WHITTLE SUFFERS NEW WOES AS NEA TARGETS SPONSORS

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Whittle Communications is proving an apt name.

A series of high profile media venture flops has pared the company to essentially one core business, "Channel One," and even that may be chipped away at soon.

Last week, the National Education Association unveiled a plan that's sure to get a rise out of "Channel One" advertisers.

The NEA is organizing the nation's state and local teacher pension funds to withdraw more than $1.5 billion in investments from companies sponsoring the ad-supported in-school TV programming venture.

Targeted sponsors include McDonald's Corp., PepsiCo, Procter & Gamble Co. and Reebok International, as well as Whittle partner Time Warner.

The pension funds are estimated to hold more than $800 million in P&G stock, according to an analysis by Unplug, a non-profit organization that has been assisting teachers and school administrators in local battles against the commercialization of public education.

The pension funds also hold a $525 million stake in McDonald's, $325 million in PepsiCo, $176 million in Time Warner and more than $38 million in Reebok. A Reebok spokesman said the company plans to continue its relationship with Whittle. The other marketers couldn't be reached.

Besides sponsoring "Channel One," Reebok will team with Whittle this fall to create an equally controversial educational programming effort dubbed PETV that will use "Channel One" to distribute programming featuring Reebok athletic endorsers on health, diet and physical fitness.

If the NEA effort achieves its goal, it could be a critical blow for Whittle. "Channel One" is believed to be the only money-making enterprise left at the company, which is said to be incurring mounting debt from money-draining projects such as Medical News Network and the now-defunct Special Reports.

In an effort to control costs, Whittle has reduced its staff to about 500 employees from about 1,000 in the past year, with many high-profile executives among those leaving.

Meanwhile, Whittle insiders said the big, untold story is that the company is no longer controlled by founder and Chairman Chris Whittle but by President-CEO Donald Johnstone, a former executive at N.V. Philips. The appointment was seen as an effort by Philips to protect its investment, which now stands at about 33% of Whittle.

Jeff Jensen contributed to this story.

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