"I like Pepsi products more than Coke," Phana says after polishing off her Mountain Dew. The sophomore laughs. "Duh, maybe because I've been drinking it exclusively for the last two years." You've heard of "Camel Clubs"--bars that take kickbacks for selling only Camel cigarettes and displaying Camel paraphernalia ("Camel Clubbed," WW, April 16, 1997). Well, welcome to Pepsi High. Benson High School has an exclusive contract with Pepsi--or, more accurately, Pepsi has an exclusive right to sell and advertise to a captive market of 1,500 Portland teens. In exchange, Benson gets an estimated $42,000 in commission over the next three years and saves thousands of dollars on Pepsi school supplies like daily planners. Coke and Pepsi machines have been hanging out in school halls for decades. Usually, however, schools don't do direct business with Coke or Pepsi. They work with companies like AAA Vending Specialists or Fast Break that don't require additional advertising or exclusive deals with one of the cola companies. In exchange, schools keep a small share of the pop proceeds. Two years ago, Benson, Jefferson and Franklin upped the ante, signing exclusive contracts with Pepsi in exchange for greater compensation. Now the school board thinks there's even more money to be made. On March 9, at the last school board meeting, members began considering a policy change that would allow the schools to pursue broader advertising contracts--including districtwide deals that would brand the entire Portland school system either Coke or Pepsi. Board members like Donna Jordan say they have noticed a national trend in which beleaguered school districts are landing lucrative deals with national advertisers. Such a contract could net Portland Public Schools nearly $2 million annually from one of the two cola giants. And there's more than just pop money out there. Other deep-pocketed national brands, like Procter & Gamble, Arby's and Nike, are cracking open their checkbooks and lining up to attend class these days. Corporate contracts are more lucrative than bake sales, but they also raise serious questions about the meaning of public education. The deals come with strings attached, including requirements that limit the products the school and school clubs can sell while dictating that corporate logos are stamped on everything from notebooks to basketball scoreboards. School board member Joseph Tam is appalled at the idea. "I'm not interested in prostituting the children in our school district to a private company," Tam says. "When you take money from a private source, they always get something in return. In this case they want to bombard students with their message so the kids will purchase their products." At a time when taxpayers and lawmakers aren't willing to adequately fund public schools, Tam's soap-box speech is falling on deaf ears. He is the only school board member opposing the troubling idea of turning to advertisers to patch up public schools. The reason is obvious. In the last 10 years, per-pupil funding has been slashed. It's reached the point that veteran Benson High physics teacher Della Scheibold says she'd welcome corporate funding, even in the classroom. "If they bought me some physics equipment, they could put their logo right on it," she says. School board member Marc Abrams supports the idea of going after advertising dollars, but acknowledges that corporate logos may jar the educational setting. The official position of Portland Public Schools as stated in the PPS policies and regulations book is to "protect students and staff from commercial intrusion." In the quest for dollars, however, the Portland School Board is considering changing that policy. In a Jan. 26 memo from the board's finance committee to the board and acting superintendent Diana Snowden, finance chairwoman Jordan asks, "Should the district policy regarding advertising be changed to allow specific and limited advertising to occur on school property, which could generate new revenue for the general fund?" The question was raised again on March 9, at the most recent school board meeting. And last week, Michael Hutchens--director of purchasing for PPS--sent a letter to Portland's deputy superintendent Merle Bradford asking for "clarification" on the PPS advertising policy. "Once the decision has been made," says Hutchens, "I can act very quickly on getting a district contract." The board's discussion on advertising is preliminary--it has assigned an administrative task force to look into the option--and no one knows exactly what a districtwide exclusive contract would look like. But a review of the exclusive agreements already in place in selected Portland public high schools offers a taste of what could be in store. Although administrators at Jefferson, Benson and Franklin refused to talk about their contracts, Franklin provided a copy of its Pepsi agreement to Willamette Week. The contract, signed by Franklin Principal Nathan Jones, is worth roughly $100,000 over 10 years. According to the agreement, Pepsi will contribute $17,000 for the construction of a press box for the baseball field and $3,000 to upgrade electrical service for the placement of additional vending machines. Pepsi also pledged to provide $2,000 a year in "support funds" and 40 cents for every case of Pepsi sold (about $2,200 a year). The school can spend the 40-cent commission and the support funds any way it decides to, says PPS spokesman Lew Frederick. Pepsi also provides Franklin with $4,000 per year to help purchase daily homework planners for the students and teachers. "The Pepsi logo will be placed on the back page of the handbook," the contract states. Finally, the agreement stipulates, "All vending concessions and over-the-counter sales of drinks...will be only those brands provided by Pepsi-Cola. All clubs and organizations associated with Franklin High School, with the exception of food service, must also sell only those brands distributed by Pepsi-Cola." A captive audience of high schoolers may seem like a coup for Pepsi, but Pepsi spokesman Jeff Brown sayshis company doesn't make any money on the deals themselves. "We don't sell enough pop in the schools," Brown says. The real goal is to create brand loyalty. "We hope that when the kid grows up and is out of school, they'll remember Pepsi when they're in the store," he says. The fight for brand loyalty is so important, in fact, that the cola wars have opened a new front in public schools all across the country. The front page of TheNew York Times on March 10 highlighted the trend, reporting on some recent high-dollar contracts nationwide. The Madison Metropolitan School District in Wisconsin recently signed a $1.5 million contract with Coke; the Mason City School District in Ohio signed a $1.1 million contract with Pepsi; and the Hurst School District in Texas signed a $1.95 million contract with Pepsi. Coke and Pepsi aren't the only companies trying to cut through the ad clutter. According to Business Week, kids