CATHY HUGHES: Ms. Radio

Ebony, May, 2000 by Lynn Norment

Savvy entrepreneur is the most powerful woman in the industry

For most of her working life, Cathy Hughes has lived, breathed and sweated radio. She has sold advertising, collected payments, answered the phones, hired on-air personalities, served as general manager, and even hosted her own talk show. Through it all, one thing has remained constant: She loves radio. She is enthused by radio. She is energized by radio.

Her passion has paid off. Today, this hardworking, hands-on entrepreneur is sitting atop a $2 billion enterprise that includes 29 radio stations in nine of the top 20 markets for African-American listeners. She is the most powerful woman in radio and heads a business that she built from scratch--one listener, one employee, one community project and one radio station at a time.

Hughes' Radio One raised $172 million in an initial public offering in May 1999, establishing her as the first Black woman to head a publicly traded company. Radio One stock originally opened at $24 a share; it has risen as high as $97 per share. Negotiations to purchase additional radio stations are in progress.

With personal wealth close to $300 million, Hughes has come a long way from her humble upbringing in Omaha, Neb., and from her early years in radio when, as a young divorced mother, her escort to black-tie events and community functions was her son, Alfred C. Liggins III, now the president/CEO of Radio One. The mother-and-son team retain 71 percent of Radio One voting stock.

In 1973, while working at Howard University, Hughes was asked to head sales at the university's ailing WHUR radio station. In her first year, Hughes increased the station's revenues from $250,000 to $3 million. Under her leadership, the station rose to No. 3 from No. 38 in the market. At Howard, Hughes also is credited with creating the romantic evening radio format known as "Quiet Storm," which now is imitated in more than 400 markets nationwide. In 1978, Hughes took on responsibility for rebuilding WYCB-AM, a D.C. station that had been off the air for 12 years and which she transformed into the first 24-hour gospel station in the country.

With these successes under her belt, Hughes was ready to branch out. In 1980, she purchased her first radio station, WOL-AM (in D.C.), at a discount due to now-defunct Federal Communications Commission (FCC) rules that allowed stations in trouble with the FCC to sell at a discount to a minority buyer. Still, the price tag was almost $1 million, and she was required to have on hand another $500,000 to operate the station the first year. Rejection letters poured in until finally a female loan officer, new on the job at Chemical Bank, agreed to lend her $600,000. Hughes secured additional backing with help from venture capitalists Herbert P. Wilkins Sr. and Terry L. Jones of Syndicated Communications Inc., who continue to consult with Radio One.

Greeting Hughes when she walked into her new station was pure chaos. The previous owner had fired all the employees, and they had taken out their frustration on the property. Everything valuable was destroyed or missing. Hughes had to run home to get her personal LPs to keep the station on the air.

But the real battle was just beginning, for she had to somehow meet high monthly debt payments, with interest rates as high as 28 percent. She lost her house and her car was repossessed. For $50,000 she sold a rare white-gold pocket watch made by slaves that had belonged to her great-grandmother. And she actually moved into the station and slept in a sleeping bag. "During a period of about 18 months, I had to wash up in the public bathroom at the station," Hughes recalls. "Later I put a prefab shower in one of the offices. I cooked on a hot plate. I eventually made me an apartment in one of the offices. Though now it may sound like a terrible hardship, I loved being in the station for 24 hours. It was like a mother hen sitting on her egg waiting for it to hatch. Radio energized me. For 24 hours a day, I was available."

That is an understatement. Already the talk of the town, Hughes made a programming move that was considered radical, even suicidal. She changed the station's format from R&B music to 24-hour talk. Even her Black supporters thought she was crazy. "They told me Black people wouldn't listen to talk. radio," she recalls. "During those days, we got as many complaints from listeners as we did from advertisers that Black folks could not talk, that it was embarrassing to the race."

Rather than backing off, Hughes went a step further. Since finances and resources were tight, she took to the airwaves herself as a radio talk show host. Over 14 years, she built a reputation as an outspoken, straight-talking radio icon who has a close bond with the Black community. With strong rhetoric she defended the honor of several Black politicians and moved the community to take action on a number of issues. For instance, in 1986 she led a 13-week protest against the Washington Post Sunday magazine after it ran a story about a rap artist accused of murder on its first cover. Politicians flocked to her show to make major announcements. She criticized utility companies for their shut-off policies and encouraged listeners to buy Black art and to donate money for a number of charitable causes. Cathy Hughes became known as the "voice of the community." Not surprisingly, she also stirred controversy and drew criticism.