Wall St. And Business Wednesdays: Exclusive Q & A With Fred Terrell, Managing Partner and Chief Executive Officer of Provender Capital Group

While a great many Blacks could tell you the names of the most prominent Black politicians, musicians, athletes, and even corporate executives, very few would be able to identify the leading Black figures in the investment world - specifically private equity and venture capital. That reality is not hard to understand when one considers the historic importance that Blacks, en masse, have placed upon politics, the arts, and "rising the corporate ladder," when compared to the priority given to entrepreneurship. Many observers believe that is all changing today and that over the next couple of decades economic development, with entrepreneurship as the hub, will assume paramount importance for Black Americans.

One of the leaders being watched as a barometer of this possible paradigm shift is Mr. Fred Terrell, the just-under 50 year-old Founder, Managing Partner, and Chief Executive Officer Of Provender Capital Group, LLC. The Yale MBA ,who has served on the board of numerous companies including New York Life Insurance Company, recently garnered national attention for comments he is quoted as making in a Fortune magazine article, "The Next Black Power Movement" regarding the rise of Black entrepreneurship juxtaposed to the civil rights movement.

Mr. Terrell's comments warrant the attention, considering the influence that Provender Capital maintains in the Black economy. According to this month's Black Enterprise magazine, Provender Capital ranks 6th in the nation, among all Black private equity firms, with $145 million in capital under management. And although most Blacks are unfamiliar with Provender Capital, many are very much aware of the products and services offered by the companies in Provender's portfolio, which include, Carver Bancorp, Inc, Vanguarde Media, Inc., The Walking Company, Inc., Urban Studios, Inc., Prestige Brands International, Inc., PacPizza, LLC, Le Gourmet Chef, and The Diversity Channel Inc.

In a wide-ranging conversation, Fred Terrell recently spoke with BlackElectorate.com Publisher Cedric Muhammad, about the nature of venture capital and private equity; what motivates and guides Provender's investments; debt vs. equity; the publicized rise of Black entrepreneurship; and Mr. Terrell's views of the pros and cons of the wealth created by hip-hop culture.


****


Cedric Muhammad: Fred, the mission of Provender is "to nourish emerging companies, adding value through innovative financing and cultivating extraordinary growth through partnership." How do you define an "emerging company?"

Fred Terrell: Cedric, to Provender, an emerging market company is one that is in its early-stage and one in which we can play a meaningful role in its growth and expansion. If you look at our portfolio about half of it is made up of companies that serve or are run by African-Americans. In some quarters, "emerging" is used to describe African-American companies. And in more colloquial expression, the phrase is used to describe those companies that 'haven't been part of the real game before.' But the way we think of emerging is the same way that most investors do, and that is in terms of those businesses where we can put our expertise to use and make a real difference. We wouldn't want to be part of an investment where our involvement represented only money. We want to be part of an investment where the money is important but we also have a chance to actually help the entrepreneur by working hand-in-hand with him or her to make what they are working on a bigger idea than it currently is, and to enable them to pursue their vision to a fuller extent than they could prior to our involvement.

Cedric Muhammad: Now, when you say "emerging company" the premise would be that Provender would never get involved in investing in an idea that was unproven or untested in the marketplace?

Fred Terrell: Well, it is interesting that you should say that because in the private equity world there are firms that call themselves 'private equity firms' and then there are firms that call themselves 'venture capital firms' and the latter really is a group of investment firms that focus on this very early-stage idea company. This idea or company may be tested or proven in whatever its laboratory is. It may literally be a laboratory if it is in the biomedical field, for example. Or it could be tested in a small banking setting, for example, if it is a financial product. But the venture capital firms get involved in things that are as raw as ideas, as well as in companies that exist but aren't cash-flow positive - aren't yet profitable. Provender doesn't exclusively do that but we have gotten involved with companies that are very early-stage. One of the companies we have invested in - Vanguarde Media - we were involved with very early, at the beginning of its acquisition strategy, which started with Honey magazine and then quickly led to the creation of Savoy magazine and the acquisition of Heart And Soul from BET. And that was a company that did not exist before our capital went in, but the entrepreneurs involved had a lot of experience prior to the investment - having run Vibe magazine. Keith Clinkscales, is the person I am referring to in this case. He's a good man. So, that was early-stage, although not early, in terms of experience. The assets had experience. So it depends upon how you slice it. We would try not to be at the earliest of beginning stages. There are other firms that get involved in that stage - even earlier than we do. Provender tries to provide capital that helps the company expand as opposed to helping a company get started. We have done both but we try to focus more on the former category of investment.

