Robert L. Johnson, the pioneering founder of Black Entertainment Television, faces the prospect of giving up control of RLJ Entertainment, a new-media company he started four years ago in Silver Spring, Md.
A loan deal announced Monday with AMC Networks, struck in part to help pay down RLJ Entertainment’s debts, gives the movie network an option to take a 50.1 percent stake in RLJ Entertainment.
AMC chief executive Josh Sapan said his company is working with RLJ out of a desire to bring creative content to the online space.
“Bob [Johnson] has been able to marry technology with content and a sort of media vision, and with something that touches on the social fabric in a very meaningful way,” he said.
Johnson became the country’s first African American billionaire after BET was sold to Viacom in 2001. In the years since his cable TV heyday, Johnson has invested in a variety of businesses, including a real estate firm focused on hotels, a car dealership and the National Basketball Association’s Charlotte Bobcats, which he bought for $300 million and sold seven years later for $275 million.
In 2012, he founded RLJ Entertainment by merging two media companies and taking them public.
The company scooped up a majority stake in Agatha Christie’s literary estate, and it used the murder mystery classics to form the bedrock of a $4.99-a-month paid content YouTube channel aimed at British audiences.
In 2013, the company launched a paid-content YouTube channel called OnCue, which it hoped would capture African American audiences the way BET had built a following on cable TV. OnCue moved to its own website, called Urban Movie Channel, within two years of its debut.
Johnson compared AMC’s involvement with that of John Malone’s, a media magnate whose early investment enabled the growth of BET in 1979.
“Never in the history of content has there ever been an urban-oriented streaming content service where the consumers decide what they want to see by making a subscription payment; it’s not up to the network or the advertisers,” he said.
Johnson said the early performance of the streaming service is similar to what he saw in BET’s early days. But that doesn’t mean the business has been easy.
The company ran a net loss of $13.6 million on $33.5 million of revenue in the six-month period ending June 30, and reported that it owed creditors $61 million.
Some debts apparently included royalty payments due to Bill Duke and D. Channsin Berry, who produced “Dark Girls,” a documentary examining “color-ism within our own community,” referring to the bias against darker skin within black communities.
Their attorney, Rachel Stilwell, provided a legal document claiming that RLJ Entertainment defaulted on $7,286 worth of royalty payments.
In an interview, Johnson said much of the company’s debt was carried over from its acquisition of Image Entertainment four years ago, and suggested that the $63 million loan from AMC would be used to settle those obligations.
“Will they get paid? Absolutely so,” Johnson said of the royalties, “but more importantly I expect many of these companies will be working with us as we move forward.”