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
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. …