Mercado-Valdes, Frank 1962–

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Frank Mercado-Valdes 1962–

Television executive

Sought Business Opportunities

Launched African Heritage Network

Started Ethnic Television Empire

Focused on the Future

Sources

Once a Junior Olympic boxer and Golden Gloves Lightweight Champion, Frank Mercado-Valdes used guts, determination, and passion to turn his love for African-American cinema into The Heritage Networks (THN), the most powerful syndicate of ethnic television programming in the United States, and a company worth nearly one-half billion dollars. “As a business owner, I believe that if you simply transform that which you really have a lot of passion about and like into a workable plan for business and capitalism, you can do well,” he told Black Enterprise. It is hard to argue with his success.

Sought Business Opportunities

Born on May 18, 1962, in New York, Frank Marcelino Mercado-Valdes was raised by his mother, Lidia Valdes, and her Cuban grandparents. His Puerto Rican father, Frank Mercado, was absent from the picture. At the age of 11, Mercado-Valdes and his mother left their tough South Bronx neighborhood for an equally tough barrio in Miami, Florida, where the young man ran into drug dealers, crime and gangs. “If you live in the ghetto, you can’t avoid people like that,” he told the Knight-Ridder/Tribune Business News. Yet Mercado-Valdes managed to stay out of trouble by throwing his own punches. In 1978 he became the Junior Olympic boxing champion of Florida and in 1979 gained the state’s Golden Gloves Lightweight Championship. A year later he made it to the quarter-finals for the U.S. Olympic boxing trials. The boxing ring was good schooling for Mercado-Valdes. Years later he would tell the Network Journal, “When I reflect on my career, it is the training I received as a competitive boxer that has led to my foundation as a businessman.”

Mercado-Valdes did a two-year stint in the U.S. Marines beginning in 1980. After his military service he headed for Miami-Dade College, where he earned an associate’s degree in 1983. The following year, with his sights set on becoming a lawyer, Mercado-Valdes enrolled in the University of Miami as a political science major. However, somewhere between his classes and his 1985 graduation, his plans to go to law school were shelved. Blame it on a beauty pageant. In 1984 he made up his mind to create the Miss Collegiate African-American Pageant. Local entrepreneurs helped sponsor the event, and it was quite successful. When several people suggested that it would do well on television, Mercado-Valdes’s interest in media programming was aroused. After earning a bachelor’s degree from the University of Miami in 1985, he moved back to New York where, as he recalled to Black Enterprise, “I didn’t even have a personal checking account.” But Mercado-Valdes was able to land his first big break when he was hired as a media coordinator for the 1988 Bush-Quayle presidential campaign. According to Black Enterprise, Mercado-Valdes became the “point man for black media.”

Following his stint in the world of politics, Mercado-Valdes turned back to television and sought out syndication for his pageant. Using the determination that would come to characterize his future business dealings, Mercado-Valdes got his show on the air in 1990 and became the youngest African American to serve as

At a Glance…

Born Frank Marcelimo Mercado-Valdes on May 18, 1962, in NY; son of Lidia Valdes and Frank Mercado. Education: Miami-Dade College, AA, 1983; University of Miami, BA, 1985. Military Service: U.S. Marine Corps, 1980-82.

Career: Bush/Quayle presidential campaign, media coordinator, 1988; The Heritage Networks (African Heritage Network), CEO, 1990-.

Memberships: National Association of Television Program Executives; African-American Film and Television Association; Golden Gloves of Florida Benefit Committee, 1987; Kappa Alpha Psi Scholarship Foundation, 1989-92; African-American Anti-Defamation Association, 1991-.

Awards: Junior Olympic Boxing Champion, FL, 1978; Golden Gloves Lightweight Champion, FL, 1979; Black Enterprise, one of the Top 50 Black Power Brokers In Entertainment, 2002.