Cedric Muhammad: In addition to managing Provender Opportunities Funds, Provender Capital Group selectively advises emerging companies on how to position their companies for success, including introducing small businesses, to alternative financing options and growth strategies. What are some of these innovative financing options?

Fred Terrell: In all candor, I don't think we have done anything that would be considered terribly profound or earth-breaking in this area.

Cedric Muhammad: Like popularizing leveraged buyouts (LBOs) like Michael Milken did?

Fred Terrell: Yeah, that phrase, "alternative financing options" for us does refer to the expertise that we have in capital markets and the background that we possess related to the various ways possible to monetize assets - using techniques like securitization. But in reality the techniques that we have been using on behalf of entrepreneurs have been reasonably traditional with a few bells and whistles utilized to enhance the opportunity for the entrepreneur or for us the investor. In many cases, the biggest thing you are concerned with are questions like - 'when do you take your money out?' and 'and how much money do you take out?' And you know, it gets down to pretty basic stuff. The venture capital business or private equity business on one level sounds very complicated and off the beaten path but in reality the principles are pretty basic. It goes something like this - as an investor, we put our money in and we want it back out. We want it back out as soon as we can have it, and oh, by the way we want to be paid something for the money we put in. And, yes you (entrepreneur receiving investment) have to pay us, and oh yeah, you are going to pay us before you pay yourself because it is our money. And oh, we are not going to pay ourselves and not pay you anything because you would quit. And if you quit, we don't have a company because we can't run it ourselves because we are financial intermediaries, not managing operators.

And so, what I have just gone through in very simple language with you Cedric, is very complicated stuff on paper!

So when I translate what I just said into a structure, the entrepreneur has to really get into the weeds, so to speak, and understand what we are doing in terms of structure because they have to know when they are going to get paid. You really have to think about the entire process and yourself in context. You, as an entrepreneur, have a great idea; you want to raise money for it; you have worked on it and it is your dream. But until you (the entrepreneur) pay me (the investor) back, you do not own your dream. And I, as an investor, care how you do and want to help wherever possible and appropriate because I want to make it work with the entrepreneur so that the dream becomes 'our dream.' I am a partner and have to be treated as such. I can't step on you because that wouldn't be fair and we never, at Provender, try to make any deal our last deal. We want people to think of us as people they want to work with because that leads to bigger opportunities. I personally believe that goodwill will go a lot further than good money. I think you have to keep your eye on both. And I think the firms that are only concerned with money in the short-run and pursue 'scorched-earth' practices aren't going to last very long. And I want to last long, have a great reputation and help my people if I can too.

Cedric Muhammad: Even though you stated that in traditional terms there is nothing extravagant or earth-breaking in what you are doing, we at BlackElectorate.com have been arguing that in terms of Black entrepreneurship and small businesses, we have been too dependent upon debt. So just the basic engagement with equity investments is something non-traditional. Do you agree with this thesis that the matching process that brings Black capital and talent together would take place more efficiently and productively when entrepreneurs and companies begin to more aggressively tap into equity markets as opposed to a continued reliance or dependence on debt?

Fred Terrell: Interesting idea. You have said a lot. As the entrepreneur the key things you want are liquidity - you want money and you want flexibility. And you know, the problem with debt is that you have to pay it back and you promise to pay it back. And when you borrow you can really encumber yourself by having interest payments that are very tough to handle, for a young company. So if you are a young company having this payment to make, similar to a mortgage payment - it is hard. Sometimes you just aren't generating enough money. And so you are right, Cedric. To the extent that you can tap into equity investment from venture capital funds or private equity funds, you are better off in as much as you are not encumbering yourself with very heavy debt costs which quite often in a venture situation turn out to be real ownership in the company anyway. Obviously, if you don't pay the venture capitalist back they want the company. So you can be in a situation where the debt owed to a venture capitalist exceeds the value of the company and thus, the venture capitalist owns the entire company. Debt can be very dangerous.

But I will tell you that the benefit of it is that it provides for the preservation of equity. You aren't immediately giving up any ownership of the company when you take on most debt. And I find that a lot of our minority entrepreneurs are very focused on the amount of the company they own. And I understand that. And I too, as a small business owner, am concerned with that. Provender Capital is an investment firm but it is a small business too. So it can be important to zealously protect your equity.

