1 Lightning Bolt After the university then employing him passed on his idea, professor John Sperling took the plunge. In 1976, at the age of 55, he started the University of Phoenix, catering to already working grown-ups aiming to finish their schooling, add a credential or start a second career. Unlike most institutions of higher education, the corporate parent, Apollo Group, would be flexible in scheduling classes, and it would make a profit. In 1983 his son, Peter, joined the Phoenix-headquartered operation. The two of them were positioned perfectly for the explosive growth that came in adult and over-the-Internet education. The Sperling family business became the country's largest private university. Four years after Apollo Group went public in 1994, Sperling père et fils made The Forbes 400 list. Except for a three-year break they have been on ever since, this year at $1.3 billion each. Were they smart or lucky? To us it looks like a desire to show the former over the latter was at least partly behind their decision a few years ago to reduce their active Apollo Group involvement and strike out on sharply different paths to make a splash with new ventures. The Sperlings wouldn't comment. Early indication: more lucky than smart. An important outside interest of John, 85, has been getting creatures--perhaps including himself--to live longer. (His Ph.D. from University of Cambridge is unrelated: It's in economics.) His main vehicle seems to be Exeter Life Sciences in Phoenix, where he lives. For a $2,500 fee one unit, Kronos Group, offers patients a battery of 75 tests to determine how fast they're aging. Another Sperling business, ViaGen, in Austin, Tex., clones farm animals. A third, in Sausalito, Calif. and (groaningly) called Genetics Savings & Clone, stores DNA and will clone a customer's cat. The $32,000 price tag may be one reason the last entry on its Web page listing "our latest clones" is dated December 2004. (John spent a reported $2.3 million on a failed effort in Texas to clone Missy, his beloved pet dog.) A committed liberal, John also published a call-to-action book during the 2004 election season entitled The Great Divide: Retro vs. Metro America. He and four coauthors describe how liberal blue states suck dry conservative red states. John funded a $2 million ad campaign for the book. You might recall the electoral outcome for George W. Bush and his fellow conservatives. Business associates of Peter, 46, say an additional reason for his other interests was to show that he could thrive outside his father's considerable persona. (Peter has kept his board seat and senior vice president title at Apollo Group, although the corporate Web page doesn't list him among its executive officers.) For three consecutive years he bought the most expensive house in San Francisco, including $32 million for an unfinished Pacific Heights palace with Gordon Getty and Larry Ellison as neighbors. After spending another $18 million, Peter just put the 22,000-square-foot house up for sale, for an optimistic $65 million. Bay Area agents even talk about something called the Sperling Factor: "Everyone is expecting to get more for their homes than they are worth." Another Peter Sperling enterprise, Daedalus Real Estate Advisors, is developing resort property in Vail, Colo. Peter and his family are said to spend most of their time in Santa Barbara, where he once attended the University of California (before earning an M.B.A. from the University of Phoenix). He bought a big house there and helped fund a school and a park. Also in Santa Barbara: CallWave, a communication services company of which Peter is chairman and a 19% owner. Since the end of 2004 the share price has dropped 80% to a recent $3. He is also chairman of and a large investor in Communication Services, a Phoenix firm that sites cell phone towers, and Ecliptic Enterprises, a small Pasadena, Calif. outfit that provides images from space for government and private customers. Thus distracted, the pedagogic duo witnessed some serious slippage at their university venture. Growth slowed as baby boomers aged past their likely years of education. Federal regulators are now probing dubious stock option grants while various lawsuits allege violations of federal student loan programs and recruitment abuses. Apollo Group denies wrongdoing. But from a peak of $98 in June 2004--the very same month John stepped down as chairman--shares have fallen to a recent $50, helping to turn a $3.9 billion family fortune into $2.6 billion. The drop appears to be many times the value of whatever John and Peter have created elsewhere. In January the Apollo Group chief executive was let go, and John returned as "acting executive chairman," a post he retains. Right now the Sperlings could use a dose of both smarts and luck, if only to disprove that old saw that the fastest way to amass a small fortune is to first have a large one. http://www.forbes.com/columnists/forbes/2006/1009/032.html?_requestid=4165
I just heard on CNN that they have to pay 154 millions in fines. I wondered if this is only a drop in the bucket for them?
There may be some sour grapes in the Forbes article. Anyone here willing to settle for "only" 2.6 billion?
Heck, they just spent $154.5 million on naming rights to the Phoenix Cardinals football stadium. I'd say $154 million is probably a drop in the bucket.
