Why you should care
You don’t have to produce big-name shows like Game of Thrones to rule a slice of the television kingdom.
Starting around 1975, a cavalcade of comedic talent began gathering most evenings at comedian and television star Jimmie Walker’s three-floor condo in Beverly Hills. There on Walker’s couch, on any given night, you might have found David Letterman or Jay Leno or Elayne Boosler, all unknown comedians at the time, hired to write jokes for Walker’s stand-up act. The youngest, and the only one whose mother had to pick him up afterward, was a 14-year-old prodigy named Byron Allen.
Walker paid Allen $25 per joke he used. Today, after a career in front of the camera as a comedian and talk-show host, Allen presides over his own media empire and enjoys a net worth estimated at more than $300 million. As you might expect from someone who has been steeped in the business since junior high, Allen is unorthodox. His particular unorthodoxy is financial: He’s radically changing the way content gets financed, created and consumed. But Allen’s not out to be the next Tyler Perry. As he tells OZY, he’s chasing two very different trailblazers: Rupert Murdoch and Walt Disney.
Allen’s no bleeding heart — his critics have accused him of economic hardball.
In an age where HBO, AMC and others are spending millions of dollars per episode of carefully crafted television, Allen, 54, is a proponent of a more cost-effective approach. Now stockier and with far less hair, Allen still has the same wholesome yet mischievous grin he had as the wiry, Afroed kid who started doing stand-up at 14. But he’s less eccentric artiste and more about lean, mean production: “We have a factory mentality. We focus on cost, cost, cost, and driving it down,” Allen once explained to Bloomberg Business. “I think of us as the Walmart of television.”
Allen, says Lu Ann Reeb, a media entrepreneur and professor at Emerson College, has “created a solution in an industry in the midst of a paradigm shift.” Like Walmart, Allen’s empire cheaply mass-produces hours of television content, distributing to more than 1,000 broadcast television stations across America hungry for syndicated programming. And you may not have heard of many of the products: an assortment of comedy programs like Comics Unleashed and sitcoms like First Family, as well as reality TV shows, court shows and talk shows. Allen’s company, Entertainment Studios (ES), licenses shows for free to the stations in exchange for a share of the advertising time, usually around 50 percent, a deal most stations are only too happy to make. Bartering for ad time may not be a new concept in television, but the ruthless efficiency that Allen has brought to the process has made ES the largest independent distributor of first-run syndicated programming.
Born in Detroit, Allen and his mom moved to Los Angeles when he was 7. She worked as a tour guide at NBC Studios while young Byron spent hours hanging around The Tonight Show’s set after hours, pretending to perform from Johnny Carson’s desk. “I can’t imagine a much better childhood,” he says, “than being a kid and watching the greatest television comedians of all time write, produce, direct, act and make the world laugh.” By his high school graduation, Allen was performing on that same stage before landing a hosting job on NBC’s Real People, a proto-reality show. In 1993, after his own late-night show fizzled, Allen decided to focus his energies behind the camera, founding ES. Today, Allen’s empire comes equipped with a Fifth Avenue apartment and a mansion in Beverly Hills, where he lives with his wife and three children.
Allen has used his lofty perch to sound off on what he calls “economic genocide” in America, the poverty and rampant inequality disproportionately affecting African-Americans, and he has cajoled, berated and even sued others in the business to ensure that Black-owned media companies have equal access. ES’s recent acquisition of Freestyle Releasing, an independent-film distribution company, is historic: It’s the first time an African-American-owned company can produce, finance and distribute a slate of films worldwide, and it gives Allen’s content machine a direct relationship with theaters and with Netflix.
But Allen’s no bleeding heart — his critics have accused him of economic hardball. One class action brought on behalf of hundreds of comedians in 2012 alleged that ES failed to pay residuals to performers. “We could never have imagined how challenging it would be to get paid for our work,” says one of the lead plaintiffs, comedian Bernadette Pauley. (ES’s general counsel said a federal appeals court is still determining whether to hear the case, and would not comment on the merits.) Of more concern to Allen’s business? The shifting landscape of TV. Allen’s tried to stay ahead of the curve, readying for the launch of SmartTV.com early next year; it’s an “over-the-top” Internet-based television service that delivers local stations, cable networks and original content directly to cord-cutting consumers, and for $19.99 per month (far less than cable). Its variety of channels is designed to compete with traditional cable powerhouses, e.g., Recipe.TV to compete with the Food Network.
Allen plans to raise up to a billion more dollars for that venture to worm its way onto “every device everywhere in the world.” By then, perhaps he’ll be more of a household name — or he may remain comfortably behind the scenes, tugging at the TV cables, the man behind the camera.