Wireless Generation is Murdoch's Education Corp. Note the location of their next planning session on opportunities and risks in our latest edu-reform:
http://us2.campaign-archive.com/?u=cfb5b3dae0d0b7da2e949d8d1&id=078f7efb22&e=2e4c6c94e1
A snippet from the flier:
"Last year, a group of about a dozen education reformers, entrepreneurs and investors met in snowy Sun Valley for a series of discussions on the progress of education reform and the opportunities and risks associated with private sector investment in the space. The result was three days of creative thinking and camaraderie, collaboration and planning. And of course, skiing."Well, of course there was skiing. It's for the kids...
Wait a minute: Wireless Generation - the company that screwed up NJ's Race To The Top application - is owned by Rupert Murdoch? Of Fox News?
The same Rupert Murdoch who hired ex-NYC Schools Chancellor Joel Klein to run his new education division?
The same Joel Klein who is Acting NJ Education Commissioner Chris Cerf's former boss?
Yep:
OK, I think I got it. Except... where are the teachers?
The same Rupert Murdoch who hired ex-NYC Schools Chancellor Joel Klein to run his new education division?
The same Joel Klein who is Acting NJ Education Commissioner Chris Cerf's former boss?
Yep:
Whoa, whoa, whoa, WHOA! I can't keep this straight any more! How about we diagram it?
Rupert Murdoch's News Corp. (NWS) just purchased Wireless Generation for $360 million. Technically it's $360 million for 90% of the company, but either way it's a lot of money.When a company in your general space gets bought for a huge amount by an unnatural acquirer, it merits some attention. But before I go on, I want to congratulate the Wireless Generation team on the acquisition. Good for all of you!As Audrey notes, this is on the heels of News Corp appointing NYC Schools Chancellor Joel Klein. So with that hire, and the WG acquisition, it looks like News Corp is getting into education technology in a big way. [emphasis mine]
OK, I think I got it. Except... where are the teachers?
I don't know nuthin' 'bout no fancy stock deals, but there are some who can't figure out why Murdoch bought Wireless Generation:
Oh, my naive little friend; do you really think Rupert Murdoch is looking at the medium-term profits of a company that will provide consulting for school districts?
This is not about winning the game; it's about changing the game. We are on the cusp of the most significant transformation of American society since Ike warned us of the military-industrial complex.
The privatization of the American military continues apace and will be completed very soon. A select privileged few have become very, very rich on the selling out of our national security. Smacking their chops, our corporate titans are looking for the next piece of our society to devour. And education is looking mighty, mighty tasty.
So Fox News, NBC, and the rest of the corporate media are ginning up a phony crisis in education. Billionaires have installed phony experts who have convinced bought-and-paid-for politicians that the only solution to the low academic achievement of the children of the permanent American underclass is to privatize the entire system.
Now, using a fiscal crisis created by those very same corrupt overlords as an excuse, they are transforming the greatest education system in the world into a tawdry bazaar, where dubious "solutions" are sold to the public using gobs of money that should be flowing into classrooms.
Make no mistake: the breaking of the public sector unions is not primarily about keeping taxes low on the wealthy (although, again, that's a nice bonus). No, public unions must be destroyed because they are the last bulwark against the corporate takeover of the very civic institutions that guarantee our freedoms.
When the last high school is turned over to Halliburton, the public will have given over a vast amount of our economy to a select few aristocrats who have absolutely no interest in a well-educated populace capable of critical thought. And they won't stop at schools. Law enforcement and public safety is sure to be on the agenda.
I know - I'm crazy. There's just no way this could happen. There's no way the public will stand for privatizing an entire sector of the economy when every other nation has significantly involved the government and kept costs far lower.
The schools will be fine; you'll see. Everything is going to be just fine...
Look at my diagram above if you want an answer. Wireless Generation doesn't have to really produce anything; its value is in its connections.
But so much of the above just doesn't make sense. Here's why:
- A high revenue multiple for a business with tough sales cycles: As of this summer, Wireless Generation was on a $60 million revenue run rate. Given that the News Corp purchase essentially values the company around $400 million, that means News Corp bought the company at a +6.5x revenue multiple. That's crazy. Just one more point of context, Wireless Generation has been around roughly 10 years.
