Brill's Content Story on UPI



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(This is a story by Eve Gerber that appeared in the April 2001 edition of Brill's Content, entitled: "Looking for a Miracle: The once formidable United Press International has a deep-pocketed new owner -- Reverend Sun Myung Moon's News World. But the wire's latest benefactor could also be its biggest obstacle."_

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The headquarters of the 94-year-old United Press International lie near the center of power in Washington, D.C., less than a block from the White House. On the sixth floor of the nine-story building sits a typically cramped and cubicled newsroom, the heart of the agency. Although the room's decor is ordinary, its history isn't. As visitors exit the elevator bank, they are greeted by a 1950s photo transmitter and a display of plaques that commemorate, among other honors, UPI's nine Pulitzers. Most of the awards, however, date from the middle of the 20th century; the most recent plaque was inscribed in 1972. And before this past January, visitors couldn't even see them: For several years, the prizes had been relegated to a forgotten corner.

In UPI's heyday, 6,000 employees and dozens of bureaus fed hundreds of bulletins per day to 5,000 subscribing news organizations and competed with The Associated Press for front-page space in the world's great dailies. But the beleaguered news agency has lost nearly all of its clients and cachet -- and hasn't turned a profit since 1961. By last year, the wire's workforce had dwindled to about 150. What's more, no major U.S. metropolitan newspaper regularly carries UPI's copy; the only subscribers the agency can name are The Straits Times (a large Singapore daily) and the Daily Challenge (a tiny, New York-based African-American paper). AP, meanwhile, serves 1,700 newspapers in the United States alone.

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Last May, UPI gained a new owner, News World Communications, which dusted off the awards and began pouring money into the operation. The agency has hired more than two dozen new editorial employees, including such seasoned journalists as John O'Sullivan, the former editor of the National Review, who became the wire service's editor in chief last June. "If you came into the newsroom a year ago, it would've been pretty well deserted," says the 58-year-old O'Sullivan, surveying his new domain. After 5 on a Friday afternoon in February, more than a dozen people were bent over new computers, furiously working to fill the wire. The service now turns out more than 100 news items a day, including long investigative articles, 800-word news analyses, and nugget-size bulletins, which, for now, can be found mainly on obscure websites, such as NewsMax.com.

But UPI's latest benefactor may also be its biggest obstacle to a comeback.

News World is a deep-pocketed media conglomerate that belongs to the temporal empire of the Reverend Sun Myung Moon, who leads the Unification Church and also owns The Washington Times, which he founded in 1982. Some UPI employees, such as the doyenne of the White House press corps, Helen Thomas, who had stuck with the service through its decline, resigned to protest the purchase. And the man expected to save UPI, Arnaud de Borchgrave -- a charismatic journalist who had spent 30 years as a Newsweek foreign correspondent -- abruptly resigned as CEO in December, barely seven months after stewarding the wire's sale.

The Unification Church isn't shy about explaining Moon's motives. "We want to definitely influence and impact the flow of information to be more value-oriented," Unification Church spokesman Reverend Phillip Schanker says. The company will likely be patient and financially generous with its new acquisition: News World has been funding the profitless Washington Times for more than 18 years.

By purchasing the remnants of the once proud UPI, Moon's followers, popularly (and pejoratively) known as Moonies, acquired at least the appearance of influence. The perception that News World has power over international news organizations might benefit Moon's movement, and the company's coffers give UPI a badly needed cash infusion. But at what cost: Will Moon's News World further tarnish UPI's reputation, or will it nurse the wire back to health?

News World is "very happy to stand behind UPI," says Jack McLean, UPI's director of marketing and sales. "They regard UPI, as well they should, as one of the great, internationally recognized brands." Indeed, for most of the 20th century, news services were lifelines. Using telegraph cables to transmit content, they provided the only immediate dispatches on current events, and newspapers relied on them.

AP dominated the field from the day a newspaper consortium founded it, in 1848. But the service allowed only one publication per region to purchase its product, which froze papers such as news baron E.W. Scripps's Cleveland Press out of the AP alliance. Frustrated, Scripps inaugurated United Press in 1907. (It became United Press International after merging with International News Service in the mid-fifties.)

