Apollo Group CEO John Sperling Looks to Broaden Boundaries of Higher Education
JOHN SPERLING, CHAIRMAN & CEO, APOLLO GROUP: If you never stop fighting, you never stop to think that you're going to lose and until you actually lose, until you're down and dead, you don't think you're going to lose.</s>BEVERLY SCHUCH, HOST (voice-over): John Sperling is about living, reborn several times after close brushes with death. In fact, he's a lot like the mythical bird the phoenix, having risen from the ashes of his own adversity. He was born the son of an impoverished sharecropper who beat him regularly. As a youth, he worked the farms in the Ozark Mountains shucking barley. He didn't learn to read until he was 16. He faced bankruptcy twice and cancer once. But John Sperling is a fighter and has overcome these hardships to soar to the highest level of entrepreneurial success.</s>JOHN SPERLING: Fortunately, there were no laws governing institutions of higher education so all I did was start a corporation and name it the University of Phoenix.</s>SCHUCH: All John Sperling did was create what has become the nation's largest for profit university and certainly the most unusual. Its 74,000 students must hold full-time jobs. Its 52 campuses in 35 states are actually housed in office buildings and there are no dorms, no student unions and certainly no football teams. But the unusual university that John Sperling created in 1978 has become the talk of higher education, not all of it flattering. While his peers criticize Sperling's concept, they can't argue with his credentials, including Ph.D. from Cambridge University. (on camera): You were originally criticized as being a diploma mill.</s>JOHN SPERLING: A diploma mill.</s>SCHUCH: A diploma mill.</s>JOHN SPERLING: Right.</s>SCHUCH: Just giving them out without accreditation, without any foundation.</s>JOHN SPERLING: Yes. Yes. That's true.</s>SCHUCH: And what did that make you think?</s>JOHN SPERLING: Well, the thing that helped a lot is that because I was a legitimate academic, it was difficult. They couldn't say that I wasn't an academic. They just said that I was a rogue academic.</s>SCHUCH (voice-over): But Sperling defied the educational establishment that tried to run him out of town.</s>JOHN SPERLING: I had students but no college so I set up the University of Phoenix.</s>SCHUCH (on camera): Who wouldn't have thought that there wasn't a University of Phoenix? I mean you came in and invented it.</s>JOHN SPERLING: Yes.</s>SCHUCH: People could not have been happy about that.</s>JOHN SPERLING: Well, they weren't happy. They were incensed that this California carpetbagger had come down here and stolen the name of their fair city.</s>SCHUCH (voice-over): It took a while, but Sperling is gaining the grudging respect of his peers and the not so grudging respect of Wall Street, after the University of Phoenix reported revenues of a half a billion dollars last year. The parent company, Apollo Group, is doing even better.</s>JOHN SPERLING: We took the company public and the IPO, the stock increased by 20 times and I was holding, my son and I were holding a third of the company or nearly 40 percent of the company. We don't own that much anymore, but we own about 30 percent. But 30 percent of $2 billion is a lot of money.</s>SCHUCH: Sperling has used his newfound wealth to pursue a grab bag of causes, from prolonging human life to legalizing marijuana to feeding the world.</s>UNIDENTIFIED COLLEAGUE: Dr. Sperling, you're making one hell of a contribution.</s>SCHUCH (on camera): You have a lot of money now.</s>JOHN SPERLING: Yes.</s>SCHUCH: You have a son...</s>JOHN SPERLING: ... who also has a lot of money.</s>SCHUCH: Who also has a lot of money. What are you going to do with all this money?</s>JOHN SPERLING: I'm starting, as you know, drug law reform is very expensive. It costs millions of dollars a year.</s>SCHUCH: So this is your indulgence?</s>JOHN SPERLING: Yeah, that's one of them. And then two other indulgences, Seafire International (ph), which is a saltwater agricultural company that is one day going to save the world, I might add...</s>SCHUCH: Modestly.</s>JOHN SPERLING: ... by stopping the global warming problem. And then I have Chronos (ph), which I'm trying to use as an instrument to reform medical practice in the United States.</s>SCHUCH (voice-over): John Sperling has overcome poverty, conquered a learning disability and risen to the status of multi- millionaire. Yet why does Sperling call his own father's death a miracle?</s>JOHN SPERLING: It's still the happiest day of my life.</s>SCHUCH (on camera): And you have no remorse about this?</s>JOHN SPERLING: None whatsoever.</s>SCHUCH (voice-over): The implausible story of John Sperling, chairman of the Apollo Group, is next on PINNACLE.</s>SCHUCH (on camera): How would you characterize your childhood?