are hit with 400 ads a day. The logical marketing strategy--going to school--has become a defining feature of the late '90s. "There's only a certain number of places where kids are," says Ira Mayer, publisher of Youth Markets Alert, a New York-based subscriber-only newsletter targeted at Fortune 500 companies who want to get advice on marketing to youth. "They watch TV. They listen to the radio. They go to the mall and movies. And they're in schools for at least five hours a day, five days a week. Our newsletter has advised that to break through the clutter, you have to be in the schools." And they are. Gone are the days when the only commercials in classrooms were seen on Channel One ("I Was a Teen-age Channeler," page 28). School officials now hand out Dole food coupons in company-sponsored nutrition programs nationwide. Some 31,000 schools provide "Just Do It" textbook covers. Four million elementary-school kids across the country look at lunch board menus featuring characters from the animated film Anastasia. In Georgia, electronic ads zap across pay phones in public schools. A school cafeteria in St. Paul, Minn., features piped-in radio programs, complete with commercials. Perhaps the most outrageous examples of hucksterism in public schools are found in Colorado, where several different deals have left Mountain Dew, Cub Foods and Norwest Bank ads plastered above rows of lockers. Burger King and Sprite ads are emblazoned on yellow school buses. Meanwhile, the Pepsi logo beams proudly on football scoreboards all across one 53-school district, and Dr. Pepper logos have been painted across the rooftops of public high schools in another. Early last month, the Colorado-based marketing company responsible for orchestrating these deals showed up in Oregon to drum up some business in Salem, Eugene and suburban Portland. DD Marketing Inc. pioneered the trend of signing up entire school districts two years ago, acting as a middleman between school districts and the soft-drink companies and taking up to 25 percent commission. Mark Sims, DD's West Coast account executive for the "corporate partnership" program, doesn't skip a beat when confronted with the criticism that his company is making money off kids in the crassest of ways--turning students into a profitable demographic by selling them off to soda companies. "First of all," Sims says, "the companies are already in the schools. It's already a big market. All we're doing is saying the pop companies need to be paying more. The soft drink companies have been making gobs of money, and we think it's time for the schools to be making some." Sims' boss, DD marketing vice president Mike Roumph, goes as far as to spin his company as a white knight galloping to the rescue of financially parched schools. "Every school district in the country, just like Portland, is having funding problems. We're in the business of raising money for schools. We're maximizing the marketplace leverage of the students." "We thought Oregon would be prime for this," Sims said about his March 4 trip to Oregon, "because of all the school funding issues here." Sims says his proposal met with a lot of enthusiasm, and he's coming back to Oregon this month to follow up. He's likely to get a warm reception. "I was very impressed," says Rick Larson, business and operations director for Centennial School District."He laid out a whole process where they would write a request for a proposal for us to get a large national advertising contract. I was intrigued because they offer management and experience that we just don't have." Sims failed to get an audience in Portland, but not for lack of trying. "He was pressing me very hard for a meeting," PPS purchasing director Hutchens says. "He told me that he could get me the best deal." Hutchens held off, saying he's confused about PPS' policy on advertising. Hutchens, who has been purchasing director since the early '80s, says he felt compelled to dash off a letter to PPS deputy superintendent Bradford last week asking for clarification on the policy toward vending contracts. "What prompted me to write the letter is all this outside pressure from DD Marketing," Hutchens says. "DD pressure brought this to the forefront because there is no policy on vending contracts, and I felt we needed some clarification." Hutchens is also frustrated with the position PPS has been forced into by the budget crunch, and he's decidedly cynical about companies like Coke and Pepsi. "Advertising in schools is becoming pervasive," he says. "They're getting a captive audience and building a client base. I have a problem giving companies exclusive right to that kind of access to our kids. It's not our job to promote these companies." But Hutchens, who has two kids in the Forest Grove public schools, is also a pragmatist. Schools are strapped, and he's willing to put aside his distaste for commercialism in order to raise cash for the schools. "I agree with DD Marketing that we can offer up the whole district and increase our procurement power," he says. "Once the decision is made, I'll do everything I can to maximize revenues." In late February, the Blue Ribbon Finance Committee to the Portland Public School Board offered some glum findings. Since 1991, the district has eliminated 583 full-time positions, including 240 teachers and counselors. Moreover, the committee determined that PPS is facing a $23.1 million gap to maintain current services for the 1998-99 school year. In short, the report confirmed everyone's fears: Portland's schools are hurting. Though a $2 million districtwide contract with Coke or Pepsi would only make up a fraction of the looming funding shortage, school board member Abrams says taking the corporate bait is tempting. "It is something we are discussing right now," he says. "Should we allow advertising in the schools? If we're talking seven-figure contracts, I'd be inclined to go for it. We don't want to turn the hallways into a New York subway, but I'm going to look seriously at anything." School board member Jordan says the board has asked school administrators to look at deals that other school districts around the country have struck with corporate sponsors. Tam thinks Jordan is opening a Pandora's box. As usual, he is at absolute odds with his colleagues. Despite the schools' dramatic budget problems, Tam sees any solution involving corporate alliances as anathema. To write him off as an uncompromising idealist, however, would be a mistake. Tam is right to move the debate beyond simply asking how much commercialism is appropriate in schools. He ups the ante to address the broader question: Why is the district in this awkward dilemma in the first place? "I believe public schools should be funded by public tax dollars," he says. "Let's go to the Legislature and the ballot box to get the funding for the public schools. And let's get corporations to pay their fair share of taxes--instead of letting them come in through the back door to let them advertise." |
