By ANJETTA McQUEEN
AP Education Writer
The Associated Press

WASHINGTON (AP) -- With little state oversight, schools short on cash and long on needs are making commercial deals -- soda machines in hallways, football scoreboard ads, in-house television spots -- in return for financial support from businesses, congressional investigators report.

One of the lawmakers who requested the study said he did not want to force states to adopt or tighten laws against commercial advertising in schools. Still, Representative George Miller, worried that the ads may promote unhealthy or inappropriate activities or products for schoolchildren.

"It's not like Americans are advertising-deprived; maybe schools should be a little bit of a sanctuary,'' said Miller, D-Calif.

The report by the General Accounting Office, the investigative arm of Congress, said little about whether the school ads were appropriate.

But Senator Christopher Dodd, D-Conn., said Thursday that the most troubling findings were that many companies were gathering such information as addresses, ZIP codes and purchasing habits from students and that sometimes the school officials who contracted with the companies told GAO they were unaware of the data gathering.

"All we're trying to do is put up a warning sign," said Dodd, adding that no state regulates market research in schools. "The three R's should not stand for retail, resale and rebate."

Most state laws pertaining to school ads were found to be weak enough that the decision of whether to promote a product on school grounds was left to school boards and principals.

School officials struggling with limited budgets and a need for equipment and lessons often are entering agreements with businesses that are attracted by the growing buying power of America's youth, the report concluded. Also, the officials rarely needed permission from parents or others to use commercial products, the report said.

Only California, New York, Florida, Illinois and Maine specifically limit certain types of advertising and other commercial activity within their public school buildings, the report said.

Researchers said just 19 state laws even address school-related advertising.

The report looked at how states regulated everything from on-campus soda machines, company logos on athletic scoreboards, television ads on Channel One or commercial stations shown in classrooms, to corporate gifts and grants such as McDonald's poster contests and Pizza Hut's Book-It program.

Currents laws -- mainly covering fund-raisers like candy and gift-wrap sales -- were weak, varied and offered little guidance to schools boards, superintendents and principals, the report said.

Company representatives have defended their contracts and sponsorships, saying they provide valuable resources and a high-profile commitment to an embattled public education system.

Channel One, a daily news broadcast that offers free television sets and satellite dishes to schools reserving reserve time for students to watch the show, earns high ratings from teachers, says Eileen Murphy, spokeswoman for Primedia, Channel One's parent company.

She said ads on the show are approved by a committee of educators. "We have never had a complaint," she said.

Critics of these commercial arrangements wonder about the role and influence of private entities on public education.

"Even though predatory commercial advertising has been growing for years, few state legislatures and school boards have done their job to protect children," said Gary Ruskin, director of Commercial Alert, a Washington consumer watchdog group started two years ago by Green Party presidential hopeful Ralph Nader. Copyright (c) 2000 The Associated Press

By CONSTANCE L. HAYS
The New York Times

From exclusive soft-drink contracts to computers displaying continuous advertising, corporate marketing in public schools is rising sharply. But few states have laws in place to address the phenomenon, and most decisions on commercial arrangements in schools are made piecemeal by local officials, according to a report from the General Accounting Office scheduled to be released today.

"In-school marketing has become a growing industry," the report stated. "Some marketing professionals are increasingly targeting children in schools, companies are becoming known for their success in negotiating contracts between school districts and beverage companies, and both educators and corporate managers are attending conferences to learn how to increase revenue from in-school marketing for their schools and companies."

Until now, there has been no comprehensive effort to measure the number of commercial contracts with schools. But school board officials, consultants and nonprofit organizations that follow education issues say it is clear that such contracts are far more common now than they were even two years ago.

About 25 percent of the nation's middle schools and high schools now show Channel One, a broadcast of news features and commercials, in their classrooms, and about 200 school districts have signed exclusive contracts with soft-drink companies to sell their beverages in schools. And in at least one case, students using computers in classrooms were offered incentives to enter personal data -- names, addresses, information on personal habits -- which would then be sold to advertisers.

Recognizing that the nation's 47.2 million students are an increasingly lucrative target market for consumer product companies, school districts are often willing to join with corporations. They see the money as one way to supplement tight budgets without having to raise taxes. But at the same time, few school officials are an even match for experienced corporate marketers. "They're trained in the three R's, and the R's don't include retail," one North Carolina school official noted last year. Over the last three years, many school districts have signed contracts with soft- drink giants like Coca-Cola and Pepsico, in which vending machines in hallways function as glowing billboards for their brands. A math textbook published in 1995 by McGraw-Hill and approved for use in about 15 states names many consumer products, including Gatorade, Sega and Sony video games and Nike sneakers, in its problems. McGraw-Hill said it received no compensation for the use of the corporate names.

