Edison Project's Future Hinges on Financing Chris Whittle Wants to Open Several Innovative, For-Profit Public Schools by the End of Next Summer, but School Administrators, Wary of Costs, Are Reluctant to Sign Up

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COME up with a million dollars by February or leave town. That's what a Colorado Springs, Colo., elementary school last week told the Edison Project, a New York City-based effort to run public schools for profit.

"There's lots of questions as to whether or not they can do it," says Jim Barren, the principal at Roosevelt Elementary School, which will become one of the first Edison schools if the venture can prove its financial mettle. "I will feel better if they come up with the money."

Skeptics say survival of the entire Edison Project - launched in the spring of 1992 to merge entreprenurial energy and efficiency with the latest in education at no extra cost to a community - hangs on the success of current, frantic efforts to find adequate financing in the next few weeks.

The original vision of project founder Christopher Whittle was 1,000 private schools built from scratch. But with financing possibilities limited, the current goal is to open several schools by the end of next summer. Yet, local administrators worry about the financial viability of the program and are reluctant to sign up. And some, such as Roosevelt Elementary, want to see money upfront - in an escrow account - before they sign a contract.

At the center of the uncertainty stands Mr. Whittle, the one-time master of a vast and growing media empire, Whittle Communications LP, with $200 million in annual revenues. Now, financial troubles have forced Whittle to shut down or sell off virtually all his advertising-driven media properties, including Channel One, which broadcasts news and commercials into nearly 12,000 schools. Whittle is confident

Despite recent difficulties, Whittle exudes his trademark exuberance about the project. "As we speak, we are putting the finishing touches on the financing, which we call the launch financing, which actually is the money that opens the schools," he said in an interview. "We're pretty optimistic about that and think we will have something to announce soon."

Whittle has enjoyed notable past successes. His first big splash came in the 1980s when he nursed Esquire magazine back to fiscal health. He then invented Channel One, which has profited tidily from advertisers' desires to appeal to schoolchildren.

These successes funded the trappings of his empire. In 1991, Whittle opened a $50 million colonial-style corporate headquarters in Knoxville, Tenn., where waiters served the boss in a private wood-paneled dining room. Comforts also extended to top executives, whose annual salaries ranged from $500,000 to $1 million, according to ex-Whittle executives.

By the 1990s, however, Whittle's two major health-related ventures - magazines in doctors' waiting rooms and a medical TV channel - were losing between $1 million and $2 million a week, a former Whittle executive estimates. "In a nutshell, our education businesses fared fine, and our health businesses hit the wall and cost us lots of money," Whittle says.

Adds Tom Ingram, a former Whittle vice president: The firm "grew too fast without enough capital backing and without proper management, in some cases."

Insiders say Whittle, himself, deserves much of the blame because he did not smell trouble until it was too late. "He always thought he could sell his way out of trouble," says one former top Whittle executive. "That, of course, created financial drain since many of these properties lasted longer than they should have. …