But having said that you can't be afraid to have partners because it is the balance of both equity and debt that makes a company more sound. If a company is generating a sufficient cash flow to pay off the loan that it borrows, then debt is cheaper than equity. You learn in Business 101 that an interest rate that you can manage of 8,9,10 or 15 percent, even, if you can pay the principal back in a timely way, and not get behind and trigger certain clauses that make bad things happen for debtors - you can be better off with debt than with equity. Why? Because the equity investor's money is expensive. It costs 20%, 25%, 30% and depending upon the venture and how risky it is it can cost 50% or higher, because as an investor, that is what I expect the return on my investment to earn. But the important bottom line consideration here is that there is no way to get around the cost of money. Debt is less expensive on the surface in terms of the interest rate, but you can owe that regular payment - like you do in a mortgage. And with equity you don't have that debt payment but you are taking on a partner and are losing the opportunity to share in all of the upside potential of the company because that partner is entitled to that for taking on the risk in the downside.

A lot of people think that we investors should be prepared to take a risk on the downside in the early stage of the company but are not worthy to participate in the reward of the upside of the company's growth. I often have to remind entrepreneurs, 'look baby I got you there; I am sure enough going to get paid if things go well' (laughter). And I think this is a lesson that entrepreneurs learn early on in the capital raising process.

Cedric Muhammad: Excellent, informative answer, Fred. In a recent article in Fortune magazine you were described as, feeling that you are contributing more to the civil rights movement as a private businessman running Provender, than you ever did as a member of Los Angeles government. Is this an accurate depiction of your sentiment and if so could you elaborate even further?

Fred Terrell: I think that having the latitude to invest capital into growing, emerging, African-American companies can in the long-run do a lot for our people that other forms of activism aren't able to do. I don't necessarily wish to compare the impact of making an investment in a Black entrepreneur with say, 100 civil rights marches, but I think my point is that real economic power is the golden goose. There is just no way around it. At the end of the day, Cedric, it is less important to me, as a 48-year old African-American man, to convince people that are racist, not to be racist. I don't care. I just think that those people who think like that are just going to go about their ways and I just don't have time to focus on them. When that racism leads to an unfair distribution of capital, I really care because if I have access to capital and I have an opportunity to invest in young businesses run by sharp Brothers and Sisters, or Asian Brothers and Sisters; or Latino Brothers and Sisters; or White Brothers and Sisters, I can do more to enhance equality and create a level playing field then I can by screaming about it. And that is because you look at the history of all oppressed people and you see that they didn't ultimately get to be successful and self-reliant by worrying about what other people thought about them. They became self-reliant and self-sufficient by thinking that if they could produce and build their own goods, services and businesses that are better than what is already out there - they would be respected. And they realized that if they had their own money, people would come to them. The thinking is that people can't ignore you if you own the supplier or own the product. And if I own a good product people will have to deal with me, because I am sitting in the middle of the chain. That is how respect is earned. After that, you may still have the odd situation where people may still be racist, but they have a nice smiley face on and they are dealing with you and everything still works out. But I don't care about what this odd person is thinking because I am already working on a solution that leads to the good people of the world, of all religions, enjoying life and living together - economic power which creates social change inside of communities. At the end of the day economic power is what allows us to send our kids to school; have the kind of communities that we want; the kind of housing that we want - all of that flows from having economic latitude and flexibility. And I think that is created by having the ability to invest in businesses that create things for our community. Bottom line. This is something that I feel strongly about. All I am saying is give me the latitude to have the money to invest and I will make my own way and we will be just fine because I don't care about necessarily hanging out here or there. I only care about providing for my family, my friends and community.

Cedric Muhammad: It is really great to be speaking with you about this subject. And as you know, at BlackElectorate.com, I have spoken with Robert Patrick Cooper, senior counsel at One United Bank, the nation's largest Black-owned bank about this very "hot subject" of capital accumulation in the Black community. We have seen the recent New York Times coverage on the subject of Black professionals starting businesses as well as the aforementioned Fortune magazine article, and at BlackElectorate.com we have prominently linked to several articles this year...

Fred Terrell: Yup...

Cedric Muhammad: ...that talk about a supposed, new rise in Black entrepreneurship. Now specifically, since over 450,000 jobs have been lost since the current administration took office, are you, as a premier Black venture capitalist, seeing this much-discussed new crop of Black entrepreneurs, particularly professionals? Are you noticing a new cadre of disappointed and frustrated Blacks leaving corporate America and suddenly choosing entrepreneurship? Is it real?

