Black Capital Matters

At Players Capital Group, we have a unique perspective on racism, equality and the American dream. We are a group of former and current professional athletes of all races. We’ve all worked together in the ultimate industry of teamwork, where racism was an absolute detriment to our success. No professional team in sports could be successful under policies of exclusion, rather, to be non inclusive would guarantee spectacular failure. When, and only when that applies to the business world will true equality prevail and America realize its full potential. In this discussion, when we refer to “we” and “us”, we mean anyone opposed to systemic racism and inequality, no matter what your race. When we refer to “you” we are talking to black Americans who wonder why the gap never closes.

In our organization we place inordinate value on one form of intellectual capital, which is true understanding of reality, and here is the very real truth of what needs to happen for the black community and America to reach its full potential. The subject is complicated, and the solution requires a deep understanding of history, economics and psychology.

In 1947, Branch Rickey, the President of the Brooklyn Dodgers sought and obtained permission from his board of directors to sign and play Jackie Robinson, the first black player in any major professional sports league. Soon after that, the rest of major league baseball and the other major league sports integrated as well.

The importance of the integration of sports cannot be understated, nor can the bravery of Robinson, who never retaliated against his many racist antagonists, and Rickey and the Dodger organization, whose decision to integrate their team was very unpopular with their rival team owners. There were no league bylaws that prevented black athletes from participating, just an unwritten rule among team owners that blacks had to stay in the Negro Leagues.

Once the Dodgers integrated, the rest of the teams had to follow suit and reach into the vast talent pool of black athletes to remain competitive, especially in the National Football League.

Team pictures that looked like this:

Green Bay Packers 1939

Now look like this:

Greej Bay Packers 2019

Gradually, in a society where blacks and whites did not mix much, when Americans saw black and white athletes hugging each other in victory, attitudes changed. Black athletes became heroes to white Americans, because the brand loyalty to their favorite teams superseded their prejudice. And sports became a common bond between all Americans. Another thing happened: Blacks began to dominate the world of sport. They couldn’t be discriminated against, because to do so would render a team utterly uncompetitive.

Sadly, right now if you are a Black American and not a gifted athlete, you have nowhere near equal footing than your white counterparts and until we all realize a few things, nothing and we mean nothing will change. We are a capitalist society, and those with the capital make the rules. 

It is how these forms of capital are deployed by the power structure of the nation that determines society’s haves and have nots. Only when we understand capital in all its forms, understand the power structure of our country in its entirety and how wealth is created and preserved by that power structure do we have a chance of creating a level playing field. 

What most don’t understand is just how unlevel that playing field is right now.

Let’s take a look at the financial power structure and wealth generating institutions in our country. They are:

  • Private Equity
  • Publicly Traded Markets and Companies
  • Investment Banks
  • Elite Law Firms and Certified Public Accountants

Private Investment Groups

Here’s a typical private equity scenario. The group raises a fund, sometimes $500,000,000 or more. They then invest that $500m by buying into ten companies, with an average capital injection of $50m each.

They may then leverage that $50m for each acquisition with debt capital from an investment bank, bringing the value of the portfolio to $1 billion dollars.

They manage and grow the portfolio, eventually turning their billion dollars into three billion. They then liquidate the portfolio, pay back the investment bank, distribute the profits to their investors while taking a hefty management fee. Private equity creates enormous wealth for its investors and themselves. These groups operate at every stage of the development cycle, from startup to pre IPO. To become a big company, you need outside investment and expertise. You cannot bootstrap an Oracle or a Microsoft. 

Investment Banks

If you want to build a skyscraper, an industrial park, a factory or any large scale project that generates income and wealth you need the help of an investment bank. They can lend you a billion dollars and if you need more, they can syndicate an offering to their counterparts at other banks. Another thing that investment banks do is take successful companies public, creating incredible wealth for the owners. These companies are almost always built and backed by private equity equity firms. Massive wealth is created in this manner.

