he has displayed against someone in our community such as me.

MCN: What do you say to people who believe that you’re taking these actions strictly to get your suite of networks wider distribution?

BA: I’m an entrepreneur. All of my moves are made to build my business, but also to make things better for the people behind me. We’re in a business that spends $70 billion a year licensing cable networks and black entrepreneurs getting practically nothing. The numbers don’t lie — we have to stop talking about diversity and economic inclusion and start doing something.

That is the reason I sued Charter — it’s real simple, and if I’m wrong, show me the economic inclusion. Why does your own MOU say that if we get Time Warner Cable, we’ll put a woman, an African-American, an Hispanic on the board within two years? Why does it take two years — like it’s an evil burden?

A lot of people like to talk about it, but I’m doing something about it. I’m 55, I have a wife and three kids, and I decided not to leave this mess for them to deal with. … I’m going to deal with it once and for all, and the way I’m going to deal with it is through lawsuits. Not because I am a litigious person, but it’s the way to get it to the federal courts and start looking at the emails, start doing the depositions and having those conversations that they wouldn’t have with us. These lawsuits could have been over real fast if they could have pointed to that African-American unicorn that they’re doing business with, but they couldn’t find that unicorn.

What I’m doing is going to make the industry better. You’re going to have true diversity, true economic inclusion, which means jobs in our community, and you’re going to have a better product because you’re going to connect with the people who represent America today. This is the conversation no one wants to have because they love their apple pie and they don’t want to give you a slice. But guess what? I’m hungry too.

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