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Education: Schooling for Dollars

Can the king of captive-audience marketing turn a profit on grade schools? He'll try, with the help of Chicago principal Sylvia Peters.



Sylvia Peters's school stands out from the crowd amid the wreckage of Chicago's public school system. Peters, the principal of Alexandre Dumas Elementary School (6650 S. Ellis) has won high acclaim for her innovative approach to teaching inner-city kids. But Peters was last seen packing her bags to catch a plane for Tennessee. Where is she going in such a hurry? Off to join Chris Whittle's corporate education crusade.

Chris Whittle is in the education business. For him, starting a chain of schools is not much different from starting a chain of hotels, restaurants, or hardware stores. Like any successful entrepreneur, he's found a need and wants to fill it.

The need, as Whittle perceives it, is for new, efficient, for-profit schools to serve as an alternative to the failing public school system. With heavy corporate backing and strong ties to President Bush's Education Department, the man the New York Times called "the impresario of captive audience marketing" and Adweek knighted "the Che Guevara of media" thinks he can put a dent in public education's market share.

Whittle made a splash in Chicago in 1990, when his Channel One classroom news service for schools was banned by Superintendent Ted Kimbrough. This controversial program would have brought about $50,000 worth of TV sets, satellite dishes, and video equipment into participating Chicago schools in exchange for agreements to air, uninterrupted, Whittle's 12-minute news show--including 2 minutes of commercials--to a captive student audience. Sponsors included Nike, Snickers, and Burger King. As one of his first acts after taking office, Kimbrough nixed the deal, saying "We don't have to teach kids how to watch TV."

Whittle's program is already being viewed each day by eight million students, about one-third of all U.S. high school kids, and plans are under way for an elementary school version. But the program has been vilified by teachers' unions and the PTA and has run into a string of lawsuits in Texas, California, and North Carolina. Whittle's new scheme will circumvent this kind of trouble--he'll own the schools.

Recently, Whittle ran a full-page ad in the New York Times and other national newspapers to kick off his Edison Project, a plan to open 200 for-profit schools across the country over the next three years. The new schools, which he sees as a blueprint for a "new American school system," would create an expanded base for Channel One and other captive-marketing techniques, such as corporately sponsored textbooks and classroom wall charts.

There, in the ad, is a picture of Whittle's seven-member "core team," with Sylvia Peters standing out in the crowd of corporate and academic heavyweights. She stands out not only because she is the only African American on the team but also because she is the only public school educator and a seeming innocent among this high-powered and highly political crew.

Just look at the rest of the Edison Project's newly hired team. There's Chester "Checker" Finn, a Vanderbilt professor and an assistant U.S. secretary of education during the Reagan administration. Finn, an advocate of school vouchers, has also served as a pricey consultant for the Chicago School Finance Authority, coming into town from time to time to evaluate the progress of school reform or lack thereof.

Then there's John Chubb, senior fellow at the Brookings Institution. Along with Terry Moe, Chubb wrote one of the most influential and critical books on public education, Politics, Markets and America's Schools (1989), which is basically an argument for letting the market and private enterprise play the dominant role in deciding whether schools survive. Chubb, another voucher-ite, has the ear of education secretary Lamar Alexander and was influential in helping to craft Bush's "America 2000" plan.

Next come the media experts, Newsweek editor Dominique Browning and former Esquire editor in chief Lee Eisenberg (Whittle was an owner of Esquire from 1979 to 1986). Then there's writer Nancy Hechinger, who comes out of Apple Computer and Lucasfilm and who founded Hands On Media, a company that sells schools "interactive multimedia" products (touchable maps), and Daniel Biederman, president of the Bryant Park, Grand Central, and 34th Street partnerships in New York City, nonprofit community-development corporations that provide property owners and tenants with $15 million in alternative city services ranging from security and sanitation to care for the homeless.

Sylvia Peters is now on leave from her south-side school, where under her guidance attendance rates have risen to an astonishing 94 percent. Also rising dramatically has been the self-esteem of many of her troubled students. Dumas is a 100 percent black elementary school at which good things are happening--things that aren't all measurable by standardized test results. Although it is housed in a scarred cinder-block building, there is no graffiti on the walls and no violence inside the building. Black parents who used to bus their kids out of the community are now standing in line to get them into Dumas.

