Real Times, Inc. Business Information, Profile, and History

Company Perspectives:

Real Times is dedicated to ending illiteracy, reducing crime and encouraging self-empowerment by re-establishing values in the family structure.

History of Real Times, Inc.

Real Times Inc. is the owner and publisher of the Chicago Defender, the most respected and history-laden of all publications written for the African American population. Real Times publishes the Defender daily in Chicago and also operates three other regional weekly newspapers: the Tri-City Defender in Memphis, the Michigan Chronicle in Detroit, and the New Pittsburgh Courier in Pittsburgh. Real Times' papers have a combined circulation of approximately 175,000 every week.

Early 20th Century Origins

While Real Times was established in 2002, the company's holdings trace their histories to the beginning of the 20th century. Robert Sengstacke Abbott, the founder of the Chicago Defender, the newspaper that would one day be the hallmark of Real Times Inc., was born around 1870 at St. Simons Island, Georgia, to ex-slaves. Abbott's father Thomas, a grocer whose business catered to other freed slaves, died when Robert was still an infant. Shortly afterwards his mother married John Sengstacke, a minister with a formal education who provided early schooling to his stepson and then encouraged him to continue his education. Abbott would eventually attend college at the Hampton Institute, the alma mater of Booker T. Washington, a figure who inspired Abbott's later work on behalf of African Americans. While at college, Abbott sang with the renowned Hampton Quartet, and he visited Chicago for the first time in 1891 when the Quartet sang at the World's Fair Columbian Exposition.

Abbott eventually moved to Chicago. Even before he did, he had been learning the newspaper trade. In addition to learning printing at Hampton Institute, he apprenticed with the Savannah Echo and worked occasionally on the Woodville Times, a paper founded by his stepfather. Once in Chicago, he looked for work as a printer, but his applications were consistently rejected in favor of the white immigrant labor that was streaming into the city. Thinking to learn something more marketable, he attended Kent College of Law. However, rather than improving his prospects, he ran headfirst into the same prejudice: an attorney with such dark skin, he was told by another black lawyer, would never be able to make a go of it in Chicago. After nearly a decade of scraping by with odd printing jobs and whatever else he could find, in May 1905, Abbott decided to create his own career, and he launched the Chicago Defender.

Reportedly starting with only 25 cents, which he used to buy pencils and notebooks, Abbott was nonetheless able to obtain a $25 line of credit with Western Newspaper Union, a small printer of weekly newspapers. A friend got him another credit line with the Chicago Tribune, where engraving could be done. The first issue of the Defender was simply a four-page handbill, written entirely by Abbott and printed in a run of about 300. Thanks to his meager financial situation Abbott was soon forced to give up his small rented office. However, his landlady graciously allowed him to use her dining room to produce the paper, a favor he repaid later by purchasing her a large house. Abbott distributed the papers himself at first through Chicago's black community, gathering fresh news for future editions as he did so. Early editions were penned by Abbott, but gradually he found writers willing to produce articles for no charge.

Embraced almost immediately by the black community in Chicago, the paper grew rapidly. By 1910 the paper's weekly print-run was too large for Western Newspaper Union's facilities, and printing was taken over by Daily Drover's Journal. The Defender's early success in Chicago was due in large measure to the first full-time employee hired by Abbott, managing editor J. Hockley Smiley. Smiley introduced the techniques of sensationalistic journalism upon which newspaper moguls William Randolph Hearst and Joseph Pulitzer had built empires. As important, however, was Abbott's crusading stance on issues of importance to African Americans. Abbott wrote the paper's platform, pledging to fight race segregation and prejudice in all its forms, to abolish lynching, to extend to black Americans equal economic, educational, and social opportunities, and to help enforce the right to vote.

While the political stance established the Defender was popular with its audience in Chicago, a novel system of distribution made the Defender into a paper of national scope. Chicago was a major hub of the nation's railroads, and every week bundles of the Defender were given to the touring black entertainers who rode the trains and the black Pullman porters who worked them. They, in turn, would leave copies at all of the towns along the train's route, particularly on the routes through the South where the largest percentage of African Americans lived at the time. When trains arrived in Chicago, the porters collected out-of-town newspapers and magazines left behind by passengers and gave them to the Defender, where the staff combed through them to find stories that could be used in upcoming editions.

Successes and Challenges in the 1920s-30s

By the onset of World War I, the Defender had established itself as the first black newspaper with a national circulation. Between 1915 and the 1920s Abbott would pursue perhaps the most famous crusade in the paper's history. "The Great Northern Drive" was an ongoing series of editorials and articles that urged southern blacks to leave that land of lynching and bitter segregation and move north where economic and social opportunities awaited them. The result was the onset of the so-called Great Migration, in which 1.5 million African Americans left the South and moved to northern cities such as Detroit, Pittsburgh, Cleveland, and Chicago, where they found work in factories deprived of German immigrant labor because of the war. Chicago's black population almost doubled between the years of 1916 and 1918 alone, to about 110,000.