From its inception, UPI was the underdog, offering young journalists little pay but a lot of opportunity. (Walter Cronkite, David Brinkley, and The New York Times's Thomas Friedman, among others, got their start at UPI.) Time and again, the upstart, pocket-poor wire managed to beat its competition. According to Lucien Carr -- whose pal Jack Kerouac wrote On the Road using a roll of Teletype paper swiped from UPI's office -- "UPI's great virtue was that we were the little guy [that] could screw the AP." Richard Harnett, who spent more than 30 years at UPI, recalls what is often considered its greatest achievement: Merriman Smith's Pulitzer Prize-winning coverage of John Kennedy's assassination. "Smith was in the press car....When he heard shots, he called in to the Dallas office and sent a flash bulletin," Harnett says. "The AP reporter started pounding on his shoulder to get to the phone, but Merriman kept it from him."

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Despite UPI's spectacular scoops, AP continued to win the war for wire supremacy. UPI's biggest clients were afternoon newspapers, and with the advent of television, that market shrank. By 1962, UPI was operating in the red. According to Ronald Cohen, a former UPI managing editor who co-wrote the book Down to the Wire, which chronicles the news agency's decline, the situation only worsened: Annual operating losses surged to $3.5 million in the mid-seventies, as the syndication of New York Times and Washington Post content further eroded UPI's client base. The financial troubles seemed irreversible, and in 1982, the Scripps family unloaded the agency to two inexperienced entrepreneurs. The sale price was one dollar.

The new owners sold key assets, driving UPI into bankruptcy in 1985. Over the next decade, it changed hands three more times -- from a Mexican media mogul who didn't speak English to a company, Infotechnology, that filed for bankruptcy. Client desertions further damaged employee morale, and The New York Times, the Chicago Tribune, and dozens of other prominent dailies canceled their contracts.

In 1991, UPI fired one-third of its employees and again sought bankruptcy protection. A judge auctioned off what was left of the wire to a group of Saudi businessmen, who paid $3.95 million. And in 1999, after several years of presiding over the wire's slide toward extinction, the Saudis brought in Arnaud de Borchgrave to rescue UPI.

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When Brill's Content interviewed de Borchgrave last July, the 74-year-old sat in his stately CEO's suite in Washington, D.C., and pointed to the photographs that line the walls. They show him clowning with King Hussein, huddling with a young Yasser Arafat, and dining with Ronald Reagan.

Born in 1926 to a Belgian count, de Borchgrave began his journalistic career at UPI in 1946 but hardly fit the mold of a Unipresser (as employees call themselves). In 1953, he defected to Newsweek, where he built a career as a swashbuckling foreign correspondent and worked for 30 years. Nevertheless, when the Saudis came calling in 1998, de Borchgrave (who was then an adviser at the Center for Strategic and International Studies) rejoined the down-and-out wire. "It was my first love," he says. "You feel very grateful to your first love." De Borchgrave, the editor in chief of Moon's Washington Times from 1985 through 1991, also felt close to News World -- so close, in fact, that some former UPI staffers feared that he was a fifth columnist. From the onset, de Borchgrave helped to set The Washington Times's conservative tone; he penned a front-page editorial in 1985 to help launch a fund-raising drive for the Nicaraguan Contras. But de Borchgrave also made the paper a staple of the political-junkie media diet.

De Borchgrave left the Times in 1991, but continued to contribute articles as an editor at large. He also spoke annually at Moon-sponsored conferences and maintained his friendship with Douglas Joo, News World's CEO, lunching with him once a month.

When de Borchgrave arrived at the wire, he says, "morale was very low. Funding was irregular....We never knew whether we could meet payroll." De Borchgrave was committed to saving the company, but the Saudis couldn't bankroll his vision. In September 1999, he persuaded them to sell.

Despite his long association with News World, de Borchgrave says, the possibility of the Unificationists' buying UPI didn't occur to him until a News World executive broached the subject. According to de Borchgrave, the board was entertaining offers from Canadian newspaper mogul Conrad Black and former CNN anchor Lou Dobbs when, over lunch at Washington's exclusive Metropolitan Club in early May 2000, Joo asked de Borchgrave whether it was too late to acquire the wire. Neither party will disclose the terms of the sale, but de Borchgrave insists that News World outbid UPI's other suitors and offered the wire its only hope for salvation.

Last July, de Borchgrave radiated optimism as he spoke of carving out a new niche for the old wire. "We cannot compete in the traditional news-agency area," he said, noting that AP -- not to mention countless websites already satisfies the demand for basic news. De Borchgrave boldly forecast that after nearly 40 years in the red, UPI would break even by the end of 2001. He would serve as the firewall between the agency and News World: "I have a contract that guarantees no interference," he said, emphasizing that righting the course of the struggling wire service would be his "last hurrah."