Peters was one of the first principals in Chicago to introduce literature-based, whole-language programs throughout the school (instead of the old basal reading programs). She has assembled a talented staff to teach her child-centered curriculum and doesn't buy the notion that black children can't learn in an all-black school. "Forget the idea that black children can't learn unless they're sitting next to a white child," Peters told Time magazine. "Some values are universal, like self-love, respect, integrity, and perseverance." She promotes these values in a candle-lighting ceremony at the beginning of each school year for new eighth graders. "We tell them, 'This is your beginning of becoming young black adults. There is nothing wrong with you.'"

How did Peters, a dedicated defender of inner-city schools and public-education reform, come to hook up with wheeler-dealer Whittle? The answer is simple--the MacNeil/Lehrer NewsHour.

"I never heard of Whittle until we did MacNeil/Lehrer together," says Peters. "I was listening to all this business about the Saturn School [an educational concept being marketed in Florida that Whittle has borrowed heavily from] and all his technology and I was opposed to it. To me, technology is not the answer to education. To think you can put a room full of computers together with a bunch of kids and something good will automatically come of it is foolish. You need to understand the humanity of children before you can teach them." As for vouchers, Peters says she has an "open mind."

After the show, however, Whittle was able to convince Peters that his project was "wide open" and that her views on education would be heard and her innovative ideas respected. Peters and the six other team members will become limited partners in the project. Most of these partners will move to Whittle's campuslike headquarters in Knoxville. Peters says she would like to return to Dumas "in about four years."

She says, "I'm going because I believe we must be free to think about alternatives to the big-city systems that are failing our kids." But if the Edison Project isn't as open as promised, she warns, "I may be back sooner than expected."

Peters's departure has caused quite a stir in local school circles. Ron Sistrunk lives on the south side. He serves as executive director of the Citywide Coalition for School Reform and has no beef with Peters's leaving Chicago "if she's going there to talk about innovative ways to teach our kids." Sistrunk has eight of his children in Chicago public schools and he's on the local school councils at King High and Price Elementary. "I don't have any problem with Mrs. Peters advancing her professional career either," said Sistrunk.

Sistrunk backed Channel One when it came up before the interim school board in 1990. The board, according to Sistrunk, abdicated its responsibility by allowing Kimbrough to decide the fate of the program. Kimbrough, who had just arrived in town after serving as Compton, California's superintendent, rejected Whittle's program based on "bad experiences" with Channel One in California. Sistrunk argues, "That decision should have been made by the board, with input from the local schools.

"Channel One is a great tool," said Sistrunk, "if teachers use it as part of a developed curriculum, not as a baby-sitter. It could be the most valuable thing since sliced bread because kids, especially minority kids, just don't read the newspapers."

Whittle's adventures into the captive-audience market began when he was a college student and put out Nutshell, a nationally created but locally tailored magazine-guide-to-the-campus that was given free to college students. In the early 70s, Nutshell grew into the 13-30 Corporation, the forerunner of Whittle Communications, which he founded with four college buddies to focus advertising on the burgeoning youth (13 to 30) market. In 1979, Whittle and partner Phillip Moffitt moved to New York and bought and rescued a drowning Esquire magazine.

In 1966, the partners parted. Moffitt got Esquire, which he later sold to the Hearst Group, and Whittle got the 13-30 Corporation. Everyone thought Moffitt got the best of the deal but Whittle Communications has turned out to be the most dynamic media company in modern times. In 1988 he sold half the company to Time, Inc. for $185 million. A year later he began testing Channel One.

Whittle's marketing genius is seen not simply in his targeting of the captive-audience market. His real talent is in creating this market by making a Faustian compact--offering the target audience "something for nothing" in exchange for what is actually a little bit of freedom. Whittle then attaches himself to his target with the voracity of a pit bull on a postman's leg.