Each issue of the paper was eagerly awaited in the South. Outside Chicago, the Defender had its biggest readership in Deep South states such as Georgia, Alabama, Mississippi, Kentucky, and Tennessee. By 1920, it boasted a weekly circulation of nearly 230,000 copies, although the company estimated that each paper sold was eventually passed on to another four readers. The paper was circulated and discussed, and even read aloud in churches. With its crusade for civil rights and its advocacy of the North, the Defender soon came to be viewed as a threat among white southerners. Reading or selling the paper in the South was even sometimes a dangerous act of rebellion, punishable by arrest or even lynching. Defender readers bought the paper for more than politics and civil rights news. It offered a health column, a full page of comics, regular news and gossip about entertainers and other public figures, and sensational tabloid crime and sex stories.

The Chicago race riot of 1919 was a turning point for the Defender. The paper was almost forced to shut down temporarily when white workers, for fear of reprisals, refused to print it. The edition came out, thanks to printing presses in nearby Gary, Indiana, but the incident showed Abbott how vulnerable the Defender was to the whims of white businesses. So the Robert S. Abbott Publishing Company, which had been established in 1918, purchased a large building on Chicago's South Side and installed its own printing plant. By ceasing to subcontract the work, the Defender cut its weekly costs by $1,000. Abbott's work force was comprised of both black and white laborers, and the company permitted the Chicago Typographical Union to unionize the facility. Thus, the Defender was the first black newspaper with an integrated work force and the first to unionize.

With circulation surpassing the 200,000 mark the Defender was an unquestioned success, and Abbott was a millionaire. The Defender relied on circulation rather than advertising for the bulk of its revenues. Copies sold for ten cents apiece in the 1920s, from which the paper garnered one cent in profit.

In 1929 Abbott launched a new publication, Abbott's Monthly. The magazine presented a broad range of feature articles and eventually photographs more than 15 years before Johnson Publishing introduced Ebony in 1945. Unfortunately, despite press runs of 100,000 and regular tinkering with the format, the magazine never caught on with the public. It folded in 1934.

The onset of the Great Depression also threatened the Defender itself with insolvency. With hundreds of thousands suddenly unemployed, virtually all spending on nonessential goods--like newspapers and magazines--stopped. The Defender's ten-cent cover price, more than twice that of its competitors, made the paper particularly unaffordable, and circulation fell dramatically. Nonetheless, the Defender, together with two new Abbott newspapers, the Michigan Chronicle and the Louisville (Kentucky) Defender, survived the hard times. A third contributor to the Defender's woes in the 1930s was Robert Abbott's declining health. At the end of the decade, on February 29, 1940, he died.

New Leadership in the 1940s

Before his death Abbott had chosen a successor, his 28-year-old nephew John H.H. Sengstacke. Sengstacke's life mirrored his uncle's in many respects. He too had worked for the family newspaper in Woodville, Georgia; he too had attended Hampton Institute; and he too had moved to Chicago after he graduated, going to work for the Defender and learning the operation one job at a time. At the same time he continued his education, taking classes at both Northwestern University and The Ohio State University. By the mid-1930s, Sengstacke was the Defender's general manager as well as Abbott's personal assistant.

As the country was plunging into World War II Sengstacke took over Robert S. Abbott Publishing. One of his first major achievements was the establishment--in the face of suspicion and doubt from other black publications--of a trade association of the black press, the National Negro Publishers Association (NNPA). After America's entry into the war, the company supported the "Double V" campaign (initiated by the Defender's main rival, the Pittsburgh Courier), which advocated victory over fascism overseas and victory over discrimination at home. The Defender's advertising revenues and circulation increased once again during the war, the latter reaching 100,000 throughout the nation by 1945. Two years later, although national circulation had climbed still further to 193,000, competition in the field had escalated, and the Defender was only the third largest African American newspaper in the country. The Pittsburgh Courier was the most-read with circulation of 277,000, followed by the Afro-American with 235,000.

By the late 1940s, a lengthy court battle with Abbott's widow over control of the Defender had been resolved in Sengstacke's favor. He set to work expanding the publishing empire. In addition to introducing new features and sections to the Defender, Sengstacke established new papers throughout the Midwest, including the Columbus News, St. Louis News, Toledo Press, and the Cincinnati News. In 1951 he launched the weekly Tri-City Defender in Memphis. The following year, the company acquired the venerable New York Age. During this time, home delivery of the Defender in Chicago was offered for the first time.