The Public Markets and Publicly Traded Companies

The New York Stock Exchange and NASDAQ are the two major stock exchanges in the United States. Publicly traded companies employ tens of millions. When privately held companies go public, the founders find themselves with incredible wealth that will sustain their families for generations.

Law Firms and Certified Public Accountants

Lawyers and accountants are to these entities what referees and statisticians are to the NFL. The biggest and best law and accounting firms in the country protect the wealth and influence of their clients, the investors and bankers. They lobby the government for tax breaks and regulatory relief. They protect the interests of the those who can pay their handsome fees. They hire the elite graduates of the elite universities.

The aforementioned groups control the system that funds entrepreneurship in America and generates massive wealth for their investors.  They are in complete control of the wealth building process.

Now let’s examine the level of participation of the black community in these centers of financial power.

Private equity in relation to the black community

Let’s look at a typical private equity group, Thompson Street Capital Partners in St. Louis, MO. They recently raised their sixth fund with $1.5 billion dollars. If they conservatively double the value of the 1.5 billion they just raised, the 49 members of the group will split 20% of that upside, an average of $6.12 million, with most going to the more senior members. Take a look at the “team page” they publish.

Do you think we just cherry picked that all-white management team? Let’s take a look at another group, Warburg Pincus in New York. One of the biggest in the country. Managing $60 billion of institutional capital. 

Thompson Street Capital Partners posts interviews with the entrepreneurs they have backed. Take a look:

What did you notice about them? Hint: They are not investing in you.

Do you think we just cherry picked that all-white group of rising entrepreneurs? This is standard all over the country. Go to Warburg’s website and look at the roster of companies they have invested in. We picked one at random but they’re all the same: Here’s the team page of just one:

Now let’s look at Blackstone. The biggest private equity group in the country with 649 billion dollars under management over four major business units.

Their website prominently features a black executive sitting at the head of a conference table:

But below you see the real Blackstone. This is their regular Monday morning executive meeting. They have a hundred or more people packed around one of the bigger conference tables on the planet. Important decisions are being made. No one at this table or even those relegated to the sidelines are black. You definitely do not belong at Blackstone.

The takeaway: Private equity is not hiring you and they are certainly not investing in you. It doesn’t matter who you look at out of the thousands of PE groups in America. The ratios are always the same.

Investment banking in relation to the black community

Here is JP Morgan Chase’s published statement on diversity:

Congratulations to these groups! Their leadership is approaching token levels.

Publicly traded companies in relation to the black community

The CEO’s of the Fortune 500 wield incredible power and influence. One in eight Americans is black but only one in 125 Fortune 500 CEO’s are black.

White glove law firms in relation to the black community

Below you will see one of the most blatantly dishonest claims regarding diversity ever:

Cravath has 76 partners, and not one of them is black. Here are the diversity statistics for the 4 most powerful firms in the country:

Cravath, Swaine & Moore
Wachtell, Lipton, Rosen & Katz
Sullivan and Cromwell
Skadden, Arps, Slate, Meagher & Flom

At the top 4 law firms in the country, there are 567 partners, and 9 of them are black.

Black Capital in relation to the white power structure

It’s not that the black community has no investable capital. They have plenty, they just can’t access it. Where do these private equity investors get their funds? 

If you are black, and you’re a bus driver in Atlanta or a cop in Chicago you probably have some kind of a pension plan. That pension plan has to invest and grow its funds to keep up with its obligations. And if you have a life insurance policy or hold any annuities, or even if you simply deposit money in a bank, you are invested in pools of capital that are used by the same machine that you are almost entirely excluded from. Billions and billions of dollars owned by black Americans are invested by this highly segregated heirarchy for their exclusive benefit.

The capital these firms manage and invest is a direct derivative of capital produced here:

Note: you are still picking the cotton!

Another form of capital is education, and black Americans are vastly underrepresented at the elite universities where companies like Facebook and Microsoft are launched and relationships with the privileged future success stories are established.

