As a result of a state takeover, the School District of Philadelphia has been implementing a "diverse provider model" in which for-profit and nonprofit organizations have been hired as school managers. This study explores the first three years of the model, examining the shift away from the rhetoric of competition to the evolution of a public-private hybrid system that emphasizes collaboration between the district and the providers and among the providers themselves. In this new hybrid model, both sets of actors are adapting to support cross sectoral collaborative relationships. Although this hybrid system is directed toward strategically filling gaps in leadership and resources, the implications for improvement of schools, student achievement, accountability, and civic engagement are still unclear.