Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!americast.com!americast.com!americast-post Newsgroups: americast.ibd From: americast-post@AmeriCast.Com Organization: American Cybercasting Approved: americast-post@AmeriCast.com Subject: \TITLE Date: Mon, 26 Oct 92 13:29:30 EST Message-ID: <8.1992Oct26.132931@AmeriCast.com> TITLE #m#gmramatlj#m#Edison Project's Chris Whittle: He Dreams Of A For-Profit Alternative To Public Schools Chuck Freadhoff Christopher Whittle, the 45-year old founder and chairman of Whittle Communications, likes to dream big. And right now, he's dreaming about education. Whittle's dream is to spirit America's schools into the 21st cen- tury through the Edison Project, which he only half jokingly calls the biggest start-up in the nation's history. The Edison Project is a plan to build and operate a private, for-profit na- tionwide network of innovative, high-tech schools. Whittle prom- ises that once they're built, the schools will be a "beacon" for public school reform. These private schools won't be the high- cost country academy type, either. Whittle says he will charge only about $5,500 a year in tuition - the same foto amount public schools spend, on average, for each child. Don't get the wrong idea, though. Whittle is no pie-in-the-sky ideal- ist. Underneath the easygoing charm and soft, barely perceptible southern accent is a shrewd businessman who understands the risks and rewards of such a venture. He expects the schools to turn a very handsome profit. "I'm not above business opportunities, and I realize that education is one of the largest categories (of spending) in America," Whittle said. Whittle knows it won't be easy. He expects that over the next four-and-a-half years, the Edison Project will need to raise $2.5 billion to pay the start-up costs. "You can't assemble that kind of venture capital (easily). You're not going to get it from one place," he said. "It's pretty complex but it's doable." Whit- tle said he'll "tap a number of markets," including public and private debt. "To grow, you have to be in the risk business," he said. Nor is Whittle Communications exactly an unknown company. A private company, it is owned by a consortium of electronics and publishing companies, including Time Warner Inc. and the Dutch Whittle Hopes To Build For-Profit Schools consumer electronics giant, Philips N.V. Whittle has made a career out of taking risks. His specialty seems to be doing things that others haven't thought of or that so-called experts have dismissed as foolhardy. Take his Channel One, for example. Channel One, a 12-minute pub- lic affairs and current events television show laced with commer- cials, is beamed to about 12,000 high schools and junior highs across the nation. Whittle gives about $50,000 of video equipment, including televi- sion sets, to each school. In exchange, they provide, in essence, a captive office by agreeing to show the programs during regular classroom time. Program Attacked When Whittle first introduced Channel One programs to schools in March 1989, many of the nation's mainstream education groups, in- cluding such household names as the National Parent Teacher Asso- ciation, fought against it. While critics disparage the program, it has been winning wider acceptance and is now shown in about 40% of the nation's junior and senior high schools, Whittle said. And, he said, "Channel One has made a profit since its first show. It's about a $100 million business." Making a profit is nothing new to Whittle. His career in publishing and broadcasting started with a student-oriented magazine, called "Knoxville In A Nutshell," he and friends launched while still undergraduates at the University of Tennessee in Knoxville. Then, after establish- ing a string of highly successful and carefully targeted maga- zines, Whittle and then-partner Phillip Moffitt bought Esquire Magazine in 1979. The magazine was on the verge of folding when they bought it, but they turned it around and produced a profit. Beginning with his first student-oriented publications, Whittle has earned a reputation as a super salesman, a reputation he denies. "I'm wildly overrated," he said with a chuckle. "A lot of people believe that the secret of selling is some kind of mag- ic." But the secret, he said, is simply "great ideas." One person impressed with Whittle's ideas was Benno Schmidt, the onetime president of Yale University, who resigned his top position at one of America's most prestigious universities to help run the Edison Project. Not everyone, however, is convinced that the Edison Project is such a great idea. Many doubt Whittle can deliver the type of education he's talking about for the price he's quoting. "You don't necessarily set your price before you find out what your costs are," said Raymond Domanico, director of the Center for Education Innovation at the Manhattan Institute in New York City. Domanico noted that Whittle plans to give scho- larships to about 20% of the students. That means, in effect, he'll be spending less per pupil than public schools. Domanico doubts Whittle can do that, espcially given the high cost of building schools from scratch. The Edison Project may have to raise its prices, he said. Once the tuition creeps up, putting Whittle's schools in competition with well- established prep schools, the Edison Project will no longer be the "beacon" for widespread education reform that Whittle envisions. Others say the biggest problem Whittle faces is the probable election of Bill Clinton. With a Democratic-controlled Congress and a Demo- crat in the White House, a school voucher system that includes private schools would not be assured. Without a voucher system - which allows parents choose which school they want to send their children to -some education ex- perts contend the Edison Project will fail. "The way it's feasi- ble is if some states will pass vouchers. That's the only way he's going to get public funds," which he needs to succeed, said Joe Nathan, a scholar who specializes in education reform at the Hubert H. Humphrey Institute of Public Affairs in Minneapolis. Whittle is unfazed by the objections, however. The Edison Project wasn't designed with vouchers in mind and doesn't need them to succeed, he says. It's a point he has made repeatedly. In a re- cent speech he said, "I can not say this strongly enough: We are not about (school) choice.)" Additionally, he said earlier this year that "the voucher system is not at all critical" to the Edison Project. When it comes to the Edison Project's cost, the critics have it backwards. Better doesn't have to mean more expensive. He com- pares the Edison Project to a jet airplane or even a light bulb. Jets go faster, are more efficient and use less fuel than the old fashioned prop planes, he said. "The light bulb is cheaper than the candle. It's a more efficient way to do it." When it comes to running schools, the Edison Project will have a big advantage, he said. "We don't have to cope with all the restrictions they (pub- lic schools) have, and that allows us to be very innovative." Not A Good Competitor One of the biggest mistakes people make is thinking he wants to compete with public schools. In fact, Whittle says he's not a good competitor. "We're good inventors. We'd like to go into worlds where no one else has been and set up camp," he said. But why the education world? He's been trying to reform education since he was 20 and ran for student body president at the univer- sity. His platform, Whittle says, was reforming the university. "I've been around this for a long time," he said. "I'm no dif- ferent from anyone else. I'd like to do my share." This article is copyright 1992 Investors Business Daily. Redis- tribution to other sites is not permitted except by arrangement with American Cybercasting Corporation. For more information, send-email to usa@AmeriCast.COM