</s>JOHN SPERLING: It was a disheveled childhood.</s>SCHUCH: Disheveled?</s>JOHN SPERLING: Yes, psychologically disheveled.</s>SCHUCH (voice-over): In his autobiography, "Rebel With A Cause," to be released this fall, John Sperling describes an upbringing marked by sickness and poverty. His mother, he writes, was the most influential person in his life. His father, the most despised. (on camera): Was he ever a good father to you?</s>JOHN SPERLING: No.</s>SCHUCH: When did you first hate him?</s>JOHN SPERLING: Probably the first time he became a conscious part of my life. There was something about him that I just didn't like from a very early age.</s>SCHUCH: At some point it was dislike that turned to, you know, loathing.</s>JOHN SPERLING: Well, in looking back on it I perceived him as weak, cowardly and cruel. There was nothing about him I liked. So a person that has no redeeming qualities is easy to begin to dislike and then if they're abusive, the dislike turns into hatred. So it seems pretty normal to me.</s>SCHUCH: And he hit you?</s>JOHN SPERLING: Oh, yeah, lots of times.</s>SCHUCH: But you turned the tables on your father.</s>JOHN SPERLING: Well, I threatened to kill him.</s>SCHUCH: How old were you?</s>JOHN SPERLING: Nine or 10, I think I was 10.</s>SCHUCH: What did you say?</s>JOHN SPERLING: I said I'll kill you in your sleep if you ever hit me again.</s>SCHUCH: And that was it?</s>JOHN SPERLING: See, he was cowardly enough he believed me.</s>SCHUCH: You'd have had more respect for him if he'd have hit you again?</s>JOHN SPERLING: No, I'd have killed him.</s>SCHUCH: That's a lot of anger for a little boy.</s>JOHN SPERLING: Um-hmm.</s>SCHUCH: You say in your book that, you refer to his death when you were 15 as the miracle.</s>JOHN SPERLING: Yeah.</s>SCHUCH: The miracle.</s>JOHN SPERLING: It's still the happiest day of my life.</s>SCHUCH: And you have no remorse about this?</s>JOHN SPERLING: None whatsoever.</s>SCHUCH (voice-over): On that day, John Sperling rose from the ashes of his childhood hell. His father's beatings would not be his worst ordeal.</s>JOHN SPERLING: Well, I was in a neighbor's cherry orchard eating, unfortunately, not quite ripe cherries and got a terrible case of dysentery and stomach upset and for some reason I guess it lowered my resistance and I got pneumonia and the pneumonia did not go away. Finally, it went away, but not until one of my lungs had filled up with pus and it was pretty clear that I was going to choke to death, and if the other one started. So they decided that they had to drain it and this was before general anesthetic, anesthesia. So they gave me local anesthesia and put me onto an operating table and cut the rib open, brought a hunk of the rib out.</s>SCHUCH (on camera): Do you remember that pain?</s>JOHN SPERLING: Yes, I do.</s>SCHUCH: Ever felt anything like it?</s>JOHN SPERLING: No, fortunately. And then they stuck a tube in it and it drained and I was in bed for a year.</s>SCHUCH (voice-over): That brush with death has haunted Sperling his whole life. When he finally returned to school, the once gregarious child had become a loner, timid and withdrawn from his classmates. And then there was another problem, John Sperling couldn't read. (on camera): You have found out since that you were dyslexic.</s>JOHN SPERLING: Yes.</s>SCHUCH: Do you think that you were functionally illiterate at that point in your life?</s>JOHN SPERLING: Yes, in the sense that I, it was painful, painful, painful to sort of parse out sentences and try to struggle my way through these courses.</s>SCHUCH: And now you have a Ph.D. from Cambridge University.</s>JOHN SPERLING: Um-hmm.</s>SCHUCH (voice-over): The turning point for John Sperling came after his father's death. He graduated high school, joined the Merchant Marine and went to sea.</s>JOHN SPERLING: For some reason I was able to cure the dyslexia. I don't really know how I did it, but I did it. And then I became an avid reader and just devoured books and anything I could lay hands on. And then I became more and more intellectually interested and began to think of myself as well, yeah, I'm not so stupid, and decided that I'd get an education.</s>SCHUCH: But something else happened on that ship.</s>JOHN SPERLING: Yes, I became ideologically are. That was also, that was terribly important. As Frantz Fanon says, that you have to become political in order to develop your intellect and that happened to me.</s>SCHUCH (voice-over): The political activism John Sperling picked up in the Merchant Marine would become a recurring theme in his life.</s>JOHN SPERLING: Just checking on the latest news flashes.</s>SCHUCH: From fighting university administrations as a teacher's union activist to battling anti-drug laws to creating a DNA bank for the cloning of animals, the radical pursuits of a rebel with a cause, the next chapter in the story of John Sperling when PINNACLE returns.