One of his first and most successful targets was the doctor's waiting room, which he invaded with his glossy Special Reports. This magazine was distributed free to doctors so long as they limited the number of other periodicals they displayed. Advertising was sold on the basis that each copy would be read by 50 readers. In its first six weeks, Whittle says, the slick health-oriented magazine brought in almost $40 million in revenues. "To put that in perspective," Whittle told Inc. magazine, "the most successful conventional magazine ever launched was People, which did $8 million in its first year of business."

The $60 million for the Edison Project's design phase is coming from Whittle Communications and its major owners--Time Warner, Inc. (which owns 50 percent of Whittle and has the option to buy the rest next year), the Dutch-based Phillips Electronics, and the British-owned Associated Newspapers Holdings Ltd. The company's marketing and editorial divisions are organized into four groups: Whittle Health Network, Whittle Educational Network, Whittle Books, and Whittle Ventures. The goals: "to preserve the entrepreneurial spirit and ensure a constant flow of new ideas."

Time Warner's CEO, Reg Brack, loves it. "Even the most conservative estimate has them [Whittle] growing at 30 percent a year, three to five years out," Brack told Adweek magazine. "No other company on any continent that I can imagine has a track record like that in this environment."

Whittle is planning on investments of from $2.5 to $3 billion to open his first 200 schools, which will teach elementary grades one through six. The plan is to launch the 200 schools by 1996 and 1,000 by the year 2010. Ultimately, Whittle envisions selling his schools to "as many as two million students." To put that in perspective, of the 47 million school children in America, 5.2 million or 11 percent attend private schools. Of these, 812,879 kids attend nonsectarian schools while the great majority attend parochial schools. If Whittle reaches even half of his target market, he will be far and away the largest single private school educator in the U.S. and the prime recipient of vouchers funds if, as expected, those funds cannot be used for parochial school tuition.

Under the Edison plan, state-of-the-art facilities will operate at about the same per-pupil cost as nearby public schools. Whittle has stressed that he does not want to build an "elitist" parallel private system. That would be cutting away the very students (customers) he wants to reach. Students, he promises, will be selected randomly for openings in the schools. Twenty percent of the slots will be taken by full-scholarship students. He denies that the Edison Project will harm public education, because his design team will be limited to innovations that can be replicated in public schools.

For every person like Sylvia Peters who is keeping an open mind, there are many in the local education community who don't like Whittle's angle. Homewood-Flossmoor High School stopped Channel One because protesting parents, teachers, and students didn't like surrendering curriculum decisions to private business. Last year, the Arlington Heights school district also said no.

Another nay sayer is James Deanes, president of Chicago's Parent Community Council. "America has not yet invested in public education," said Deanes, "and now we have billions being put into a system designed to destroy public education." Deanes predicted that voucher bills in Springfield would coincide with the arrival of Whittle schools and would channel public money into Whittle's pockets.

Ron Sistrunk, who sees himself as a friend of Channel One, parts company with Whittle when it comes to the Edison Project. "Where we separate is on building more private institutions," said Sistrunk angrily. "He needs to work within the local school system." An investment in public schools even partially the size of the one Whittle wants to make in private schools, Sistrunk believes, would cause test scores to skyrocket. "Put a chunk of that $3 billion into public education," Sistrunk implores. "Identify 300 schools that need the most help and watch how much things change. He could still sell sneakers and Snickers while scores go up."

Another group targeting Whittle's program is the unions. Ellen Shearer, a spokesperson for the 780,000-member American Federation of Teachers, says the Edison Project "is diverting attention and focus from the problems of the public schools."

On the other hand, antiunion forces are forming a new independent association of nonunion teachers as an alternative to the AFT and the National Education Association (NEA). "We are the wave of the future," said Davis Bingham, executive director of the 54,000-member Association of Texas Professional Educators, the largest affiliate of the embryonic national group, which has not yet been formally named. With its base of conservative teachers and sponsorship by such right-wing groups as the National Right to Work Committee, the new association could provide Whittle--if he wants one--with an alternative to the mainstream teachers' unions.