De Borchgrave did make encouraging changes, hiring such veteran newspeople as former Time correspondent Roland Flamini and Martin Walker, who once headed the American bureau of the left-leaning Guardian of London. He recruited young, ambitious reporters, for whom the opportunity to cover major stories often outweighed any doubts about News World. De Borchgrave also expanded technology coverage and started a terrorism beat. Although some acknowledge that they had qualms about joining News World ("Do I have reservations about the Moonies? Sure," says columnist Harlan Ullman), many say de Borchgrave allayed their fears. "I know Arnaud worked for them for a great number of years," Flamini explains. "He basically said they leave you alone, and that's what they've done so far."

Despite the confidence de Borchgrave expressed, he announced in December that he was stepping down. "We're well on our way to recovery, and I wanted to get back to what I really love, which is writing and reporting and traveling," he says. (He remains an editor at large for UPI and in mid-February landed an interview with Colombian president Andres Pastrana.) De Borchgrave says that he gave it his "best for two years" (including the time under the Saudi ownership) and denies that other factors motivated his decision. "[News World] guaranteed editorial independence by contract....There is no concern on that front whatsoever," he says. Still, de Borchgrave's resignation can be seen as a publicity setback for an organization desperately trying to regain its luster. By February 1, he had vacated his office so the wire's new leader could move in. De Borchgrave's replacement, at least for now, is News World CEO Douglas Joo, probably not a good omen to those concerned about UPI's editorial independence. Joo is not a trained journalist but a church member who leads a company that was founded to help fulfill Moon's religious vision. As News World's CEO, the 55-year-old Joo helms several of its publications, as well as a range of nonmedia Unification enterprises, such as a real-estate holding company. He also chairs The Washington Times Foundation, a nonprofit organization that sponsors conferences for policymakers and has donated more than $1 million to George H.W. Bush's presidential library. As for Joo's UPI plans, he isn't talking: He has so far refused to respond to press inquiries, and his spokesperson, Larry Moffit, says Joo speaks only to News World publications. (Moffit, in fact, recently attended a UPI staff meeting, which raised the eyebrows of some editorial employees in attendance.)

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In 1935, according to Unificationist theology, Jesus Christ asked Sun Myung Moon to save the world. In Moon's native North Korea, Communist authorities repeatedly imprisoned him for preaching. Undeterred, he founded the Holy Spirit Association for the Unification of World Christianity in 1954. Moon's acolytes regard him as the Second Messiah, but among nonbelievers, he is best known for officiating over mass wedding ceremonies: In 1982, he married 2,075 couples in New York City's Madison Square Garden.

Despite Moon's public-relations efforts, the Family Church (what Moon now calls the Christian denomination he heads) has had difficulty escaping the popular notion that it's a cult -- an organization that brainwashes impressionable youths, wrests them from their families, and forces them to work for slave wages to fuel Moon's lavish lifestyle. Church spokesmen say this is nonsense.

Over the past 40 years, Moon has added a multibillion-dollar international commercial component -- including a Korean ginseng distributor, an Alaskan fishery, and a New York City recording studio -- to broaden his spiritual realm.

A 1978 Congressional Report by the U.S. House of Representatives Subcommittee on International Organizations concluded that "Moon exercises substantial control over temporal matters. These include the transfer of funds from one organization to another, personnel changes and allocations."

Cult expert Steven Hassan says, "Moon started his media empire to gain power." Even members of Moon's church acknowledge that a part of his media mission is to spread his ideology. "Reverend Moon has clearly stated the vision of creating a network of newspapers, promoting values in media and being a media presence on every continent," says Unification spokesman Schanker. Indeed, News World owns publications around the world -- from Sekai Nippo, a Japanese daily known for its staunch anti-Communist stance, to the Uruguayan tabloid Ultimas Noticias.

Until it acquired UPI, News World's crown jewel was The Washington Times. President Ronald Reagan called it his favorite newspaper, and former President Bush traveled to Argentina in 1996 to celebrate the opening of Moon's Tiempos del Mundo. Schanker says that "there is absolute organizational separation between the Family Federation (which oversees the Family Church) and News World Communications," but at times the distinction seems blurry at best. Schanker readily acknowledges that News World CEO Joo "reports on a regular basis" to Moon. The Times extensively covers Moon's activities -- in January, for example, the paper prominently featured a Washington Times Foundation prayer luncheon headlined by attorney general designate John Ashcroft and attended by Moon. In January 1999, Moon said: "In 1982, in accordance with the will of God, I founded The Washington Times....Ever since then, this newspaper has led American public opinion as a conservative news medium showing the path that America must follow."

