Freedom Is No Picnic For Mike MilkenAmy Barrett
You just can't keep Mike Milken down--or out of hot water. Less than a year after his release from federal prison, the former junk-bond baron is sparking controversy again. This time, everybody's riled up over Milken's plan to market tapes of the management course he's teaching at the University of California at Los Angeles. A state senator has condemned UCLA for cutting a deal with a convicted felon. Meanwhile, cartoonist Gary Trudeau very publicly lambasted Professor Milken in his Doonesbury comic strip.
Chances are, this won't be the only dust Milken stirs up as he pushes ahead with a comeback. Permanently barred from Wall Street, Milken has his sights dead set on making it in a less glamorous sphere: educational software. His fledgling business, EEN Communications Network, has invested in one potential supplier of interactive programming, and Milken is scouting others. The UCLA tapes are his first experiment in developing educational programs he figures his company will one day transmit to homes over cable TV. "Our focus is creating educational products that people will want to play, do, or watch," Milken explains.
TAINTED DOUGH. If he ever gets his products to market, that is. California State Senator Patrick Johnston is pressuring UCLA to drop its deal with Milken. In a Nov. 19 letter to university officials, Johnston questioned a copyright agreement that gives the school a share of Milken's profits--university officials say less than 10%--if the tapes are sold. "The University of California should not be engaged in profiteering from tapes on `pop' economics presented by a convicted felon," Johnston argued.
UCLA and Milken plan to go ahead with the partnership. Carol Scott, an associate dean at UCLA's B-school, says the university did the deal to be sure the school had control over the use of its name. Scott also says that Milken's history--including his 22 months in federal prison after pleading guilty to six charges of securities fraud and other violations--should not preclude him from teaching. "We have very mature adult students," she says, "who can hear different views and decide for themselves."
Milken dismisses the flap. He says he is considering teaching again in the spring. And he denies using the class as a forum to air his views about the junk market or his legal problems. "I don't think Senator Johnston knows me," Milken says. "And he doesn't know anything about what I did for a living."
Indeed, Milken insists that EEN eventually will be a big business. He figures the UCLA tapes could help his new enterprise design teleconferencing classes for MBA students and business executives. Searching for the right interactive technology for the network, Milken has looked at more than 200 companies for possible investment. He made his first move in August, investing an undisclosed sum in 7th Level, a multimedia startup founded by former Micrografx Inc. executive George D. Grayson and former Pink Floyd sax player Scott Page. 7th Level's first product--an interactive cartoon with the voice ofcomedian Howie Mandel--is due out in January.
SPELLBINDER. Milken expects the 7th Level investment to be just the first of many. He hopes his network one day will broadcast eight channels of interactive educational programs. Milken's charisma is already helping 7th Level. Tapping his network from his junk-bond days, Milken brought Lorimar Telepictures co-founder Merv Adelson into the company as an investor. Milken also has introduced the 7th Level executives to music producer Quincy Jones and Craig O. McCaw, founder of McCaw Cellular. And he still has plenty of other powerful friends. Mirage Resorts Chairman Stephen A. Wynn has spoken to his class, and MCI Communications CEO Bert C. Roberts Jr. is expected soon.
Milken hardly needs work. His fortune is estimated at more than $300 million, and he's writing an autobiography and helping fund research into prostate cancer, with which he was diagnosed in February. Still, educational efforts are taking more and more of his time. A Milken speech last summer to inner-city parents about DARE PLUS, the afterschool program he coordinates under the terms of his probation, drew a crowd of 800. "He generates tremendous enthusiasm," says DARE America Executive Director Glenn Levant.
No doubt. The question now: Can Milken generate enough enthusiasm to make his educational network a hit?