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American Black
Overclass
By
Lee Hawkins
Wall Street Journal reporter
CNBC
updated 2/26/2009
(Excerpted from Newbos: The Rise of America's New Black Overclass, published
2009 by Gotham/Penguin.)
Americans have a deep penchant for classifying people, including by race
and socio-economic categories. Blacks historically have not fared well
in either of those schemes and young black males have been especially
stigmatized.
The media portray them as uneducated dropouts, irresponsible absentee
fathers, sellers or users of drugs and criminals destined for prison.
And it isnt an accident that many blacks, both male and female,
fall into the lower end of the traditional low-class, middle-class and
upper-class distinctions of socio-economic standing.
The lines differentiating those classes tend to blur, influenced not only
by income or assets difficult enough standards for many blacks
but also by occupation, geography and heritage, a sorting and sifting
process that is, overall, unfavorable to blacks. So strong is the appeal
of classifying one another that we can lose sight of tectonic shifts taking
place among us. Such is the case with the rise of what I call the New
Black Overclass, or Newbos.
Newbos are young African-Americans who rely on working-class values, a
capitalistic philosophy and entrepreneurial instincts to create wealth
and fame that would be unimaginable to their forebears. Largely male,
they are using entertainment, professional sports, and media as foundations
upon which to build diversified enterprises, some already worth hundreds
of millions of dollars.
Droves of other young blacks are building businesses and careers in industries
that have sprung up around these sports, entertainment and media figures,
including sports and entertainment agents and lawyers, producers, financial
advisors, publicists, composers, choreographers, stylists, personal trainers
and security professionals, among others.
Unlike previous generations of blacks striving to succeed in a white-dominated
world, these young moguls and their retinues have found their economic
power in refusing to assimilate. Recognizing that institutional racism
and other social and cultural barriers often block their way forward in
a traditional white-dominated economy, they embrace and commercialize
their interpretations and versions of black style and culture, a trend
that reflects the emergence of non-traditional, creative leadership
think Bill Gates and Steve Jobs in every aspect of the American
economy. Their rapid rise from almost nothing represents a shining new
aspect of the American dream, but also creates unprecedented challenges
in their lives.
The statistics are astounding. Black athletes and hip-hop CEOs like 50
Cent and Sean P. Diddy Combs are outperforming and out-earning
most Fortune 500 CEOs, usually without the benefit of Ivy League educations,
exclusive pedigrees, or generations of familial wealth. Today there are
only three African-American CEOs running Fortune 500 companies.
In
2004, the highest-paid black CEO, American Express chairman and CEO Kenneth
Chenault, earned a total compensation package of $21.4 million. That same
year Bad Boy Records CEO Sean Combs, earned $36 million, Tiger Woods pulled
down $87 million and Atlanta Falcons quarterback Michael Vick was paid
$37.5 million as part of a 10-year, $130-million contract. The top three
highest paid African-American athletes earned a combined $141.9 million
in 2004, while the three African-American CEOs working in the Fortune
500 that year earned a combined total compensation of $56.5 million.
By 2007, the disparity in the earnings of the two groups had widened.
In fact, two of the three black Fortune 500 CEOs, Time Warners Dick
Parsons and Merrill Lynchs E. Stanley ONeal, were no longer
in their CEO posts. Todays three African-American CEOs in the Fortune
500 earned combined total compensation of $97 million, while the three
highest-paid athletes earned a total of $192 million.
Collectively, young black athletes bring in billions of dollars a year
in salary alone, not counting the money they earn from endorsements. According
to Forbes, 31 of the 50 highest-paid professional athletes in America
were African-American.
Researchers at the University of Wisconsin-Madison compiled for this book
statistics that show black players in the NFL, the NBA and Major League
Baseball earned about $3.98 billion in their 2007-2008 seasons alone.
Beyond that, the 19 highest-paid black rappers in America earned about
$503 million in 2007. The combined $4.5 billion brought in by professional
athletes and top rappers last year easily justifies the appellation of
overclass.
As with most socio-economic categories, there is no hard-and-fast rule
for what constitutes a Newbo. Newbos are, it goes without saying, black
and wealthy. But wealth is an ephemeral concept. While the most famous
and successful Newbos are millionaires many times over, their lesser-known
compatriots may have far less, although their incomes are in the top 10
percent of all Americans.
Many of the most successful Newbos reach celebrity status at a young age
and often hail from backgrounds that do not always value education. They
seldom have more than a high-school diploma, in contrast to their lesser-known
Newbo colleagues, many of whom pursue education to become lawyers, agents,
financial advisors or producers.
The lack of education among the most popular Newbos also fuels widespread
scorn from society at large, which considers them a major reason that
thousands of black children over-invest in dreams to become professional
athletes or rap stars and under-invest in the educations that would backstop
those often-unsuccessful dreams.
No single individual ever personifies perfectly the characteristics and
life of a class of people. Combs comes close. But the person who comes
closest to being the quintessential Newbo is the basketball star Lebron
James. Anyone who knows the sport stands in awe of James phenomenal
skill.
Basketball has, of course, provided James with immense wealth, not only
in the form of his multi-million-dollar contract with the Cavaliers, but
also through extremely lucrative endorsement deals, most notably with
Nike, which signed him to $90-million shoe contract even before his NBA
debut. But for all the fame and money that basketball brought to James,
the game has been not an end in itself, but the path to a life that embodies
many of the much lesser known aspects of being a Newbo.
James is acutely aware of the brand value of his name and persona and
goes to extraordinary lengths to protect and promote that brand. The most
successful Newbos understand personification of a brand their public
conduct, image and identity and how it is directly connected to
their commercial value.
The Newbo phenomenon embraces the concept that people who establish notoriety
doing one thing well can then leverage that success into other businesses.
The brand becomes more valuable than the talent, whether for sports or
entertainment. Newbos take their brand very seriously.
James had the foresight to realize that he had to build his brand while
still in the NBA so that he could build a strong business to carry him
past the eventual end of his basketball career. Today, he considers himself
80 percent basketball player and 20 percent businessman. Over time, that
balance will gradually shift to 70 percent and 30 percent and eventually
to almost entirely businessman.
I realized early that this is the shortest career that you can have.
I dont know what the average career is for a player, but you can
get maybe 15 years or less years out of this. And then, what are you going
to fall back on? When I thought about it that way, it was easy. I didnt
want to be 16 years into the NBA and when its time to retire then
I try to get into business.
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