Roughly, African Americans make up about 12% of  our population. We estimate that less than 1% of the members of those influential firms are black. That is disturbing, because 24% of the 500,000 U.S. military personnel deployed to the Middle East during the Persian Gulf War were African-American. If you are black, you are more than welcome here:

But you are not welcome here:

So somehow this just doesn’t seem right:

The most elemental form of political capital is the vote, and your access to the polls is under vicious attack right now by the Republican Party, which has used Donald Trump’s ridiculous claims of voter fraud to enact legislation making it harder to vote. The Republican Party knows that this legislation will  disproportionally disenfranchise people of color. Do any of them really believe there was widespread voter fraud? Of course not! It’s just a way for them to make it harder for you to vote and win elections.

After taking a look at the institutions that control the financial capital of the country, what conclusions can we draw? Only one:

The equity position of the American dream in relation to the black community is utterly dismal. You are almost completely shut out of the wealth building process in our country, with little access to the capital it takes to build wealth, very little representation at the elite firms that run the system, very little representation at the elite universities where bright futures are guaranteed, and your ability to vote in serious jeopardy.

It is clear that the country could use a few more Branch Rickeys, and if true equality is to be achieved it will require a major struggle.

Can we ever level the playing field?

Not without judicious use of the capital we do have. Capital is anything that increases one’s ability to generate value across a wide range of categories. 

Financial capital is the money, credit, and other forms of funding that build wealth. 

Fortunately, money is not the form of capital required to win this fight. If we needed to  outspend those who wish to preserve the status quo we would have already lost. However, there are several forms of capital we have ignored, must recognize and make use of. 

Social Capital refers to the value of social networks to individuals embedded in them.

Emotional Capital Sometimes known as goodwill, is a positive or admiring attitude toward other people, countries, or organizations including but not limited to friendliness, favor, friendship and benevolence. We at Players Capital Group have an abundance of it, as we have the collective brand loyalty of most major league sports organizations, the same brand loyalty drove the first wave of integration in our society.

Legacy Capital is the capital you were born with or inherit. It includes money, family ties, connections and advantages not available to others born into less fortunate circumstances.

Political capital refers to the trust and influence that politicians or organizations earn or build up through the pursuit of policies that people like or respect.

Intellectual capital refers to the intangible assets that contribute to an organization or group’s success. These assets include education and understanding of advanced concepts, the expertise of employees, organizational processes, and sum of knowledge contained within the group.

Many intangible derivatives of intellectual capital can be harnessed to our advantage:

Truth and understanding is capital. A problem well defined is half solved.

Moral authority is capital. Very few Americans support policies that are clearly morally wrong.

Righteousness is capital. People will make sacrifices if they believe they are doing the right thing, and few people expend energy on causes they believe to be immoral.

Leadership is capital. Good leadership, that is. Someone has to fully understand the problem, organize people and promote an effective agenda.

Will is capital. Your will to be fully franchised in the American system must greatly outweigh the will of those who wish to disenfranchise us.

Bravery is capital. This fight may require a lot of bravery from a lot of people.

Branch Rickey was a brave man. He took a lot of shit from his fellow baseball executives. An even braver man might have been Martin Luther King, the most notable leader in the battle for racial equality in the country’s history. 

When King came  to prominence in 1955 leading the Birmingham bus boycott, he knew that his efforts would likely get him killed. He inspired tremendous will among opponents of discrimination, using the moral authority of the idea that all people should have equal opportunity and be judged on the content of their character.

King made brilliant use of the intangible capital he had available to him. He asked only for what was right; He created enormous political capital from the righteous stance of non-violence. The peaceful marches stirred emotion and gained traction on a daily basis, while providing no emotional or political capital to his opponents. The political capital he denied his opponents was the difference. He gave them nothing to work with. He knew that violence would only diminish the cause and provide inestimable political capital to the other side. Not enough of them were willing to publicly display the racist convictions necessary to deny people their obvious rights. He also understood that to deny capital to an oppressor is like accumulating your own capital. He knew that making blacks ride in the back of the bus wasn’t more important to the authorities than the money they paid to ride it. 