Sengstacke's boldest move came on February 6, 1956, when he relaunched the paper as the Chicago Daily Defender. From that point on the paper was published Monday through Thursday, along with a weekend edition that came out on Saturday. As circulation and revenues jumped, and new headquarters were established in downtown Chicago, the paper took on a greater scope with more in-depth reporting.

Industry Consolidation in the 1960s

The year 1965 saw the merger of the two giants of black journalism when Sengstacke purchased the Defender's longstanding rival, the Pittsburgh Courier. The Courier had grown largely through the efforts of Robert Lee Vann, an attorney practicing in Pittsburgh. In 1909 Vann was engaged by a group from the local Methodist church to draw up incorporation papers for a small newspaper it had been publishing for a couple of years. The Courier was largely the vehicle for the writings of one of the churchmen, Edwin Nathaniel Harleston. Vann helped the venture incorporate, and it was agreed that he would be paid in Courier stock. Before long he was not only the paper's editor and publisher, but its sole owner as well.

The Courier was the only paper serving Pittsburgh's black population of 25,000, and it gained popularity over the years for many of the same reasons as had the Defender. Like Abbott, Vann tried his hand at other publications in the 1920s, including The Competitor, a magazine that was apparently remarkably similar to Abbott's Monthly in concept and also folded after only a few months. While the Courier's revenues and circulation soared during the 1920s, the company plunged deep into debt just as the Great Depression was starting and flirted with bankruptcy but managed to survive and even thrive by the late 1930s. By 1938 circulation had passed 250,000 and Courier stockholders received a dividend for the first time since the early 1930s.

In October 1940, just nine months after the death of Robert Abbott, Robert Vann died. The paper continued to flourish under P.L. Prattis, a former Chicago Defender editor. During World War II the paper helped maintain readership with its Double V campaign, and by war's end, with circulation at an all-time high of 357,212 the Courier had become the most influential, widely read black newspaper in the United States. As it had for many of its rivals, however, the 1950s brought declining sales for the Courier. And by 1965, in the face of apparently irreversible losses, Chairman S. B Fuller advised the sale of the paper to the Defender. Under the new management, the paper was renamed The New Pittsburgh Courier and was completely revamped.

As the 1960s ended, the crusading days of the black press seemed to come to a close. The goals Robert Abbott had set in the Defender's 1910 platform had largely been achieved through the civil rights movement. Moreover, the white press began hiring Defender and Chronicle journalists, in a halting and extremely fragmented attempt to cover black issues. Furthermore, television was largely replacing newspapers as the main source of daily news for most people. The Defender was hit especially hard. By 1966 its circulation had dropped to about 50,000 copies daily. Another Sengstacke paper, the Michigan Chronicle, was able to sell that many copies of its weekly in a much smaller Detroit market. Circulation would continue to drop through the 1970s.

Declining Fortunes in the 1980s-90s

By the beginning of the 1980s Sengstacke Enterprises, a holding company that had taken over ownership of Robert S. Abbott Publishing, had ten newspapers in Illinois, Michigan, Pennsylvania, Ohio, Tennessee, Georgia, and Florida and had annual revenues of $7 million. In 1980 it was 73rd on Black Enterprise's list of the 100 largest African American businesses in the United States, but it was the last time the company would appear in the rankings. Two years later the Daily Defender had a circulation of a meager 18,000. By contrast the Courier in Pittsburgh was selling almost twice at many copies of its weekly, while the Michigan Chronicle, though smaller than other Sengstacke papers, was the most consistently profitable, probably because of its tight focus on local issues of interest to Detroiters.

By 1990 Sengstacke's newspaper holdings had shrunk by more half. The only papers he still owned were the Chicago Defender, the Michigan Chronicle, the Tri-State Defender, and the New Pittsburgh Courier. The flagship paper, the Defender, had fallen on particularly hard times. Its daily distribution in Chicago, a city of approximately 1.3 million African Americans, was estimated at 26,000--although no accurate figures had been collected in more than 25 years. Apparently, the once-great paper had failed to change with the times. First, changing demographics hit the paper hard. The Defender readership had moved from Chicago's Southside, the area of greatest distribution. Furthermore, the Defender and other papers had been supplanted by radio stations and dozens of black alternative weekly newspapers, many of which were distributed free of charge. Finally, after 50 years at the helm, John Sengstacke was resistant to change. One symbol of this resistance was the company's old headquarters on South Indiana in Chicago. Established by Robert Abbott in the 1920s, it was on the National Register of Historic Places, but had fallen into such a state of extreme disrepair that in the early 1990s it looked as if it would have to be demolished.

