Budget & Finance

‘Free Market’ in Pa. District Wanes As Edison Buys Rival Company

By Robert C. Johnston — June 13, 2001 3 min read

With three different companies running its 10 schools, the Chester-Upland district was supposed to be Pennsylvania’s one-of-a-kind laboratory for free-market competition in education.

But with the surprise merger of two of those companies last week, it’s unclear where that vision stands.

Edison Schools Inc., the nation’s largest for-profit operator of public schools, announced June 4 that it had acquired LearnNow, a relatively new school management firm with a niche in urban schools, for about $34 million in Edison shares.

In March, the three-member state control board that runs the long-troubled Chester-Upland schools divided responsibility for running nine of the schools between Edison and LearnNow, while turning over an elementary school to Mosaica Education Inc. All three companies are based in New York City. (“In Pa., District Tries 3-Way Contest To Fix Schools,” April 4, 2001.)

In rejecting Edison’s bid to run all the schools, the control board said it wanted competition, not a monopoly, in the 7,000-student district. The merger, however, gives Edison control over nine of the district’s 10 schools.

Thomas E. Persing, the president of the control board, said last week that the merger was a surprise and a disappointment. But the board will ensure that Edison and LearnNow offer competing programs, he added.

“We’ll keep them to their word,” said Mr. Persing, who is the superintendent of the nearby 3,300-student North Dublin schools. “Even though there’s an acquisition, they will run two programs.”

In a conference call last week with analysts and investors, Christopher Whittle, the president and chief executive officer of Edison, pledged there would be distinct Edison and LearnNow schools.

“We’ll be operating both types of schools. That’s what Chester wants, and both companies have assured them that we plan to deliver exactly on the promise we made,” he said. “We’ll be competitive there in many ways, like multiple brands in many organizations are.”

Opportunity for Options

The merger also leaves Edison, which runs 113 public schools in 21 states, in a better position down the road to offer multiple options to school districts, Mr. Whittle said.

LearnNow, which expects to manage 11 schools in four states this coming fall, brought a strong management team, as well as an aggressive growth outlook to the deal, he added.

LearnNow has a reputation for gaining community involvement in its schools. To get local leaders to back its plan to run schools in Chester-Upland, for example, the company recruited popular former teachers and administrators who had left the community to return to work in the schools in the fall. The district is about 20 miles south of Philadelphia.

“There are those in the community who are not crazy about this, but are willing to wait and see,” Eugene V. Wade Jr., LearnNow’s chairman and chief executive officer, said of the merger with Edison. Under the deal, he will become an Edison vice president. “If we deliver a good education to their children, then no one’s going to care.”

The deal also should help LearnNow lower the costs of running schools in Chester because it can share purchasing and other administrative expenses with its new parent company, he added. Edison will lend LearnNow up to $4 million for operations before the deal’s closing, which is expected by July 1.

Michael J. Connelly, the president and CEO of Mosaica, said that the move was a good business decision for both companies, though he acknowledged that it will raise community concerns.

At the same time, he said, the deal makes Mosaica—which runs 20 schools in five states—the most independent operator of the three management companies in Chester-Upland. “Hopefully, we’ll be the nimble, entrepreneurial school,” Mr. Connelly said, “and create options for parents.”

A version of this article appeared in the June 13, 2001 edition of Education Week as ‘Free Market’ in Pa. District Wanes As Edison Buys Rival Company

Events

This content is provided by our sponsor. It is not written by and does not necessarily reflect the views of Education Week's editorial staff.
Sponsor
Student Well-Being Webinar
A Safe Return to Schools is Possible with Testing
We are edging closer to a nationwide return to in-person learning in the fall. However, vaccinations alone will not get us through this. Young children not being able to vaccinate, the spread of new and
Content provided by BD
This content is provided by our sponsor. It is not written by and does not necessarily reflect the views of Education Week's editorial staff.
Sponsor
Teaching Webinar
Meeting the Moment: Accelerating Equitable Recovery and Transformative Change
Educators are deciding how best to re-establish routines such as everyday attendance, rebuild the relationships for resilient school communities, and center teaching and learning to consciously prioritize protecting the health and overall well-being of students
Content provided by Campaign for Grade-Level Reading
This content is provided by our sponsor. It is not written by and does not necessarily reflect the views of Education Week's editorial staff.
Sponsor
Reading & Literacy Webinar
Addressing Learning Loss: What Schools Need to Accelerate Reading Instruction in K-3
When K-3 students return to classrooms this fall, there will be huge gaps in foundational reading skills. Does your school or district need a plan to address learning loss and accelerate student growth? In this
Content provided by PDX Reading

EdWeek Top School Jobs

Teacher Jobs
Search over ten thousand teaching jobs nationwide — elementary, middle, high school and more.
View Jobs
Principal Jobs
Find hundreds of jobs for principals, assistant principals, and other school leadership roles.
View Jobs
Administrator Jobs
Over a thousand district-level jobs: superintendents, directors, more.
View Jobs
Support Staff Jobs
Search thousands of jobs, from paraprofessionals to counselors and more.
View Jobs

Read Next

Budget & Finance How Kids Benefit When Principals Get a Say in Spending Federal COVID-19 Aid
In some districts, principals play a key role in targeting federal pandemic relief money, but in other places they're left out.
8 min read
Nicole Moore, the principal at Indian Mills School, stands near the summer literacy program held in a small lot at Fawn Lake Village in Shamong, New Jersey on July 6, 2021. Moore worked with teachers to develop a summer literacy program for disadvantaged students who live in the district.
Nicole Moore, principal of Indian Mills School, in Shamong, N.J., worked with a teacher and the district superintendent to start a summer program using federal aid for COVID-19 relief.
Eric Sucar for Education Week
Budget & Finance Some School Districts Are Feeling COVID-19 Stimulus Envy
Thousands of districts got little to nothing from recent federal stimulus aid, surfacing longstanding tensions over inadequate school funding.
11 min read
An old swing-set on a playground at Heritage Elementary School in Lewis Center, OH on July 7, 2021. New construction and repairs will be paid for by a school levy since the district didn’t qualify for pandemic relief funding.
The Zionsville school district in Indiana is one of roughly 1,000 in the U.S. that received no money from the second and third rounds of federal stimulus aid during the COVID-19 pandemic.
Maddie McGarvey for Education Week
Budget & Finance Quiz Quiz: How Much Do You Know About Education Funding?
Quiz Yourself: How much do you know about what's going on with education funding?
Budget & Finance School Buildings Are Crumbling. Here's Why It's So Hard to Fix Them
As the pandemic comes to an end and districts prepare to fully reopen schools, they face new construction costs and deadline pressures.
10 min read
Image of an excavator in front of a school building.
iStock/Getty