Samuel Abrams is the leading national authority on the history of Chris Whittle and the Edison Project. His book Education and the Commercial Mindset recounts the story of the Edison Project, its highs, its lows, its shape shifting.
Abrams was a teacher in a public high school in Manhattan until he earned his doctorate. Now he is director of the National Center for the Study of Privatization at Teachers College, Columbia University.
In this post, he updates the status of Edison.
EdisonLearning Terminated in Chicago
EdisonLearning, the for-profit school management company, is a shrinking shadow of its once prominent self. Launched with much fanfare in 1991 as the Edison Project and taken public as a Wall Street darling by Merrill Lynch in 1999 as Edison Schools, the company changed its name a second time to EdisonLearning in 2008. At its height, the company in 2003 managed 133 schools enrolling 80,000 students in cities across the country. The company is now down to running two credit-recovery centers in Ohio and six alternative schools in Florida.
The latest bad news for the company, reported Chalkbeat in September, came in Chicago. After five years of running four credit-recovery centers in the Windy City, the company saw its contract terminated. School district officials concluded that students at the company’s schools “weren’t receiving enough in-person instruction and that its online curriculum offered mostly low-level tasks.”
In addition to faulting EdisonLearning for inadequate instruction, district officials took EdisonLearning to task for charging its own schools significant fees to use the company’s software. One official on this account, according to Chalkbeat, derided the company as a “money factory.”
Such criticism dovetails with censure of the company by district officials as well as former employees in Ohio, as reported by ProPublica in 2015, for aggressive marketing and for overstating attendance to collect per-pupil funding from the state.
Transforming Edison into a profitable operation has been an unending enterprise, as documented in the book Education and the Commercial Mindset(2016). The company, as the Edison Project, was initially slated to run a national network of for-profit private schools. But that plan hinged on the introduction of vouchers. With Bill Clinton’s defeat of George H.W. Bush in 1992, vouchers stood no chance of becoming a national reality in the near future. The company accordingly transmuted into a subcontractor, selling its management services to municipalities as well as charter boards to run schools.
This new model led to substantial growth and much support on Wall Street. When Merrill Lynch took Edison Schools public in 1999, the company was valued at $900 million. But with growth came mounting losses. Upon reaching its peak with 133 schools in 2003, the company shifted gears to focus more on providing school districts with professional development, curriculum guidance, and computer software for assessing student progress. The company moved further in this direction in 2008 when it changed its name for a second time to EdisonLearning.
In 2013, the company was forced to split. Its owner, Liberty Partners, a private equity group based in New York that purchased the company in 2003 for $91 million, was winding down. In what amounted to a fire sale, Liberty managed to sell only EdisonLearning’s supplementary educational services division to Catapult Learning, based in Camden, NJ, for $18 million. The remainder of the company trudged on in managing 11 schools, four online academies, and 13 credit-recovery centers. As Chalkbeat reported, with the nullification of the contract in Chicago, EdisonLearning is now down to two credit-recovery centers and six alternative schools.
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And once EdisonLearning has no schools, the frauds and cons [all corrupt narcisists, I’m sure] behind it will probably reinvent themselves, get another fancy, misleading name, and pretend they are taking another path toward a free-market, get-rich scheme following another toxic path intended to destroy public education.
Larry Cuban has a wonderful post about Chris Whittle’s Channel One programming for schools and how long it lasted. According to Cuban, in “Whatever Happened to Channel One?”
“Channel One died at the end of the 2018 school year. After 29 years as a “free” televised news program that included commercials, it closed its doors.”
In other words the Channel one operation lasted longer than Whitle’s Edisonschools,.. Edison Learning operations. Advertisers loved having a captive audience and schools were eager to have the equipment and a small dose of current events.
I actually have a correction and some explanation, even though Samuel Abrams is the recognized expert. I and a late friend ran a volunteer research and information project on Edison Schools (www.pasasf.org) from about 2001-03, after Edison’s lone San Francisco charter became a national and even international news story (rather inexplicably, Edison chose to make it one and the press obediently complied).
Edison never actually ran anywhere near 133 schools — it CLAIMED to, but if you hand-counted the schools listed on its website at the time, as I did (regularly), the number was in the 60s. The number probably peaked (again, nowhere near 133) in early 2001 and by 2003 had definitely dwindled, as Edison rapidly started losing clients.
Lying was a basic part of Edison’s PR strategy.
The reason Edison was a big business story was that its shares were publicly traded on the NASDAQ for several years. The idea was that Edison would apply the efficiencies of the private sector to running schools, thus generating enough extra money to pay dividends to shareholders. We critics said there’s no such thing as extra money when you’re addressing the needs of low-income children, and were we ever slammed and derided for that.