Companies like Zap Me, which is based in San Ramon, Calif., offer schools free computers with screens that include continuously flashing ads. Zap Me also collects information that students provide and makes it available to its advertisers -- including Microsoft and Toshiba, which also supply the computers -- said Bob Stern, a spokesman for the company.

The G.A.O. report cites textbook covers distributed by Clairol, Ralph Lauren, Reebok and Philip Morris with company names and logos fully displayed. In New York City, the Board of Education is considering a plan that would provide computers for all of its students, starting in the fourth grade. The computers might carry ads and possibly encourage shopping on a particular Web site.

A spokesman for the National Soft Drink Association said local bottlers signed contracts with the schools in part to support the schools and in part to promote their products. "The brand loyalty that is gained by having these products available to kids when they get thirsty during the day is valuable to these companies," said Sean McBride, the spokesman.

All the activity has aroused concern in communities from Montclair, N.J., to Madison, Wisconsin, to Birmingham, Alabama, where companies have made deals with schools that let them promote their products to students. The demand for product placement in schools has even created a separate consulting niche.

School districts are expected to make decisions about commercial agreements using their own discretion, said Renee Williams Hockaday, a spokeswoman for the National School Boards Association in Alexandria, Va. "It is obviously a growing issue," she said, adding that the agreements "could be something positive, as long as the students don't turn into walking advertisements for these companies with no benefit to their learning environment."

The report, prepared over the last year, is the first government study to address commercialism in schools. It stops short of pinpointing the effects of in-school advertising, noting that "because advertising in ubiquitous in America, it is difficult -- if not impossible -- to distinguish between the effects of advertising to which students are exposed inside and outside of school." The G.A.O. will study the issue again in the next year or so and quantify the spread of commercial activity in schools.

The report, which includes color photographs of ads atop school bus stops, over computer carrels and on soda vending machines, was ordered by Representative George Miller, a Democrat of California, and Senator Christopher J. Dodd, a Democrat of Connecticut. In an interview, Mr. Miller said he was prompted by concern over data being collected about students through computers given to their schools by Zap Me.

"Not a lot of attention is being paid to whether parents agree with this or want their children to participate or not participate," he said. "Sometimes parents have a different opinion from that of the superintendent or the school board."

Senator Dodd said he planned to send letters to parent-teacher groups around the country to urge them to read the report. There is still time, he said, for lawmakers and others to resolve the issues. "This hasn't gotten totally out of hand yet," he said. "Most schools are still doing a pretty good job." He added, however, that he was shocked that many schools said they were unaware that the "free" computers they received from companies could be used to collect, and sell, marketing data from their students.

"There is a tremendous amount of information being solicited and used to market back to kids without administrative consent or parental consent," he said. "If you had an 8-year- old or a 10-year-old, would you allow someone to come into your house to do a survey on your child without your consent?"

The report is being hailed by some as proof that commercial activity in schools is a growing threat. "This is the first official government confirmation that commercialism in schools is a problematic issue," said Andrew Hagelshaw, director of the Center for Commercial-Free Public Education in Oakland, Calif., which has waged many grass-roots battles against soft-drink contracts and Channel One. "Public schools are publicly funded and are supposed to be the one place where kids don't get advertised to. It's completely inappropriate to turn that venue into a place where companies get to promote brand-name products."

Mr. Hagelshaw said he had seen something of a backlash against commercialism in schools recently. Last year, the 15-million-member Southern Baptist Convention passed a resolution against Channel One, because it advertises to schoolchildren. In Madison, Wis., one of the first school districts to sign an exclusive contract with Coca-Cola, the school board recently voted not to renew the arrangement. San Francisco earlier this year turned down an exclusive contract with Pepsi, Mr. Hagelshaw said.

Another longtime critic of commercial activity in schools predicted that the report would encourage state legislatures to act. "This is going to raise the visibility of this issue enormously," said Alex Molnar, a professor of education at the University of Wisconsin-Milwaukee, who directs the university's three- year-old Center for the Analysis of Commercialism in Education.

Mr. Miller and Mr. Dodd have sponsored a bill, now part of the Elementary and Secondary Education Act, that is pending before the House and would require parental consent for market-research activities in schools.

"Let's not pretend this is child's play," Mr. Miller said. "This is not some benevolent effort to give away computers. This is a cold, calculating effort to make customers out of children."

Mr. Molnar says students could be harmed by the promotion of products through schools. "One could argue that a person comes to the marketplace skeptical, as a consumer," he said, "but in a school, everything that's going on is supposed to be good for you. When you take that venue and you exploit it for a particular special interest, you do a lot of damage to children." For example, he added, soft drinks, candy, snack food and fast food are all advertised in schools in many places, lending them a credibility they may not deserve nutritionally.

"Ultimately, this is the kind of thing that promotes cynicism in children," he said.

