Edison Schools getting failing grade from investors
From Thursday, October 24, 2002
The Wall Street Journal (subscription required) on the problems facing Edison (which lost $86 million on $465 million in revenue in the fiscal year that ended in June) as it tries to finetune its strategy for running public schools and facing increasing challenges from organizations like the Gap founders-funded KIPP network of schools.
Edison Schools, private enterprise's biggest effort to change the face of public education, is confronting questions about its ability to survive.
The brainchild of media and advertising entrepreneur Christopher Whittle, Edison Schools Inc. has management contracts to operate more than 100 schools enrolling 80,000 students. Touted at its inception in 1992 as an innovative way to reform education while at the same time rewarding investors, Edison is praised by many educators who say that its curriculum is well conceived and its insistence on technology, longer school days and increased teacher training can only help students.
...Edison in recent months has said it would overhaul its operating strategy, cut unprofitable contracts and rein in its rapid expansion. Mr. Whittle, who bought Esquire magazine in the 1970s and brought the controversial, commercial-sponsored Channel One into public schools in the 1980s, brushes off questions about Edison's long-term viability. Focusing on the short term, he says, "by order of magnitude, this is going to be our best financial year." Edison has forecast earnings before interest, taxes, depreciation and amortization of at least $20 million in its current fiscal year.