Fred Terrell: Yeah, I think it is real. But listen, I had a very good job at Credit Suisse First Boston. I was one of 100 partners in a very big firm with all of the benefits and prestige and economic rewards that go along with it. It was a very happy life. I didn't feel mistreated. In fact I felt the firm did very well by me as illustrated by their being the first investor in Provender, which is not an easy thing for a company like them to do for a former partner, because every former partner would love that type of support from their former firm. So, there certainly wasn't in my case, any sense of frustration leading me to do it but there was a sense of a mid-life crisis; and the support of my wife. And I just said to her, 'look sweetie, I think that we can build something out there that has more flexibility for us....' And I knew that, yes, it had more downside in the short-term, but it had more upside in the long-term. And moreover, it was a chance for me to pursue a vision about capital and bringing more people into the mix, so to speak. For instance, who is talking to this new crop of millionaires in the entertainment and sports industry? Who advises them about building not only their own wealth - through mutual funds and the other more commonplace investments but also more alternative investments in companies in ways that allow them to use their capital in ways that they would be proud of and grow the community? I mean, who does that? I don't think there are very many firms that can do that. There are not very many venture capital and private equity firms who have our complexion and make-up. I just felt at that time, as I do now, that there is a need. That is what drove me. I find that a lot of men and women are frustrated by the inability to get where they want to go as quickly as they hope. But I think that is not unique to African-Americans. I just think that there is a shakeout occurring on the Street. It is big-time and it is disproportionately affecting us in certain places and that is too bad and not right. But I think it will be the mother of invention in as much as I think it will force people to think about their options. There are some very talented people working in a lot of industries that can do this on their own given the confidence and given the backing from people like Provender, when it is appropriate for them to start their dream so I think the rise in entrepreneurship is real. I am excited about it. It is not something I would have done years ago because I didn't have the courage to do it; and the people who don't do it doesn't mean that they aren't courageous enough - it just means it isn't time. Sometimes I think, 'Geez, I could have done this 15 years ago', but the reality is that I wasn't ready. And were it not for a couple of things lining up the right way I still would not have been ready. It is hard and challenging but this is the most exciting time of my professional career.


Cedric Muhammad: I am glad to hear that. As you know, at BlackElectorate.com we have relationships with some of the best and most influential economists in the world.

Fred Terrell: Yes.

Cedric Muhammad: And they talk night and day about the effects of monetary policy, fiscal policy, and regulatory policy on entrepreneurs and small businesses, so I would like to ask you as someone who literally makes investment decisions - do you take into account or consideration the effect of capital gains tax rates or, say Federal Reserve monetary policy as you review and analyze prospect emerging companies?

Fred Terrell: Not specifically. I think we take into account economic trends on a broad-brush level and the ability or inability of a company to compete inside its given marketplace and how interest rates and the global political economy would affect the opportunities for a given company. But we are not economists and our analysis is not so micro with respect to capital gains, although it obviously plays a role because we are a company that takes advantage of that, as it relates to our exit strategy from an investment. As we exit, we get the benefit of the favorable treatment of capital gains. But more often than not our analysis is more product or company specific as it relates to broader trends in the economy or in that specific market. And also, any geopolitical forces that might affect the company for better or worse.

Cedric Muhammad: From your experience as a value-added investor and I love that Provender embraces that idea, because here, we talk a lot about not just providing capital but pairing talent and capital...

Fred Terrell: Yes.

Cedric Muhammad: And that seems what Provender is all about...

Fred Terrell: Right.

Cedric Muhammad: From that perspective or paradigm, as a value-added investor, which is a very holistic approach to investing in a company, what are the factors that make or break companies?

