How UBO funds its grooveBroadcaster-supported investment resource for minorities backs Harlem Web site 5/14/2000 08:00:00 PM Eastern
Urban Box Office Networks is an ultra-hip new Internet company with 250 creators, directors, producers, animators and techno-geeks all working away in a building on 125th Street in Harlem. It's also the first company to reap the benefits of the minority investment pool, the Quetzal Fund, created by broadcasters and Chase Manhattan bank,
The company's main site, www.ubo. com, is an online content aggregator targeted to the urban market.
The funders of Urban Box Office Networks are an interesting combination of old and new media. In addition to Quetzal, its backers are media investment banker Allen & Co., MIT Media Lab founder Nicholas Negroponte and Silicon Valley venture capitalist Flatiron Partners. Jimmy de Castro, president and CEO of AM/FM Radio and AM/FM Interactive, also is a private investor.
Quetzal is a $170-million fund founded by Clear Channel and then-CBS Corp. (now Viacom) and run by Chase Capital Partners (CCP), the private equity unit of Chase Manhattan Corp. Also invested are Belo Corp., Bonneville International, Cox Enterprises, The Walt Disney Co., Cumulus Media, Emmis Broadcasting, FOX Broadcasting, Granite Broadcasting, NBC, Radio One, Susquehanna Radio and Tribune Broadcasting.
CCP hopes to increase the fund's equity to $300 million before the end of year, says Reg Hollinger, Quetzal/ CCP's managing member.
"The companies we're investing in are very well-managed and tend to have a leadership position in their relative sectors," Hollinger says. "They tend to be growing fast and are most likely not in the start-up phase. We aren't looking at companies that began in a garage yesterday."
Broadcasters created the fund to provide capital for minority- and women-owned businesses that wished to enter the telecommunications field. Broadcasters began work on the fund two years ago, when FCC Chairman William Kennard and the Clinton administration were pushing the industry to find ways to increase minority participation in the business.
The fund was announced last November by the National Association of Broadcasters as the Prism Fund but, since that name was already in use, was renamed Quetzal (pronounced kate-zal), a South American bird of many colors that symbolizes the fund's multiethnic interests.