Can Whittle schools turn a profit? According to the Boston Globe the Edison schools "would depend initially on tuitions," in addition to the money earned from advertising consumer products, but "would look eventually to raise additional money by marketing to public schools . . . " Whittle insists "that making money is not his prime motivation," says the Globe, but acknowledges "an important obligation to shareholders."

"What I do best," says Whittle, who concedes that he is interested in the private-voucher concept, "is restructure things. . . . I think that's what is required in education reform today."

Whittle's plan, according to the New York Times, "runs parallel to the new education plan unveiled by President Bush and Education Secretary Lamar Alexander"--a plan that calls for grants to groups that set up experimental schools, and for the building of more than 500 "choice schools" by 1996. His schools also complement the Bush-Alexander view that public funds should be used to pay for private tuition. By positioning himself early, Whittle stands to become the biggest single recipient of public voucher funds in the country as well as the dominant policy voice in American education circles.

Most members of the Chicago school community doubt that the Illinois legislature would pass a voucher plan. Democratic state senator Arthur Berman said voucher bills "have surfaced unsuccessfully every year." Berman, a sponsor of the state's School Reform Act, said there will be a broad "shell bill" on education in the present legislative session that could be used to push another piece of provoucher legislation. But Berman, who opposes vouchers, doubts its chance of success.

However, there are factors in Springfield that bode well for Whittle. With Governor Edgar expressing open support and Republican voting power likely to increase after the legislative remap, vouchers could fare better than they have in the past. Furthermore, nearby Milwaukee is already experimenting with a voucher plan and Pennsylvania and Maryland are on the verge of passing choice plans of their own. By the time Whittle's schools begin opening, he expects this trend to have spread across the nation.

Whittle's christening of the Edison Project came only five weeks after Alexander announced his plan. The coincidence in timing raised some observers' eyebrows. Whittle frequently refers to his concept as "the New American School"--which is the term used by Bush and Alexander to describe the model schools that they intend to fund. How can this convergence of timing and language be explained?

Author Jonathan Kozol's best-selling Savage Inequalities exposes the "two-tier" American education system for rich and poor. Addressing a Chicago education conference in March, Kozol highlighted Whittle's "longtime friendship" with Secretary Alexander. Alexander served on the board of Mr. Whittle's corporation. "Until quite recently," Kozol pointed out, "he also served as a consultant to, and held stock in, the corporation." In fact, Alexander's investment brought him a remarkable return. Having paid $10,000 in July of 1989 to buy four shares in Whittle's firm, he sold them back to Whittle for $330,000 five months later. Kozol speculated on the possibility of Alexander rejoining Whittle's firm after his sojourn as secretary of education ends. Others say that Alexander, the former governor of Tennessee, will run for president in 1996. Whittle himself had ambitions to be governor of Tennessee before he underwent what the Economist called "something of a conversion." Rather than seek public office he decided to bring about public reform from the private sector. "He is, in effect, declaring war on public schools," said the Economist.

The deterioration of big urban school systems like Chicago's has sparked a school reform effort based on measures like site-based management, decentralization of resources and authority, and multicultural curriculum. But progress toward reform is moving slowly, and property owners, who bear the financial burden, are growing resentful.

Whittle has all this and more going for him as he builds a publicly funded private alternative. His close ties with the most conservative forces in the Washington educational establishment mark him as a man who is selling values, attitudes, and, no doubt, a set of political ideas as well.

Critics warn that those who buy into Whittle's plan may be only a few years from handing over the most important decisions about the education and training of our kids to the education privateers.

"It's an ugly choice," says Beverly Walker, executive director of North Central Regional Educational Laboratories (NCREL), a reform-oriented, federally funded think tank that brings research techniques to midwest schools. Walker admits she would "feel strange" telling people to reject Whittle's educational resources when they have such sparse resources of their own. "It's easy for the resource rich to say to the resource poor, 'don't take it,'" says Walker. "But Whittle is a threat. Poor people cannot afford to allow the public sector to be pushed out of the way."

Art accompanying story in printed newspaper (not available in this archive): illustration/Chuck Nitti.

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