- Where are the profits? Wireless Generation isn't a wildly profitable company. In 2007, the last year I have detailed financial data on them, they were not profitable and they had about 250 employees. Now they are up to about 400 folks, and perhaps they might be investing in people ahead of growth, but even then I'm not sure that a wildly profitable business will ever be there.
- Was anyone else at the altar? I had to get on the phone and chat with a private equity guy about this. He agrees with my arguments in this post, and was actually at one of the shops that looked at their business at one point. Let's just say he choked when he saw the purchase price.
- No unique advantages for News Corp: when an acquirer is looking to make a deal of this size, usually they enjoy some unique advantage. For example, if you are Google and you purchase DoubleClick or YouTube, it fits in very nicely with your core business model. News Corp is a media company. That's film, cable programming, TV, satellite broadcasting, newspapers, magazines, and a small publishing business. Actually, if you dig into their annual reports, education or anything related to education is not one of their core eight operating segments. So where does Wireless Generation fit within their core competencies?
I'm very happy for the Wireless Generation team — they pulled a rabbit out of their hat and were a ~10 year overnight success. They sold a non-attractive business at a high revenue multiple. But they just got bought by a company, News Corp, that likely has no clue what to do with them. And just because News Corp has Joel Klein now, it doesn't mean they will know how to manage this kind of business, let alone figure out a way to justify the purchase price.It's going to be a tough road ahead for the new Wireless Generation entity.
Oh, my naive little friend; do you really think Rupert Murdoch is looking at the medium-term profits of a company that will provide consulting for school districts?
This is not about winning the game; it's about changing the game. We are on the cusp of the most significant transformation of American society since Ike warned us of the military-industrial complex.
The privatization of the American military continues apace and will be completed very soon. A select privileged few have become very, very rich on the selling out of our national security. Smacking their chops, our corporate titans are looking for the next piece of our society to devour. And education is looking mighty, mighty tasty.
So Fox News, NBC, and the rest of the corporate media are ginning up a phony crisis in education. Billionaires have installed phony experts who have convinced bought-and-paid-for politicians that the only solution to the low academic achievement of the children of the permanent American underclass is to privatize the entire system.
Now, using a fiscal crisis created by those very same corrupt overlords as an excuse, they are transforming the greatest education system in the world into a tawdry bazaar, where dubious "solutions" are sold to the public using gobs of money that should be flowing into classrooms.
Make no mistake: the breaking of the public sector unions is not primarily about keeping taxes low on the wealthy (although, again, that's a nice bonus). No, public unions must be destroyed because they are the last bulwark against the corporate takeover of the very civic institutions that guarantee our freedoms.
When the last high school is turned over to Halliburton, the public will have given over a vast amount of our economy to a select few aristocrats who have absolutely no interest in a well-educated populace capable of critical thought. And they won't stop at schools. Law enforcement and public safety is sure to be on the agenda.
I know - I'm crazy. There's just no way this could happen. There's no way the public will stand for privatizing an entire sector of the economy when every other nation has significantly involved the government and kept costs far lower.
The schools will be fine; you'll see. Everything is going to be just fine...
5 comments:
They say they are doing it for the good of the country, and the sheep just follow. If American workers didn't have to work so much to make the amount of money their grandparents made (adjusted), they could actually look into what's going on. But of course that's what the CEOs want, a tired, poor electorate that they can control. The Forefathers are turning over in their graves. Bring back the real republicanism of Jefferson's government for the people and of the people, Lincoln's equality for all people, and Roosevelt's Square Deal.
Amen.
Very well put, once WE THE PEOPLE allow the undermining of our school systems to be corrupted by corporate money, we will lose whatever hope WE THE PEOPLE have left for future generations. One of the reasons WE THE PEOPLE pay taxes IS PUBLIC EDUCATION. Now the government wants to privatize education, does that mean WE THE PEOPLE no longer have to pay school taxes ??? I doubt it >>>
Please get this information out to as many news sources as you can. I had a feeling that this was all connected. Thanks for exposing this intolerable state of affairs. This is too alarming to keep out of the mainstream media. Thank you.
The money Quote: "Wireless Generation doesn't have to really produce anything; its value is in its connections."
Very nice diagram. And an amazing analysis of the A-team. I'm going to share it if you don't mind.
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