The boycott stretched on for more than a year, and participants made great sacrifices to carpool or walk miles to work and school when no other means were possible but when it was over, no one in the nation was ever required to ride in the back of the bus again.

What would have to happen to see real change

Unite under a team of leaders

Branch Rickey was an early proponent of equality. His and Dodger ownership unilaterally changed the way America perceived people of color. Martin Luther King was a leader who had the will and the oratorical skills to unite people of all races in a just cause. 

We believe the most effective leaders moving forward will be a coalition of current and former athletes, team owners and executives of all races.

Why? Athletes have the biggest bullhorn in the country. Only athletes could spread the message far and wide enough to achieve the massive buy-in required to consolidate power. Since 1947, professional athletes have been working with teammates of all races. There may be a front man for this movement, and we are looking for him now, but we intend to recruit hundreds and maybe thousands of pro athletes to lead the effort..

Understand that you can win

When the civil rights movement began in the 1950’s, a thirty minute phone call from New York to Los Angeles cost more than the average black family made in a week. Organizing was difficult. Ideas and strategies were incredibly hard to circulate. There was no internet, no conference calls, and no Zoom. Now communication is nearly free and instantaneous. Strategies can be shared to a wide range of participants for immediate action. This is capital that earlier activists did not have.


Conversely, those that plot and plan against racial equality are at the mercy of anyone with a cell phone and understand that they can be publicly shamed if they’re not extremely careful who they share their views with.

Have the courage of your convictions

Much of the early wealth in America was built on the backs of black slaves, most of America’s present day wealth is built by capital sources you’ve contributed to but have no access to, and without the brave military service disproportionately contributed by African Americans the country might not even exist. You will lose the fight convincingly if you do not feel the moral authority of your cause and create energy by acknowledging the outrage you feel knowing that you are still discriminated against on a daily basis.

You have every right to equality, which you demonstrably do not have. You’ve paid for it in blood. You must have the will and resolve to win this fight, which will require the same mindset that the black citizens of Birmingham had. Back then, to not participate in the boycott would earn you serious derision from your peers. 

Understand the urgency and protect your right  to vote

The people that support the most racist policies in America rarely miss the chance to vote, and the party they support is blatantly trying as hard as they can to make it as difficult as possible for you to vote. If you allow this to continue through even one more election cycle there will soon be a point of no return and you may never be able to recover. You must punish the Republican party for this effort and deliver the message that every time they try this you’ll turn out in droves and will deliver far more votes to their opponents than they can suppress.

Make smart use of the financial capital you do have

We’ve discussed the brilliant way Dr. King used the intangible capital he had available. Here are three strategies that make use of capital we have available now:

Strategically dispense your disposable income. The black community as a group may not have a lot of investable capital, but they do have enough disposable income to wield real economic clout. Imagine this: What if a trusted leader advised the black community that the bank that most supported their community was Bank Of America, and black depositors fled their competitors. What if sympathetic supporters of other races joined in support? What if you told everyone you were boycotting that you would go back to them only when diversity standards were mandatory? What would Chase and Wells Fargo do to get that business back? Would they mobilize their army of lobbyists?  Would they fully integrate? What would B of A do to keep that newfound business? Would they step up their lending to the black community? 

How many industries could this scenario be repeated in? There are important and powerful groups that passively and even actively discriminate against you that cannot afford to lose your business. The more united the front, the more effective the use cases. This strategy was never available to Dr. King, due to the limited and expensive communication of the day, or he would have certainly used it. One thing is for sure. The entities that lose our business don’t have the will to win this fight. Nobody really gave a shit where anyone else sat in the bus. We are quietly discussing these strategies in anticipation of rolling them out.