Fred Terrell: It is people ultimately. I gave the keynote address at the business school at Yale last year and what I talked about was the overriding, overarching importance of understanding people. It is a subject that transcends anything you can learn in business school. And as I look at companies with the hindsight of over 20 years in the investment banking or investment management business, I think that is still the most important thing that keeps people together or not - people inside of a company who have the ability and are willing to take a step back and try to understand how to walk in the shoes of others. Companies that are run by CEOs that are too strident and too set in their own ways, we try to avoid. We try to avoid the "star-syndrome." We don't avoid stars but look for those who are free of that syndrome. Take for example, Debbie Wright of Carver Bank or Keith Clinkscales - both of them are stars. But they are also "people-people." They have all of the attendant degrees. Two in this case. They are two Harvard Business School grads but they realize what they don't know, which is an important thing. As it relates to private equity and investors, you have to be careful in our business to not - to use the vernacular, 'overcook it' or over-negotiate or get too much out of a deal. This is especially important in an environment where company values are not doing as well, and where values are going below the expectations of investors and the earlier company projections. You are naturally going to be upset and disappointed in the short-run, as an investor, as we have been in some of our companies. But they aren't going to get better if you, as an investor, don't look at the glass half-full and encourage these entrepreneurs. You can't forget these are the people who brought you where you are. And things don't get better if they walk out the door. In some cases, now, they should walk out the door. But in order to keep their mind focused or as I say, 'their head in the game,' you have to consider the environment from the entrepreneur's perspective. As an investor, you can react when a company doesn't hit their projected numbers. You can decide to take more of the company and obtain more ownership. An investor can do this until they own the entire company, but the guys who run the company won't have anything to work for, and there will not remain any reason to work at the company. And I think one of the challenges for venture firms and private equity firms today, in a down-market environment, where valuations are going down instead of up, is determining just how much of the company you should own; and how much do you deserve to own? We all understand things have gone bad but one can't take it all. Some might need to be taken because investors need to pay back their investors, but if too much is taken, it is possible to rip the heart out of the company. And if an investor does that, they have actually broken the company and it is so hard to put it back together again. So I think you have to have incentives for the management, and incentives for the investors. And when those are out of sync, they can break a company up quickly.

There are a lot of other reasons that companies go bad. But most of it is poor execution. It isn't that the plan is bad but that the entrepreneur doesn't do it like they wrote it. Some entrepreneurs treat business plans like institutions treat studies - they conduct and develop them and then leave them on the shelf. And we are as guilty of that as anybody. And so as I say all of these things, please know that I do not claim to have any secret sauce. I think we are good at what we do. I think we are trying to build a very respectable firm and I think we have done a good job in doing that so far but if I had it completely figured out I wouldn't be here, so take it with a grain of salt (laughter).

Cedric Muhammad: We have talked to Russell Simmons of Phat Farm and Dame Dash of Roc-A-Fella and we have devoted quite a bit of coverage and analysis to the 'hip-hop entrepreneurs.' And you mentioned Keith Clinkscales and that whole booming sector. From what sectors of the economy are most of the emerging companies seeking investment from Provender coming? And do you see a disproportionate leaning toward art, sports and entertainment?

Fred Terrell: Interesting. We certainly see from African-American entrepreneurs opportunities in the sports and entertainment business, more in the entertainment area; because we have so much equity there and intellectual property. It is a very risky business though. The problem with it is that it is hard to raise money for a creative company - and this is Vanguarde included. And what I mean is that any company that makes its business by trying to figure out what another person likes, in a given month, is undertaking a difficult task. That's the music business. We all know that the preferences change like the weather. We all know that these music and fashion companies go from being hip to being unable to get onto the shelves in stores and unable to earn lucrative deals in the boardrooms. We all know that movies make a lot of money but attract investment from sources that care more about their egos than the bottom line. So for investors, when you look at all of these factors that are driven by the idiosyncrasies of the public and it scares you, because I am not smart enough to figure out what people like tomorrow. Fortunately Keith is smart enough to figure this out. But for me, it is hard enough to figure it out today, much less to be ahead of the curve and figure out where things are going. That takes a level of genius. And I take my hat off to guys like Sean Combs and Russell Simmons - particularly those two - because of their dogged adherence to their vision. It didn't pay off at first but it has gradually taken over everything. And while I don't know how long it will be around, it isn't showing any signs of slowing down. Maybe these two weren't burdened with a fancy education or thoughts of going into investment banking, you know?

Cedric Muhammad: (laughter):

Fred Terrell: When you have fewer options you have more focus on the thing you do know. And here, in Russell Simmons, is an example of a Brother who said to himself and out loud, 'I know this. I know it is cool. I know I have my hands on it and I am going to stick with it.' And he has created a culture, not single-handedly, of course. No one can single-handedly do that. There have been ingredients in hip-hop that have been around since Sly...

Cedric Muhammad: plus you have got the socio-economic factors working on everybody...