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Do these words apply to UPI? "People who worked at The Washington Times...told me stories about the hierarchy wanting certain slants on stories," says Ken Bazinet, a New York Daily News White House correspondent who worked at UPI for 17 years. "To think that a wire service would be owned by a company with that kind of history is really disturbing....An organization that has a clear political agenda now controls (UPI)."

That organization is also clearly committed to funding the storied wire. "At least News World has got the wherewithal to keep UPI going," news-industry analyst John Morton says. "They've shown they are willing to underwrite losing operations." But as Leo Bogart, a newspaper-industry consultant and author of the book Commercial Culture: The Media System and the Public Interest, points out: "I don't see large numbers of metropolitan newspapers of substantial size in which the lure of a low-budget wire service would outweigh the lack of credibility that is imputed to an organization associated with Reverend Moon."

Like de Borchgrave, UPI editor in chief John O'Sullivan has estimable journalistic credentials, and now his is the face the wire is presenting to the world. Besides leading the National Review, the British-born O'Sullivan edited the opinion pages of the conservative Times of London.

On a "casual Friday" in February, O'Sullivan was dressed in French cuffs and a chalk-striped suit, his only bit of Fleet Street a purple Windsor-knotted tie. O'Sullivan tells Brill's Content: "The owners are not interfering in the editorial direction, which they are happy to leave to journalists whom they have hired and in whom they've placed their confidence." O'Sullivan expresses faith in both the wire and its new owners, saying, "It was a good purchase, and I think that they saw the opportunity that with wise investment and sensible management it could be turned around, and I think they're right." When asked whether de Borchgrave's financial forecast will bear out, O'Sullivan says, "I forecast a terrific product by the end of the year."

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In one sense, News World's investments are already beginning to pay off: The wire is landing scoops, such as Richard Sale's January 17 story that describes Ariel Sharon's alleged role in Israel's transfer of U.S. intelligence to the Soviets and his January 26 piece linking Osama bin Laden to the deaths of American soldiers in Somalia. In what could be an indication of editorial independence, UPI reported last August that Moon and his wife were fined for overfishing in Alaskan waters. "UPI is continuing to put out the sort of product that earned it a reputation as a fine news organization -- fair and balanced reporting," UPI Capitol Hill reporter Ashley Baker insists.

If you can find it, that is: UPI's copy is as elusive as its new owners. The agency's biggest clients remain Bloomberg and LEXIS-NEXIS, both of which carry UPI's copy on their subscription-based services, and the Kyoto News Agency, a service that translates and redistributes content to newspapers in Japan. No major website, let alone a major domestic newspaper, regularly carries UPI's work, and many of its reporters privately doubt whether anyone reads their copy. Matt Drudge will occasionally link to a UPI story featured on the Virtual New York site, but the wire is rarely cited in contemporary news accounts other than obituaries of its former staffers.

UPI's director of marketing and sales, Jack McLean, nonetheless believes that UPI will appear in mainstream publications once again. McLean, a Harvard-educated former marine whom de Borchgrave hired last September, is courtly as he walks through the UPI newsroom, exuding enthusiasm for resurrecting what he calls one of the world's great brands. McLean promises a marketing push this month and a corporate makeover that will boost UPI's client roster. Having helped found the Greater Washington Initiative (which transformed the image of the District of Columbia from the murder capital of the nation into one of Fortune's top ten business cities), McLean faces a similar challenge with UPI. He compares UPI to a defunct Broadway theater: "When a marquee is starting to fade, you can walk by it every day and not see any change. But every day a couple of lights will go out. After a year or two it's gone, and there are homeless people and newspapers swirling around in the doorway." McLean adds, "If you want to bring back a marquee, if you want to bring back a brand, you have to do it one bulb (at a time)." O'Sullivan's success in restoring UPI's editorial strength would be one such bulb. "Ownership that will allow you to execute a plan, sometimes at considerable expense, is another bulb," McLean says, referring to News World. But when that owner is tied to a religious leader who asserts, as Reverend Moon did last December, that "we absolutely should utilize the mass media," its support could overshadow whatever its employees might accomplish.

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