With eyes often bigger than their budgets, school districts have become prime targets for advertisers eager to reach a captive student audience in exchange for sponsorships and free equipment.

Schools in the East Bay and across the country are signing commercial deals, agreeing to everything from exclusive soda contracts to football scoreboard ads and free notebooks sporting corporate logos, with little oversight or consistency, congressional investigators report.

"The effort of trying to market to children while they're in school and trying to promote products to children while they're in school is increasing," said Representative George Miller, D-Martinez, one of two members of Congress to request the General Accounting Office report.

"This is an emerging, but fast-growing effort because young people have an awful lot of money to spend."

The federal report didn't offer any suggestions or calls for reform, but pointed out the vast differences in how schools deal with advertisements and said the lack of guidelines leaves many decisions to be made on the fly.

The report cites one Colorado district administrator who sent a letter urging principals to allow students virtually unlimited access to Coke machines and to consider allowing drinks in classrooms to increase sales and therefore profits to the school. California is one of just 19 states to have laws regulating commercialism in schools, and one of only five states to have what federal investigators called "comprehensive" laws on the books.

School boards here are allowed to enter into exclusive soda contracts and can grant exclusive electronic advertising contracts.

But state law prohibits schools from using textbooks and other instructional materials that have excessive brand name exposure -- some new math books, for example, teach fractions through counting M&Ms and have students calculate how much money they need to save to buy a pair of Nike shoes.

Still, advertising in area schools is rampant, and the lucrative offers are just beginning to roll in.

"We're confronted all the time with people wanting to give us all sorts of interesting things," said Bob Bronzan, deputy superintendent of the Livermore school district. "In each case we have to consider what we're getting out of the deal, and what the cost would be to get this if we didn't have the advertising."

From Richmond to Dublin, schools have long contracted with fast-food restaurants such as Wendy's, Taco Bell and Little Caesar's to help manage the lunch-time crush. Soda machines aren't new to campuses either, but what is, said Andrew Hagelshaw of the Oakland-based Center for Commercial-Free Public Education, is the nature of the advertisements.

"Commercialism in schools is not new, but what's changed in the last 10 years is the level of aggressiveness," he said.

Revenue generated from soft drink contracts varies. The Oakland school board this week turned down an $11 million exclusive contract with Pepsi, while schools across the country report earning anywhere from $12 a year to $67,000 in up-front payments.

The stakes are fairly low at Antioch High School, but Principal Jeff Reich still welcomes his school's five-year, $50,000 Coca-Cola contract.

"As long as the school benefits from the deal, I think it's OK," Reich said. "And it's not like there's a Coke sign hanging all over the place. I think the only place on campus where there's a Coke sign is on the stadium scoreboard."

Soda contracts are the most common commercial deal in schools, and are largely noncontroversial, federal investigators said in the report.

"One school board member told us that exclusive soft drink agreements had been in his district since the 1950s, and the only difference between then and now was that the schools have learned to make money from them," the report states.

But commercialism is reaching beyond food machines and school cafeterias and into the classroom.

ZapMe! is one of the latest in school advertising moguls and is shaping up to be as controversial as Channel One, a 10-minute in-the-classroom news show that offers two minutes of commercial time in exchange for free audio visual equipment for the schools.

ZapMe!, a San Ramon-based marketer of broadband Internet access, gives schools up to 15 free computers with 17-inch monitors, a high-speed Internet connection and a printer -- but with a catch. The computers show constant on-screen ads, and schools have to use them an average of four hours each school day in order to keep the equipment.

Bob Stern, a publicist for ZapMe!, said a little extra Web advertising is a small price for public schools to pay for its services. "Students can do research, get help with their homework, teachers can use it as a classroom resource and even keep a grade book online with secure access for students and their parents...and it's free," Stern said.

Livermore's Junction Avenue Middle School recently joined 1,800 schools nationwide to sign on with ZapMe!, and Bronzan said other schools in the district are considering signing up, too.

Officials at schools hungry for money say it can be hard to turn down the deals.

"If a corporation offered to pay for an additional teacher in exchange for passing out T-shirts at the school, I'd be listening real hard," said Michael Roth, superintendent of the John Swett school district in West Contra Costa County.

While commercialism is a common presence on school campuses, not all districts are willing to sign on the dotted line.

The Moraga school board discourages commercial activities at its schools. And the Walnut Creek school district has a policy that bans "endorsing or appearing to endorse any private business, establishment, service or product over its competitors."

Even in Livermore, where advertisers have already infiltrated the classroom, district administrators remain hesitant.

"We're really not out there to push their products on kids," said Don Gatti, Livermore's assistant superintendent of business. "They get enough of that."

Kara Shire covers education. Reach her at 925-847-2123 or kshire@cctimes.com.

Staff writers Karl Fischer, Timothy Tyler, Suzanne Pardington and Andrew Jokelson contributed to this story.