Forbes, the millionaire moniker signifying wealth and all its triumphs, is now trying to make a name for itself in online education.
The magazine publisher just sold part of its naming rights to an online, for-profit education venture: Ashford’s College of Business and Professional Studies, which will be renamed the Forbes School of Business.
The price paid for the rights to slap the Forbes name on these virtual classes: $15 million up front, plus a guaranteed minimum of $2.5 million a year for the next 12 years. Forbes could make more than the combined $45 million based on annual revenue from Forbes’s business school.
The news business is changing fast, and publishers are looking for unconventional revenue streams. More media companies are experimenting with conferences, and sponsored content that blurs the lines between editorial and advertising. In the rush to reinvent the model, some of these initiatives float into ethical gray areas.
“A lot of the rules are changing,” Mike Perlis, CEO of Forbes Media, said in an interview. “In terms of the perception here, I know where the concerns are coming from, but I think the products we’ve put together and the partner we’ve got, it’s a great extension of our high-quality content.”
Forbes, now partly owned by U2 frontman Bono and his venture-capital firm Elevation Partners, has seen advertising decline and profits dwindle along with the rest of the magazine industry. Ad sales at the biweekly title fell 7.5 percent through September to $166 million, compared with a year earlier, according to the Publishers Information Bureau. Annual ad sales were $275 million last year, down almost 20 percent since 2008.
The Forbes family was forced to sell off chunks of their accumulated wealth — some of which had taken the form of Faberge eggs, Victorian art and a 171,400 acre ranch in Colorado that sold for $175 million in one of America’s biggest private real-estate transactions. Onetime U.S. presidential candidate Steve Forbes still controls the media company that bears his name.
The new Forbes School of Business will make use of content produced by the magazine and its website for the purposes of teaching. According to Perlis, the publication’s writers might be asked to contribute articles tailored to some of the classes. “Some of them might even become guest lecturers,” he said.
The company behind the online school, Bridgepoint Education, is part of the $30 billion-a-year for-profit education industry. Even without journalistic tie-ins, the online-education business is controversial. Some for-profit entities such as Kaplan, owned by the soon-to-be-renamed Washington Post Co., have come under scrutiny for its aggressive recruiting practices at the taxpayer’s expense.
Bridgepoint’s sales have been on a steady uptick, going from $218 million in 2008 to $968 million last year. But the company has hit a rough patch this year, with student enrollments dropping a precipitous 25 percent. The company owns two other schools, the University of the Rockies and the Denver Learning Institute. Ashford University offers online associates, bachelor’s and master’s degrees and also has an Iowa campus.
Based on current tuition and technology fees at Ashford, the cost of an online bachelor’s degree from Forbes School of Business is about $51,560. That price would cover a magazine subscription for several lifetimes.