As noted, Edison ran one charter school in San Francisco, a high-poverty school it had been handed by later-disgraced superintendent Waldemar “Bill” Rojas and a compliant, rubber-stamping school board. The composition of the SF school board changed at the beginning of 2001, and the new board took a hard look at the Edison school (called Edison Charter Academy, ECA) and started moving to investigate canceling the contract. Edison Inc. decided to make this a bloody legal and media battle. Its strategy included sending out fake test scores for ECA. For a few months, the press was compliant and favorable to Edison. Gradually the tone of the coverage shifted.
Meanwhile, Edison was trying to take over many schools in NYC but only won a few (3, I think) — and it was trying to take over the entire Philadephia school district but wound up getting 20 schools.
Edison’s stock was at $38 per share at the time of its highest hype, around March 2001. Within a few months, the stock price fell to14 cents (not a typo) per share. Edison made a profit for its easily duped shareholders in only one quarter that it was publicly traded. At some point I think in late 2001 or ’02, Edison was taken private — the owners bought back all the stock from the shareholders, so it was no longer traded on the NASDAQ. Then it shifted its business from taking over schools to providing supplemental services, as described. Outcome of Edison’s San Francisco school on the next comment…
So, in spring 2001 the San Francisco school board was in a messy, bloody legal and media battle with Edison Schools over Edison Charter Academy (ECA). As the luster began to wear off Edison Schools, the press gushing lessened and the stock price plunged, the battle wound up in a compromise, I believe in June 2001: Edison Charter Academy would become a state-run charter school, not district-run, and merely a rent-paying tenant in a district property. ECA was quite a drain on district resources in many ways, so that problem was eased.
It fell rapidly out of the news. Fast forward a totally unknown time, and apparently ECA’s internal board, staff and principal engineered an uprising, viewing it as throwing off the yoke of the corporate oppressor. Because there’s absolutely zero news coverage — after the bright spotlight and massive coverage during the period of hype — and I didn’t know people in the Edison community at that time, I don’t know the timeline or details. Somewhere along the way, Edison Schools Inc. left the building and the school, renamed Thomas Edison Charter Academy, became an independent charter, and came back into the fold of SFUSD. So that’s where it is now, a fairly low-key independent charter under the auspices of the school district. (It happened that the school Edison Inc. took over had already been named Thomas Edison Elementary — the name is still in permanent letters on the vintage building.)
Parents at the charter now put out the word in the community to recruit new families, and they always urge them to ignore what they find if they Google.
I’m resisting the temptation to go into detail about the massive, gushing national and international news coverage — not just of Edison Inc. but of the San Francisco school — but I’ll note Page 1 in the NY Times; a 60 Minutes piece; the NY Times story picked up in the then-powerhouse International Herald Tribune; the Washington Post; USA Today; on and on and on and on. But in June 2001, then-powerhouse Newsweek did a skeptical and thoroughly reported story (by then-Bay Area stringer Nadine Joseph) that addressed ECA’s pushing out special-ed children, and that took a lot of the luster off.
Sort of interestingly, the principal of ECA during the period of massive hype was Vincent Matthews, who quietly moved out of the charter sector and into public district administration, building himself a resume in various Bay Area districts outside San Francisco — and he’s now the superintendent of the San Francisco Unified School District.
Just one piece on the gushing news coverage of Edison Schools, as I’ve posted here before. The New York Times did a Page 1 story on the San Francisco controversy, reported by Edward Wyatt or Ed Wyatt (in case he has his name on Google alert). It was avidly pro-Edison and disdained the critics, including me and my friend Dana Woldow, both parents volunteering our time as advocates. (Dana’s husband knew how to create and update a newfangled website, so we had one on Edison, Parents Advocating School Accountability, http://www.pasasf.org, which no longer exists.)
Wyatt quoted Chris Whittle as saying San Francisco was the only Edison client that wanted to get rid of it. That was a lie. One district, Sherman, Texas, had already kicked Edison out, and a number were moving to do the same, including Boston; Dallas; Lansing, Mich.; and a district in North Carolina — and many more did later. The Times was alerted to the falsehood but never corrected it.
Someone just researched Wyatt, and surprise — he has left journalism and now works for education “reformers.”
Superb, Caroline. Yes.
“[T]here’s no such thing as extra money when you’re addressing the needs of low-income children.” Spot on.
My very favorite part of the blog is the expertise of its readers. Diane has the most interesting guests in her living room.
Carolie, you perfectly made the case for way schools ought not to be run like businesses. Most businesses fail.
Businesses open and close. Where is Eastern Airlines? Remember Braniff? TWA? Pier 1?
Schools should be stable and dependable community fixtures.
