Whittling Down

To his admirers, media tycoon Christopher Whittle, 46, is a visionary marketing genius whose ideas for privatizing public schools could revolutionize education in the U.S. To his detractors, Chris Whittle is an all-hat, no-cattle huckster with more talent for raising funds than making money and one Big, Bad Idea: imposing ads upon captive audiences in classrooms and doctors' offices.

Yet even some of Whittle's fans have begun to worry that their beau ideal -- who has said "few people really know me" -- may be closer to the fast- talking Barnum portrayed by critics. Last week Whittle Communications L.P. announced the latest in a string of setbacks. The company will halt development of the Medical News Network, an interactive news service with infomercials for doctors that was scheduled for a nationwide launch in October.

Earlier this year Whittle pulled the plug on two other once promising ventures: Special Report Network, a series of videos and magazines that was aimed at patients waiting in doctors' offices, and a publishing division that produced advertiser-sponsored books. To raise cash, the company is negotiating the sale to Wall Street's Goldman, Sachs of half the equity in its profit- making Channel One, the advertiser-backed TV news program currently being shown in 12,000 U.S. public schools. Also for sale is Whittle's 50% interest in the $55 million, Ivy Leagueish corporate headquarters in Knoxville, Tennessee, which he built only three years ago.

Whittle first gained national attention in the early '80s as co-owner and rescuer of the financially ailing Esquire magazine. After selling out to partner Philip Moffitt, Whittle used the proceeds to expand a mini-empire of magazines aimed at such specialized audiences as teenage girls and travel agents. The profitability of these ventures, as well as Whittle's innovative plans for moving into electronic media, enticed outside investors, including Time Warner, which now owns 33% of Whittle Communications. From 1987 through 1992, the company's revenues rose from $82 million to $213 million. The growth was due largely to the success of the controversial TV service Channel One, which is offered free to schools if they show Whittle-produced news programs with ads aimed at children.

In the past three years, however, Whittle Communications has shut down 30 of its media titles; last year it recorded a 5.8% decline in sales, the company's first such drop. What went wrong? "We overcommitted ourselves, badly," Whittle told TIME last week. "In the '70s and '80s we became extremely proficient at large numbers of small launches. Then in the late '80s we decided to move to electronic and to concentrate on education and health. We thought launching big systems wasn't different from launching small ones. We were wrong." Bad timing was also a factor. The prospect of health-care reform and drug-industry mergers made it impossible to project ad revenues for the Medical News Network reliably.