Addresses: Office —The Heritage Networks, 50 Broadway, Suite 1003, New York, NY, 10004-3840.

executive producer of a television program. “Through this event I began to realize the economics of ethnic markets,” he told Entrepreneur Magazine. He soon produced a second television special, Stomp, about the practice of stepping among black fraternities and sororities. But business turned sour, and within three years Mercado-Valdes was broke. For a time he was without a home, sleeping in the doorways of New York City. It was a dire time for Mercado-Valdes, and he even entertained thoughts of suicide. However, his old fighting spirit would not abandon him. Described by Hollywood Reporter as “one of those people who seems to be genetically wired to be an entrepreneur,” it was not long before Mercado-Valdes was planning his next move.

Launched African Heritage Network

“I loved watching old black movies,” he told Black Enterprise, “but I never could find any of them on local television.” Nor on video store shelves. An idea began to form. If he could buy the syndication rights to films such as Cotton Comes to Harlem, Porgy ’n Bess, and Shaft, he could package them into a movie-of-the-month format and offer them to television stations in African-American markets across the country. It would be a perfect sell to advertisers who wanted to reach those markets. Mercado-Valdes named his venture African Heritage Network, and set about the grueling task of making it real.

“Many studios didn’t want to give up their product to an unknown company,” Mercado-Valdes told Black Enterprise. “In fact, many of them have a general policy that says that they don’t give up their projects to subdistributors who compete with them. So the first challenge for me was to convince them that I was not competing with them.” To do that, he chose films that were at least 20 years old, knowing that competitors would not be interested in showing them. To finance the syndication deal, Mercado-Valdes relied heavily on a $350,000 loan from the Pro-Line Corporation, which had been an advertiser on the pageant program. He also did a lot of sweet-talking. “I had to convince them to go ahead and let me license the movie and that I would pay them when the time came, before the movie aired,” he told Black Enterprise. It was not a problem for a man Crain’s New York Business described as “the kind of guy who makes an impression very quickly.” Thus, the African Heritage Network’s “Movie of the Month” series, hosted by African-American screen legends Ossie Davis and Ruby Dee, was launched in 1993.

By the end of its first year, the African Heritage Network had films showing in 80 markets across the country, reaching 88 percent of all African-American households. It also generated $1 million in revenue. In 1994 the network served as executive producer of A Tribute to Alex Haley, a program highlighting the accomplishments of the author of Roots. The following year Mercado-Valdes’s company had syndicated its movie package to more than 100 markets and had reached revenues of $8 million. It was only the beginning. “I am constantly thinking of the next idea,” he told Black Enterprise. “If I have any skill or gift as an entrepreneur, it’s that I never actually enjoy what’s happening now. I’m always thinking about what could happen in the future.”

Started Ethnic Television Empire

Mercado-Valdes’s next coup came in 1996, when he successfully negotiated the weekend syndication rights of the popular police drama New York Undercover. With the $8.5 million purchase, the African Heritage Network made history, becoming the first minority-owned company to purchase a major network series for syndication. By 1998 Mercado-Valdes had sold the show to 140 stations across the country, with the expectation that it would boost the network’s sales to $20 million over the next several years. By 2000 his predictions had come true. The company earned $35.5 million in revenue. It also earned syndication rights to another top television show, the comedy Moesha. The following year was dismal throughout the broadcasting industry, due to a recession and to the terrorist attacks of September 11 in New York City and Washington, D.C., but although the African Heritage Network lost millions of dollars, none of its 48 employees lost their jobs.

By 2002 Mercado-Valdes’s entrepreneurial drive had pushed African Heritage Networks into original programming. Top shows under the network’s banner included The Source: All Access, based on the popular hip-hop magazine, and N’Gear, a behind-the-scenes look at urban fashions, designers, and models. That same year the company changed its name to The Heritage Networks (THN). “It was a business decision based on who’s watching our so-called black shows,” Mercado-Valdes told Black Enterprise. “When we got into original programming… we found very consistently that 40 to 50 percent of our audience was not black. So we realized that our name wasn’t accurately reflecting the audience base, although it certainly reflected the cultural base upon which the programming was created.” The change also positioned them to strike new deals with Hollywood heavyweights. One result was Livin’ Large, a hip-hop version of Lifestyles of the Rich and Famous, produced in conjunction with the creators of The Cosby Show. “We are very fortunate because they don’t do these types of partnerships very often,” Mercado-Valdes told Black Enterprise. “But we came to them with the right idea at the right time.”