Caroline, I only just came across this post and your reply. So, please pardon my delay in responding. Edison never claimed 133 schools as its peak number. It claimed 149. The determination of 133 was mine after 1) examining all of Edison’s contracts at Edison’s headquarters and 2) comparing my tally with that reported by Brian Gill et al. in “Inspiration, Perspiration, and Time” (RAND, 2005). Please see Table 6.1 in “Education and the Commercial Mindset” (2016, p. 124). As for New York City, Edison did not win contracts for 3 schools. To the contrary, it failed to win any contracts in New York City, outside of taking over a contract for a charter school in the Bronx previously managed by LearnNow, an EMO that Edison acquired for $36 million in stock in July 2001. I cover Edison’s battle in New York City in some detail in “Education and the Commercial Mindset.” Please see pp. 105-109. In a nutshell, parents of students at 5 persistently under-performing district schools were given the opportunity in March 2001 to vote for a switch to charter status. If more than 50 percent of parents at any of the schools voted for such a conversion, the school would have been granted charter status and turned over to Edison. As I wrote in “Education and the Commercial Mindset,” “Of 5,000 ballots, only 2,286 were cast. And of those cast, only 453 were for Edison. Not one school came close to the plurality necessary for conversion to charter status” (p. 107). Please be in touch, Caroline, if you have any questions. I may be reached at sa307@tc.columbia.edu.
Edison did claim for a long time that it ran 133 schools — I hadn’t seen the 149 lie! Some links showing 133 below. That number is pretty burned into my brain because I hand-counted the number on their website regularly in 2001 and 2002, consistently finding far fewer than 133. They did a shenanigan where they claimed a K-5 school as one, a 6-8 school as one and a 9-12 school as one, and they ran some schools with weird grade levels, like 5-9, and counted a school like that as three. That might be reflected in their contracts. I’m pretty sure that fake counting method didn’t flluy account for the 133 lie, though. RAND (WHICH WAS PAID BY EDISON — caps deliberate) fell for some BS too or maybe just, being paid by Edison, chose not to ask too many tough questions. Our institutions aren’t set up to cope with being lied to brazenly!
https://corpwatch.org/article/edisons-failing-grade
https://www.washingtonpost.com/magazine/2019/10/23/can-controversial-entrepreneur-chris-whittle-create-new-model-private-schools/?arc404=true
Well, this one says “approximately 130”:
https://www.sec.gov/news/press/2002-67.htm
Carole, the tally of 133 schools reported by Jim Rendon in his article for The Washington Post Magazine comes from my book. Rendon interviewed me for that article after reading my book and used my book for much of his data. For 2003-04, Edison reported running 149 schools when it was, in fact, running 133; for 2002-03, the numbers were 136 and 114, respectively; for 2001-02, the numbers were 113 and 88, respectively. As for RAND, yes, the organization was paid by Edison for its analysis. But as I wrote, I checked the company’s contracts against RAND’s tally. Wherever Edison counted two schools with the same address–such as a K-5 and a 6-8 in the same building–I merged the schools, as did RAND. This matter aside, the more significant issue of misrepresentation, as I also documented in Table 6.1 (p. 124), concerns revenue. By order of the SEC in 2002, Edison was forced to revise its revenue reportage. Accordingly, revenue in 2001, for example, was $221 million, not $351 million; in 2002, $286 million, not $465 million; and in 2003, $282 million, not $426 million. Ultimately, this problem of revenue recognition sunk the company. Growth was nowhere close to what the company was reporting, and investors thus fled.
Well agree to disagree about that number of schools, because as I say I hand-counted regularly on the website in real time, at that time. There were never more than 70 listed on the website. Not sure what shenanigans they used to supposedly give bulletproof info that they ran more, but that was a lie.
As you show, Edison’s claims about the revenue were lies, and so were (to a wild degree) their claims about achievement — pretty much everything out of their mouths was a brazen lie.
I was also shocked at Merrill Lynch. They put out analysts’ reports on the industries and companies in which they handle stock trades. A friend was getting the analyst report on Edison at that time. The analyst report contained outrageous lies about the schools’ achievement, the number of schools, Edison’s prospects for things like taking over the Philly and NYC school districts and more. I was following them in real time and the reports contained lie after lie after lie. Merrill Lynch was busted for doing this for other industries.
Their analyst putting out the lie-filled reports appears to have never been troubled by any law enforcement or other oversight. I Googled her and she retired from ML in 2007, and had later become a newspaper industry analyst — ironic considering how many of her lies were fed to trusting, gullible reporters when when she was reporting on Edison.
(My friend whose family was getting the ML reports full of lies about Edison switched their business (they’re wealthy) out of ML.)
I got pretty deep into the weeds there!