Fred Terrell: That's right. That's exactly right. And my quarrel - and of course with any good thing there are some bad things and I don't aim this personally at Russell Simmons - is that you can't explain to me why the public usage of the word 'nigger' is needed for edginess in hip-hop. I don't get it and I think the explanation offered to justify it is almost insulting. We have to as African-Americans retain a connectedness to our predecessors and I don't think that the common usage of the phrase "you're my nigga'" is helping the cause. I have kids and a generation ago I was playing in a band that thought that Sly and The Family Stone was god. I was falling on my knees playing bass guitar. You wouldn't know me. So, I am a lot squarer today than I was then and I also didn't grow up with the affluence that I have now gained, and having said all of that I think that it is confusing for the larger community, and Cedric, pardon me because this has nothing to do with investments...

Cedric Muhammad: no, actually it does...

Fred Terrell: ...I will use the example of my sixth-grade child. Why is he in the position of explaining the difference between the "nigga'" he does not want to be called and the word "nigga'" that he hears in the movie studio? What is that about? Why do these young people have to understand that distinction? Why do we think that we can intellectualize such degradation? You don't hear Jewish people going around calling themselves by similar terms of degradation? Do you think that Chinese people do that with each other? Does anybody else other than African-Americans do that? And my big criticism with the hip-hop movement is that it has helped to legitimize some things here that in my mind are the equivalent to selling our souls. And the price could never be high enough to make it worthwhile. Because every other race of people knows that that is a price too high. Nobody does that. And nobody crosses these lines. And if I had a Sister here, she would speak of how the word 'bitch' is handled in hip-hop. Why is it important to sell records by exploiting our race and our women? Nowadays, I do think that less of this is going on but we have no right to do that and we have made a lot of people very wealthy who will do that and who will continue to do that. And they are doing it all on the backs of our ancestors. Shame on you, I say.

Cedric Muhammad: So you think it is partially a case of financial capital devaluing human capital?

Fred Terrell: Exactly, well put. And the judge of whether this conduct is acceptable should not be a record company. If that were to be extended and we were to broaden our acceptance of the music industry as the arbiter of how our race and women are to be viewed, then we have just made them a judge and pimp. If we did that those in positions in power would go home to their own communities and laugh about it. And Cedric, I am infrequently this close-minded on anything but I would debate anybody on this. And I haven't had any argument about this but I am bringing this up in the context of our earlier discussion of the value of African-Americans in the entertainment industry and our wealth. We have to realize that in the process of creating this wealth we have been a little careless and it is going to cost us for generations and generations to come. Most of this may not be relevant to your purpose in interviewing me Cedric...

Cedric Muhammad: Well no, that isn't true, Fred because I used to manage Wu-Tang Clan and I see...

Fred Terrell: Well, listen, I have been to the gravel pit!

Cedric Muhammad: (laughter)

Fred Terrell: And I love to listen to them. And ODB is a guy I relate to and I listen to the music the same way you do. So I am not making a grandiose indictment. I enjoy much of it and I get it.

Cedric Muhammad: But I think the relevant and important point you are making in the context of a discussion on venture capital, emerging companies, and the prosperity of a community is that in the balance sheet of history there are some real costs associated with the wealth we are acquiring through the commercialization of this novelty, called Hip-Hop.

Fred Terrell: Absolutely! And there is no way to get around it and we will create a lot of millionaires and they will go out and have great parties in the Hamptons but what they will leave behind is the wreckage of culture. Wreckage - that other communities are not burdened with, and when all is said and done we will in the most unexpected or unintended manner have limited our opportunities without gaining any respect. History will record that we traded off what is not tradable. I don't negotiate my history. That is off the table. That is not for sale. No matter how dire our circumstances are we can never trade certain things. It would be analogous to how Iraqis looted their own ancient museum pieces recently. It was sad. But just look at that. Once you destroy antiquities and heritage like that you can't grow them again. They are gone. And once you have completely turned around the notion of what is acceptable language and what are acceptable descriptions for our people, it becomes indelibly etched in other people's minds and they lose respect for you as a negotiating partner because you are negotiating something that is off the table. In financial terms and in the context of deal-making, such things are off the table! I think hip-hop is wonderful but I do worry about it.

Cedric Muhammad: Well said. And I think that the manner in which you consider it and the context in which you weigh it merges culture and economics in a powerful way. This all relates to the word 'investment.' Thank you very much for your time and thoughts.

Fred Terrell: Thank You.

Wednesday, June 11, 2003