Mercado-Valdes seemed to possess a knack for having the right idea at the right moment. By focusing on the African-American market, he was able to build the largest black-owned marketing, sales, and distribution company in broadcast television. “We’re a company that has learned to succeed off of ratings that other people would starve on,” he told Hollywood Reporter. That success rang in revenues of $61.5 million for the year 2002. It also launched Heritage 215 Entertainment, a Washington-based production company, and Alto-Marc Communications, a Mercado-Valdes-fronted specialty advertising sales group that he eventually merged with the distribution company of Baruch Entertainment. Meanwhile THN landed syndication rights to such popular programs as The Steve Harvey Show, The Hughleys, and The Cosby Show.

Focused on the Future

Mercado-Valdes had developed THN into a force to be reckoned with. Some high-powered media players in Harlem discovered this in 2003, when the entrepreneur wrested syndication and production control of the long-running Showtime at the Apollo from its original creators. Percy Sutton was considered an icon in Harlem for having restored the historic Apollo Theater and for creating Showtime at the Apollo, the country’s number one syndicated show for black audiences. However, the Apollo Theater Foundation was not happy with the low profit margins they were seeing, and when Sutton’s contract came up in 1998, they sought out new syndicators. Mercado-Valdes stepped up, and found himself in the middle of a political war. There were many Sutton loyalists on the board of directors, and in the end Sutton was awarded the contract once again. Public outcry and a subsequent investigation by the district attorney resulted in an overhaul of the board. In 2002, when Sutton’s contract expired once again, the foundation was determined to open bidding for the show to other contenders. Mercado-Valdes again emerged as the leader, but this time he had additional cash and clout to back him up, and eventually landed the contract on a one-year provisional trial. He told Knight-Ridder/Tribune Business News that, with the help of Emmy Award-winning producer Suzanne de Passe, they turned the show from a “Kmart to a Bergdorf Goodman.” The theater saw higher profits as well. Yet Sutton was not ready to give up.

When Mercado-Valdes’s original contract with the Apollo expired in 2003, Sutton was there. And like the champion boxer he was trained to be, Mercado-Valdes was also ready, this time with media heavyweight Warner Brothers on his side. THN soon landed a five-year contract, with the show expected to push the network’s revenues up to $85 million. However, in typical fashion, Mercado-Valdes stayed focused on the future. According to Black Enterprise, “That future could include millions in advertising revenue and an extension of the Apollo brand that could eventually birth everything from CDs and Internet merchandising to TV programs.” By the end of 2003 THN had penetrated 212 television markets across the country and Mercado-Valdes was considering branching out into cable, film production, and soundtracks. Considering his history of knock-outs in the television arena as well as his own burning ambition, there is little reason to doubt that Mercado-Valdes will one day no longer be known as an African-American media mogul, but rather as a media-mogul, period.

Sources

Periodicals

Black Enterprise, February 2001; January 2003.

Crain’s New York Business, August 31, 1998, p. 9.

Hollywood Reporter, January 28, 2002, p. 12.

Knight Ridder/Tribune Business News, February 18, 2003.

On-line

“40 under 40,” Network Journal, www.tnj.com/articless/tnjevent/40/mercado.html (December 23, 2003).

“African Heritage Movie Network Finds Niche,” Black Enterprise, www.blackenterprise.com/Archiveopen.asp?source=/archive1997/08/0897-08.htm (December 23, 2003).

“Black Programming By Any Other Name,” Black Enterprise, www.blackenterprise.com/Archiveopen.asp?source=/articles/01232002jj.html (December 23, 2003).