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Entertainment Studios Continues To Grow The Culture With $290 Million Purchase

Entertainment Studios Continues To Grow The Culture With $290 Million Purchase

By Gary J. Nix

  • Entertainment Studios’ television investments have risen to $455M in 2019

  • African-Americans over-index on TV use (1.295) as compared to the total population

October is proving to be a busy month at the intersection of media and African-American culture. Last weekend, Tyler Perry opened his new film and television studios in Georgia, and at the beginning of the month, Bryon Allen’s Entertainment Studios purchased 11 small- to mid-market affiliates from USA Television for $290 million. All of these things are helping to grow and capitalize on the culture, since African-Americans over-index on TV use (1.295) compared to the total population.

Why This Matters: Entertainment Studios’ most recent purchase increases the number of television stations to 15, when considering the addition of the four stations in Indiana and Louisiana from the Bayou City Broadcasting deal earlier this year. Furthermore, Allen’s $300 million expenditure for The Weather Channel in 2018 and his involvement in the $10.6 billion acquisition of regional sports networks from Disney (DIS -1.86%) in May illustrates his designs to become a significant force in broadcast television. Entertainment Studios’ television investments have risen to $455 million in 2019. Of course, that level of activity often is accompanied by controversy.

Entertainment Studios’ most recent purchase increases the number of television stations to 15

In 2015, Allen filed a lawsuit against Comcast (CMCSA -1.08%) and Charter (CHTR -0.46%) after their refusal to license his channels demanding $20 billion via allegations of a racial bias conspiracy. Many high profile people and organizations, such as Senator Kamala Harris, Senator Cory Booker, and the NAACP are siding with Allen citing the Reconstruction-era civil rights law that says companies can’t discriminate based on race in business contracts. 

Situational Awareness: Now that the U.S. Supreme Court has agreed to hear this case scheduled on November 13, 2019, this decision is likely to affect the ways African-Americans consume television content but even more importantly could upend civil rights as we know it. A decision in favor could drive more African-Americans, the largest consumers of television towards streaming and other methods of content consumption. Additionally, cable TV’s positioning as a major provider could be adversely affected.

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