November 21, 2018 by and
Photography by Bill Sitzmann

Disruptors don’t ask permission. Omaha native and media mogul Cathy Hughes built the first leg of her Urban One media conglomerate by being a disruptor. Nearly 40 years after purchasing her first radio station, Hughes has built an empire that includes 54 radio stations with 15 million weekly listeners; TV One, which serves 59 million households; Reach Media, home of the Al Sharpton Show; and a variety of digital platforms. She has a reported net worth of more than $450 million.

None of it would have been possible, she says, without what she learned in her hometown of Omaha, where she was born to a family of high achievers.

“My mother, father, and grandfather were very committed to trying to improve the plight of our people, and I inherited that,” says Hughes.

She started working in media as a teenager at the Omaha Star newspaper. She learned from Star publisher Mildred Brown and editor Charles Washington that information is power, and that black media is not just about a business, it is about a community service.

In her early 20s, she began volunteering for KOWH, which had recently been bought by a group of prominent African-Americans in Omaha who changed the station’s format from edgier, independent music to jazz, R&B, pop, and soul music that appealed to African-Americans.

“I had always, as a child, aspired to be on the microphone,” says Hughes. “With KOWH, I was, for the first time, exposed to management positions, sales positions, and others, performed by African-Americans. Their example inspired me to become a broadcast owner of what, ultimately, became the largest black media company in the world.”

Tony Brown, host of the PBS show Black Journal, which became Tony Brown’s Journal, once appeared in Omaha and was so impressed with Hughes that he invited her to be a lecturer at Howard University despite the fact she was not a college graduate herself.

“He saw that I was so hungry for the opportunity and that this was a passion for me,” Hughes says.

Hughes parlayed that opportunity to become D.C.’s first female general manager of a radio station when she took the reins at the university’s radio station, WHUR, in 1973. She grew ad revenues and helped WHUR go national after creating the program The Quiet Storm, which hundreds of stations across the country adopted.

The ambitious Hughes advanced from manager to owner when, in 1980, she and then-husband Dewey Hughes purchased radio station WOL in a distress sale, an FCC sale in which the price is discounted by 33 1/3 percent if the station is sold to a woman or minority. In this case, the station was appraised at $1.4 million, so Hughes paid $1 million.

The down payment was 10 percent, or $100,000. The FCC also required the new owner to have a year’s worth of operating capital, in this case, $600,000.

“I raised $100,000 from 10 investors—each putting in $10,000 a piece, and then I borrowed the rest,” Hughes says.

Hughes wanted to take the station in a different direction. The new owners conducted a format search in this heavily populated radio market and discovered that, while Washington had several black radio stations, there was a hole in the market for news and talk radio specifically programmed for the black community. With this information, Hughes found her market, and her dollar amount.

“Because I was changing formats, I wanted a $250,000 cushion [on top of the $600,000], so overall I was looking for $1.8 million,” Hughes says. “This was turned down by 32 different banks. The 33rd presentation was to a Puerto Rican woman banker—and she said yes. She was the one that made the difference.”

She dubbed her new 24-hour-a-day news format “Information is Power.” Hughes also jump-started lagging advertising sales, taking them from $250,000 to $3 million in the first year.

Although she knew she could make it work, her lenders were not so sure once they started
seeing numbers.

“The prime interest rate at that was in the mid-20s. My loan was 2 points over prime, so there were months when I was paying close to 30 percent interest on $1 million, and I could not always make the payment,” Hughes says.

She was told she needed to go back to an all-music format because it was a lower cost. Hughes said no. She loved this market, and she wanted to fill the need. She initially scaled back on the news talk programs, but added them back in as money allowed.

But she was not content with owning WOL. “I always wanted more than one station,” she says.

In 1987, Hughes purchased her second station, WMMJ in Washington, which began to turn a profit once she converted it from an easy-listening station into a rhythm-and-blues station.

Her vision and ambition helped her to create a radio network, seeking opportunity where others saw failure.

“Keep your eyes on the prize,” Hughes advises other business owners. “Don’t let anyone discourage you. The best way is to keep the hard times to yourself. You have to be very careful if you are a woman, especially a woman of color, to not let people know about the hard times.”

That stoic attitude, combined with understanding that challenges will come, has helped her persevere.

“Anyone who goes into business is going to have challenges,” says Hughes. “You have an up cycle, you have a down cycle. The key is figuring out whether or not you have longevity.”

Hughes’ business has mostly been in an up cycle. In 1999 she became the first African-American woman to chair a publicly traded company. After the multi-billion dollar company went public, the ever-driven Hughes kicked into high gear, purchasing more than 20 radio stations in 2000 alone, 12 of them in a package deal with iHeart Radio (then ClearChannel) in a $1.3 billion deal.

At the time, it was the largest business acquisition by a black business owner.

“I hope that record has been broken,” says Hughes.

The media magnate added a television network to her holdings in 2004 when her son, Alfred Liggins III, launched TV One. The company again saw opportunity within the black entertainment community, aiming to serve African-Americans over age 30 as BET, the other major black TV station, primarily serves African-American youth.

Though Liggins now runs things on a day-by-day basis, Hughes is still involved with the business, and remains the public face of the company, now known as Urban One. She says she will keep working on bringing media opportunities to her community.

“I don’t see it as success yet; I still see it as a work in progress,” Hughes says.


Visit urban1.com for more information.

This article was printed in the December 2018/January 2019 edition of B2B. To receive the magazine, click here to subscribe.