Affirmative action through the political process. The financial system must desegregate, just like the military and schools were required to. This initiative will encounter massive resistance from the power structure, but so did those folks in Birmingham who were tired of riding in the back of the bus. It wasn’t money that won that fight. It was leadership, will and bravery, combined with the moral authority of a righteous cause. 

Economic empowerment through investment. If a black American could buy a (pick a brand name) Black Cat (pick any commodity) set of tires instead of Firestones knowing it was produced by a black owned company, they could funnel their disposable income right back to their own community. The more they did this, the more they could create brand loyalty for themselves and get paid at every level of the supply chain.

Start building legacy capital

We’ve heard the phrase “white privilege” a lot. We don’t buy into that narrative. Being white doesn’t guarantee anyone anything. “White privilege” isn’t going to get you into the NBA, nor will it get you into Harvard. We don’t think that the current lack of diversity in the financial world is due to active and malevolent discrimination; rather is is a distinct lack  in the black community of what we call legacy capital.

If your dad was an investment banker or a private equity baron, you know you can do it yourself and follow in his footsteps. If your mom was an executive at a Fortune 500 company you know that if she can do it, you can do it, and she can give you solid career advice because she’s lived it. If your dad went to Harvard or your mom went to Princeton, you might have a better chance of being accepted, especially if your parents have donated to the university. You won’t feel out of place when you get there and you’ll have peers there as well. Right now, very few young black Americans are following their parents into these institutions because very few of their parents are included in them. 

Here’s one way Players Capital Group is creating legacy capital right now. For those progressive firms anxious to diversify we have a pipeline of accomplished black athletes looking for their next adventure. Former pro athletes make very good investment bankers and corporate executives. You might be surprised at the business acumen you will find among our ranks. Anyone who can perform in a professional sports environment can certainly excel in business. If you can understand an NFL playbook there is very little in the financial world that will be difficult for you. Through our relationships in the financial community, we have created special programs to license future bankers with FINRA and train future private equity executives in the wealth building process. 

When blacks gain more experience in these high level environments on a wider scale, they’ll start their own banking groups, equity groups and entrepreneurial ventures that will drive an upward trajectory for the black community. 

Get an effective message

Black Lives Matter is a movement that began in the United States after what many believe was the unjustified acquittal of the man accused of murdering Trayvon Martin, a black teenager in Sanford, FL. Subsequent deaths of black men in police custody including Eric Floyd and other situations attributed to systemic racism have fanned the flames of social justice.

We don’t think “Black Lives Matter” is an effective slogan. There is no call to action, which means your message has no imbedded capital. However, the slogan has given our opponents tremendous capital, which they use against us very effectively. Fox News has very successfully conflated the message with another destructive slogan, “Defund the Police”.  A mistake MLK would have never made.

At Players Capital Group, we believe a far more effective mantra is “Black Capital Matters”.

This is a mantra people can get behind, and one that can’t be used against us. Fox’s audience is predominately older and white. They do not have a sophisticated world view and they do not understand that the ginned up “election fraud” conspiracy theories are about nothing except  disenfranchising you. They are not bad people and for the most part do not support policies that are obviously morally wrong, but they vote Republican over 95% of the time, and the Republicans are the ones trying to keep you away from the polls.

Fox News, even in its craven disingenuity could not muster opposition to equal access to capital. They’ve been very successful promoting the idea that a vote for Democrats is a vote for lawlessness, but Black Capital Matters will not be about civil unrest. It will be about economic empowerment and fairness.

How can you argue that Black Capital Matters?  Are you going to reply with “All Capital Matters” or “Blue Capital Matters?”

We are not a political organization, and we don’t endorse any political party. But we are adamantly opposed to one thing: 

OH YES IT DOES TUCKER… IT HAS EVERYTHING TO DO WITH IT

 

Join us in this battle! We’re just getting started!

Please direct all inquiries to investors@playerscapital.net

 

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