In the school improvement business, making the newspapers means you've achieved some level of success and, unless the reason for the attention is already a scandal, now have a big fat bullseye hung around your neck. Still, Will York's article in the Boston Globe on Educational Services of America (ESA) speaks to points I've made before.

Most Education Management Organizations have proved to be poor investments, but there are exceptions.

One exception is the EMO controlled by its founders. Firms like National Heritage and White Hat can avoid what I've called "the tyranny of the business plan"; expanding only where circumstances imply long-term profitability, rather than wherever clients or sponsors seem willing to help management meet growth targets sold to investors.

A second exception is the specialized EMO, doing business school districts want to avoid. California's Opportunities for Learning/Options for Youth (OFL/OFY) is one example, working to put dropout's back in the school system. The state of California has disputes with the group over fees, but school districts sponsor their charter schools - a rarity in the politically-charged EMO environment.

ESA, based in Nashville, Tennessee is another example. It works in 120 schools in 16 states serving 7,800 students, and earned revenues of $75 million last year. Its market? Special education students, from elementary school all the way to college prep. Trimaran Capital Partners invested in ESA in 2004.

Yes, there are detractors of "privatization" in this segment, but they are not teachers unions or school administrators. And yes, the area does carry public relations risks if children are mistreated or make claims of mistreatment. And, as with OFL/OFY, there is a general issue of how much these firms are being paid for their services. But in my view, the great opportunity here for k-12 investors is that these firms generally avoid the rough weather continuously swamping the likes of "mainstream" providers like Edison (although maybe the Globe article signals a sea change). When the climate becomes more accepting of private sector involvement in public education generally, these will be the firms ready to meet the demand.

(By way of full disclosure: ESA is a client of K-12Leads and Youth Service Markets Report, my firm's RFP reporting service, priced at $1500 per year. I have known the firm's Chief Development Officer, John McLaughlin, as a professional colleague since the dawn of the k-12 education industry in the early 1990's, even before he started the now-defunct Education Industry Report.)