On May 29, 1997, change was forced on the Chicago Defender. After a long illness John H.H. Sengstacke died at age 84. Unlike his predecessor Robert S. Abbott, he had refused steadfastly to name a successor. As a result, upon his death his publishing companies were plunged into a half decade of chaos. The one thing Sengstacke definitely intended was that the Defender and its affiliated papers remain in the hands of his family. Before his death, he extracted a promise from his eldest grandchild, Myiti Sengstacke, that she would not allow the company to be sold. Some 23 years earlier, however, in 1975 he had arranged for most of his holdings to be put in trust with instructions that the trustee, Northern Trust Co., do whatever was necessary to provide for the future financial security of his grandchildren. Further complicating matters, Sengstacke also left a $4 million tax bill and no cash reserves with which to paid it.

Reorganization and the Birth of Real Times

In January 1998, the Northern Trust Co. announced that it was putting Sengstacke Enterprises, the owner of the Defender and its sister papers, up for sale. Most analysts believed that, even though the Sengstacke newspapers were performing poorly, they had great potential as money makers and might sell for up to $10 million. Chicagoans, however, reacted angrily at the thought that as sacred an institution as the Defender could fall into the hands of non-African American owners who might abandon it as an advocate of minorities and the poor. Efforts were put in motion to organize an African American group to purchase the company, which ultimately came to naught.

Board members of Sengstacke Enterprises, including Sengstacke's son, voted to approve the sale. However, Sengstacke's granddaughter Myiti, who had promised her grandfather not to let the company be sold, took advantage of a clause in the trust agreement to block it. She and two of her brothers began a search for a new trustee and an acceptable buyer. By December 1998 two contenders had emerged. PublicMediaWorks, an African-American investment group, offered $12.5 million in cash. Myiti Sengstacke, however, favored a $10 million recapitalization plan offered by Detroit businessman Don Barden that would give him a majority share in the firm, while placing the remaining holdings in the hands of the Sengstacke grandchildren, and pay off the tax debt.

Events moved at a snail's pace. In May 1999 the impasse seemed about to resolve itself when a Cook County Circuit Court authorized the new trustee that had in the meantime been found to accept Barden's offer. However, for reasons that were never made public, in the end Barden did not purchase the firm. A year later in summer 2000 another Circuit Court judge approved new $11 bid by PublicMediaWorks. That firm was unable to secure financing to close the purchase, however, and Sengstacke Enterprises remained on the market. Finally, in June 2002, a group headed by John Sengstacke's nephew, Thomas Sengstacke Picou, reached a deal to by the Defender for about $10 million--$3 million up front, another $3 million with interest over five years, and a final payment of $2.5. The new owner was to be called Real Times Inc.; it was a company founded specifically to purchase the newspapers. In the deal the new company acquired all of Sengstacke Enterprises' newspaper holdings which, included the Defender, the Michigan Chronicle, the New Pittsburgh Courier, and Memphis' Tri-State Defender.

Picou, who headed Real Times and became the publisher of the Defender, had a long history with his uncle, working as a reporter, editor, advertising manager, and eventually from 1981 to 1984, as president of the Defender. He had left the paper only when he disagreed with Sengstacke about how the paper should be managed. After the Real Times takeover, Sam Logan, one of the partners in Real Times Inc. returned to edit the Michigan Chronicle. He had left the paper after his own disagreements with Sengstacke and formed another weekly in Michigan, Front Page. The Real Times 2 LLC subsidiary was formed to purchase the new paper from Logan.

Real Times planned significant changes for the Defender. Sengstacke hoped to incorporate the best features of alternative weekly papers, which were one of the fastest growing segments of the newspaper market. In July 2004 media consultant Roland Martin was brought in to streamline and modernize the papers' operations and to get finances on solid footing. At the time, the paper had no full-time editor-in-chief and it was speculated that Martin would be offered the position after his 90-day contract expired. At the end of summer 2004, Real Times and the Defender prepared to give up the building that had been its headquarters since the 1950s. The company was looking at properties around downtown Chicago.

Principal Subsidiaries: Real Times 2 LLC; Sengstacke Enterprises.

Principal Competitors: Johnson Publications; Chicago Sun-Times; Detroit Free Press; New York Amsterdam News; Afro-American Newspapers.

Chronology

• Key Dates:
• 1905: Robert Sengstacke Abbot publishes the first issue of the Chicago Defender.
• 1918: Robert S. Abbott Publishing Company established.
• 1920: Defender puts its own printing facility into operation.
• 1940: Robert S. Abbott dies, and John Sengstacke takes over the reins of the company.
• 1940: Sengstacke forms the National Negro Publishers Association.
• 1952: The Defender purchases the New York Age.
• 1956: Daily edition of the Chicago Defender is introduced.
• 1975: John Sengstacke puts Defender papers in trust for his grandchildren.
• 1997: John Sengstacke dies at 84.
• 2002: Real Times, a group headed by John Sengstacke's nephew, acquires Sengstacke Enterprises, including the Defender newspaper.