CNBC Special Report: The New Black Overclass

Collectively, young black athletes bring in billions of dollars a year in salary alone, not counting the money they earn from endorsements. According to Forbes, 31 of the 50 highest-paid professional athletes in America were African-American.

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Researchers at the University of Wisconsin-Madison compiled for this book statistics that show black players in the NFL, the NBA and Major League Baseball earned about $3.98 billion in their 2007-2008 seasons alone. Beyond that, the 19 highest-paid black rappers in America earned about $503 million in 2007. The combined $4.5 billion brought in by professional athletes and top rappers last year easily justifies the appellation of “overclass.”

As with most socio-economic categories, there is no hard-and-fast rule for what constitutes a Newbo. Newbos are, it goes without saying, black and wealthy. But wealth is an ephemeral concept. While the most famous and successful Newbos are millionaires many times over, their lesser-known compatriots may have far less, although their incomes are in the top 10 percent of all Americans.

Many of the most successful Newbos reach celebrity status at a young age and often hail from backgrounds that do not always value education. They seldom have more than a high-school diploma, in contrast to their lesser-known Newbo colleagues, many of whom pursue education to become lawyers, agents, financial advisors or producers.

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The lack of education among the most popular Newbos also fuels widespread scorn from society at large, which considers them a major reason that thousands of black children over-invest in dreams to become professional athletes or rap stars and under-invest in the educations that would backstop those often-unsuccessful dreams.

No single individual ever personifies perfectly the characteristics and life of a class of people. Combs comes close. But the person who comes closest to being the quintessential Newbo is the basketball star Lebron James. Anyone who knows the sport stands in awe of James’ phenomenal skill.

Basketball has, of course, provided James with immense wealth, not only in the form of his multi-million-dollar contract with the Cavaliers, but also through extremely lucrative endorsement deals, most notably with Nike, which signed him to $90-million shoe contract even before his NBA debut. But for all the fame and money that basketball brought to James, the game has been not an end in itself, but the path to a life that embodies many of the much lesser known aspects of being a Newbo.

James is acutely aware of the brand value of his name and persona and goes to extraordinary lengths to protect and promote that brand. The most successful Newbos understand personification of a brand — their public conduct, image and identity — and how it is directly connected to their commercial value.

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The Newbo phenomenon embraces the concept that people who establish notoriety doing one thing well can then leverage that success into other businesses. The brand becomes more valuable than the talent, whether for sports or entertainment. Newbos take their brand very seriously.

James had the foresight to realize that he had to build his brand while still in the NBA so that he could build a strong business to carry him past the eventual end of his basketball career. Today, he considers himself 80 percent basketball player and 20 percent businessman. Over time, that balance will gradually shift to 70 percent and 30 percent and eventually to almost entirely businessman.

“I realized early that this is the shortest career that you can have. I don’t know what the average career is for a player, but you can get maybe 15 years or less years out of this. And then, what are you going to fall back on? When I thought about it that way, it was easy. I didn’t want to be 16 years into the NBA and when it’s time to retire then I try to get into business.”

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