</s>SCHUCH (voice-over): In 1968, when the black students at San Francisco State demanded more black studies programs, John Sperling, then a humanities professor at San Jose State, saw an opportunity. He piggybacked on their protests, organizing his fellow teachers in a sympathy strike for faculty rights. Sperling and his six-year-old son led the pickets.</s>PETER SPERLING, CHAIRMAN, CALLWAVE: I remember most vividly the strike at the San Francisco State college and being out on the picket line and being very cold and then comfortable.</s>SCHUCH: Sperling and his son also attended another teachers march in Sacramento when Ronald Reagan was governor.</s>JOHN SPERLING: Peter was sitting right in the front row and Ronald Reagan came out and we all booed like. It was great.</s>SCHUCH (on camera): You said that, you know, being the union organizer was really imperative to your being a successful entrepreneur. What did that give you?</s>JOHN SPERLING: Well, it gives you, first, you become a very good salesman. You're selling people nothing but potential knocks on the head. They aren't going to get, maybe they'll get something out of it, but you're really selling them a chance to be reviled in some sense by their peers.</s>SCHUCH (voice-over): Sperling himself was reviled by his academic peers when he came up with the notion of an adult for profit university. He began his crusade while teaching at San Jose State University in 1972. There he developed a program to educate local police and school teachers on combating juvenile delinquency. When San Jose State turned down the adult program, Sperling hooked up the with University of San Francisco and seven years later, Sperling took his idea to Phoenix. (on camera): So here's a guy with a very classical, traditional education in some of the finest universities in the world and 20 years teaching in academia and then you decide at the improbable age of 52 to become, as you put it, an unintentional entrepreneur. And how did you get there?</s>JOHN SPERLING: Well, one, I honed my personal skills or interpersonal skills as a union organizer and union leader. That gave me -- without that training I couldn't have been a successful businessman. And it was an unintentional entrepreneur because I didn't think of myself as an entrepreneur. I didn't even realize I was one. I realized that I was becoming an entrepreneur unintentionally and inevitably if what I started out to do was to succeed. And what I started out to do was to have a new kind of education. And in order to keep that alive, I had to leave the university, set up a company and in doing so, when you do that, you're an entrepreneur.</s>SCHUCH (voice-over): Sperling's leadership didn't stop there. He took his university online, pioneering long distance learning programs where students never have to step foot in a classroom to earn a degree.</s>UNIDENTIFIED EMPLOYEE: Let me see if I can do that for you. What's your login password at the student site?</s>SCHUCH (on camera): What percentage of your student population is strictly online now?</s>JOHN SPERLING: There's 60,000 on the ground and 14,000 in the air, as it were.</s>SCHUCH (voice-over): Traditional universities have followed Sperling's lead. Eighty percent of four year colleges, including the University of Maryland, Duke and Harvard offer courses over the Internet. John Sperling's pioneering efforts in adult online education paid off big time. His Apollo Group went public in 1994 and John Sperling, the union organizer who became the boss, became an instant multi-millionaire. The former barley shucker was worth $300 million. He bought art work, collected sculptures and built a mansion. But he never stopped working.</s>JOHN SPERLING: It was about two weeks after I became wealthy that I started my drug law reform.</s>SCHUCH (on camera): But you never were interested in the accoutrements of wealth such as that, were you?</s>JOHN SPERLING: Well, no, never having had it.</s>SCHUCH (voice-over): Sperling's interest in drug reform was at least partly inspired by his use of marijuana during treatment for prostate cancer. As with the other passions in his life, Sperling has attacked the marijuana issue with a vengeance, teaming up with Cleveland businessman Peter Lewis (ph) and hedge fund billionaire George Sorros.</s>JOHN SPERLING: It's unbelievable how much we've achieved in just three election cycles from having the whole issue absolutely off the table. No one would discuss it. It was the ultimate third rail of politics. It was you touch that and you're dead. A federal commission says that there are real medicinal properties of marijuana that should be accepted. Starting in 1996, we won the first two in California and Arizona. Then in '98 we won in Colorado and Nevada. And...