Is Whittle still on track? By Andrew Jaff

The naysayers have been wrong before. When Ted Turner paid too much for MGM and had to mortgage Turner Broadcasting's future, they predicted his dream would spin out of co

But I’m joining the queue this time of media critics who believe Chris Whittle is indeed in danger of losing his way. He’s built a fine, new Georgian headquarters in Knoxville and many of his projects still remain intact. But more and more, it’s beginning to look like a shell. Or a shell game. Unlike Ted Turner, who has institutionalized the success of just about every venture he created-except, perhaps, the Goodwill Games–Whittle keeps flitting from start-up to start-up, and keeps raising the ante each time, without delivering on the full promise of any one project. As a result, Whittle Communications is in danger of becoming a visionary’s flawed dream that could trap many fine executives-and significant backers like Time Warner if Whittle can’t be persuaded to slow down and come up with a sensible business plan that doesn’t rely on tomorrow’s blue sky to succeed.
The latest, worrisome sign is the departure of Gerald Hogan, who last week announced he was resigning as vice chairman of Whittle Communications to join Libery Media where he’ll run its Home Shopping Network. That doesn’t sound like a glamor job for someone who was at one time one of several heirs apparent to Turner’s throne at TBS and who at Whittle was in charge of its in-school Channel One and oversaw partner and investor relations. But Hogan, who’s recognized as one of the brightest executives in TV today, will be joining a favored venture of John Malone, the Marvin Davis of cable television. (It is a long shot–but Malone is one of the backers of Barry Diller’s QVC network. Diller is considered a strong candidate to buy NBC, if it comes into play–so Hogan might be joining a team that has buying a network on its agenda.)
But back to Whittle. If you’re going to build castles in Knoxville or anywhere else, you need to be able to recruit and hold bright people like Hogan. More to the point, your castles have to be built on solid rock. Whittle’s already had to cut back his plans for the print side of Special Reports and there are reports of trouble at TV Special Reports. (One Whittle insider says SR was flagging, but in the last 60 days the company invested “a bundle” to shore up its sales force.) He never was able to build Channel One beyond its original mandate to provide a 12-minute news program–with two minutes of commercial time–to schools.
In Whittle’s defense, one of his top aides (Whittle has always been very accessible to the press and to this writer but was traveling as this column went to press Friday) notes that though Channel One “has not yet had the opportunity to expand into other kinds of programming” for students, it has reached its goal of broadcasting to seven million kids and is sold out in advertising through the end of this school year. As for Special Reports, though it’s not yet profitable, it is in 32,000 doctor’s offices–though agencies are still questioning its effectiveness for advertisers. Backer Spielvogel Bates went to the expense last year of commissioning its own study of place-based media. “Whittle and other vendors were claiming data based on traffic patterns rather than actual viewership,” says Craig Gugel, svp/executive director of media research and technology at BSB. “Their (claimed) audience levels were much greater than what we were able to document in the study.”
But, of course, all of these projects are dwarfed by Whittle’s latest venture–the Edison Project–a multi-billion-dollar effort to a build a thousand “high-tech” private schools, using $60 million in seed money to be provided by Whittle and his co-investors Philips Electronics, Associated Newspapers Holdings Ltd. and Time Warner. Recently, Reginald K. Brack Jr., chairman/ceo of Time Inc., said that in fact Time Warner would only be investing a “small percent” of the $20 million needed in the first year of the start-up, adding: “We have no plans to invest additional money. It’s off of our strategy.”
What it boils down to is that Whittle needs to explain to the world inside and outside his company what he’s going to stand for. Where is the core franchise here? Is it going to be the 2,001 Edison Project? Or his vaunted attempt to reach doctors and their patients with “interactive packages” that demonstrate the viability of advertising-supported placed-based media? Or is it his school television project which was meant to raise significantly the awareness levels and test scores of American teenagers to enable them to compete in a rapidly changing world? Whittle’s ambition is awesome. But to my reckoning he needs a big score–and in this decade, not the next one.
Copyright Adweek L.P. (1993)