</s>SCHUCH (on camera): You won what?</s>JOHN SPERLING: Initiatives to either medicalize marijuana or to reduce the civil penalties or the criminal penalties...</s>SCHUCH: You want to take people out of jail who are in jail for...</s>JOHN SPERLING: Yes. Yeah.</s>SCHUCH: ... what, dealing or smoking or?</s>JOHN SPERLING: No. For possession.</s>SCHUCH: Possession. Ultimately, what do you want to see, total legalization of marijuana?</s>JOHN SPERLING: No, I want to see decriminalization. I think drugs are bad. They have some medicinal usage. Man is a drug taking animal. There's just no doubt about it. Man will take drugs one way or another no matter what you do. And therefore you should do everything you can to reduce the harm and you should not try to totally prohibit it. Prohibition is a loser and not only is prohibition a loser, but interdiction is even worse. We've destroyed two or three societies in South America in the Andes and it's a mindless activity.</s>SCHUCH (voice-over): And that's not all. At age 79 and still going strong, John Sperling has a great many other causes to fight for, including finding the fountain of youth. The continuing saga of the unintentional entrepreneur, when PINNACLE returns.</s>JOHN SPERLING: This is a real cool machine.</s>SCHUCH (voice-over): The near octogenarian education entrepreneur John Sperling has a great many interests. He cooks, he sews, he exercises daily. His Phoenix mansion is decorated with sculptures and paintings, include four Andy Warhol originals. He's a connoisseur of opera, literature and loves to entertain both in his Phoenix mansion and his getaway retreat in San Francisco.</s>JOHN SPERLING: Varsity Books.</s>SCHUCH (on camera): What's the worst thing one can feel?</s>JOHN SPERLING: Boredom. And that in its most extreme form would be depression.</s>SCHUCH: Do you understand happiness?</s>JOHN SPERLING: No. I never thought of being happy. I've never sought happiness. It's not something that concerns me.</s>SCHUCH (voice-over): What does concern John Sperling these days, he says quite humbly, is saving the world. He's teamed up with scientist Cora Hodges (ph) to form Seafire International, a company designed to harvest a crop called salacornea (ph) grown in salt water. Sperling sees this project as a lifeline for poor economies.</s>JOHN SPERLING: The sea water farms are going to be an essential element in, you might call, the economic recovery of both Eritrea and Ethiopia.</s>SCHUCH: And if you want to save the world, then you'd better plan to be around for a while.</s>UNIDENTIFIED TECHNICIAN: Here we go, the scanner on. It's going to move over on top of you.</s>SCHUCH: That's why John Sperling also created Chronos, named for the Greek god of time, a wellness center that combines vitamin therapy with extensive body and blood analysis to help forestall the aging process. And beyond improving the condition of mankind, Sperling's latest challenge, the cloning of animals.</s>JOHN SPERLING: That's another company I've started, Genetic Savings and Clone.</s>SCHUCH (on camera): You're kidding, right?</s>JOHN SPERLING: No. We already have a cryo (ph) bank for DNA for all sorts of animals. We intend to start a cloning service to clone pets and farm animals.</s>SCHUCH: And why?</s>JOHN SPERLING: Because it's possible. There are all sorts of reasons to do it. In addition to one of a kind animals, there are, you can help to recover species that are endangered with extinction. You can do transgenic work with farm animals and create all sorts of medicines for human beings.</s>SCHUCH: And you would want to make money out of this?</s>JOHN SPERLING: Oh, we will make money. We'll make a lot of money at it.</s>SCHUCH (voice-over): John Sperling has no plans at the moment to clone himself, but the Sperling legacy transcends the organizations he's started and the causes he's backed. In fact, of all of his many contributions, the rebel who so hated his own father is proudest of his most personal achievement, his son. (on camera): Tell me about Peter.</s>JOHN SPERLING: Well, he was the light of my life, still is, and he was a wonderful companion. I couldn't imagine a better companion.</s>SCHUCH: You write that you weren't an enthusiastic father to begin with.</s>JOHN SPERLING: That's right.</s>SCHUCH: What happened?</s>JOHN SPERLING: Well, Peter. He was so charming I couldn't resist.</s>SCHUCH: As a little baby?</s>JOHN SPERLING: Yes.</s>SCHUCH: So you changed your life for him actually, didn't you?</s>JOHN SPERLING: Um-hmm.</s>SCHUCH: You quit a job. You just said I can't leave.</s>JOHN SPERLING: Um-hmm.</s>SCHUCH: That's a wonderful feeling.</s>JOHN SPERLING: Yeah. He, sometimes I hear of times when I hear the footsteps hurrying near and when you have a child, you suddenly, you are introduced to mortality and it gets one's attention.