New York Times on Charter Media's Proposed Purchase of UPI

Here is a July 13, 1980, story from The New York Times on the possibility of Charter Media Company acquiring UPI. It was written by Deirdre Carmody.


Charter Media Concern is Holding Talks on Buying
Financially Troubled News Agency

The Charter Media Company, a publishing concern that is partly owned by an oil conglomerate, is looking into the possibility of acquiring United Press International, the nation's second largest news service.

While negotiations are in the earliest stages and nothing may come of them, their success would mark the largest holding of a news organization by an oil company in this country.

Fifty percent of the Charter Media Company, which was formed this spring, is owned by the Charter Company, a leading energy conglomerate. The other 50 percent is owned by Karl Eller, Charter Media's chairman and chief executive officer, who has announced that the company wants to expand into virtually all aspects of communications. Last month, Charter Media, which publishes Redbook and The Ladies' Home Journal, bought The Philadelphia Bulletin.

For weeks, Mr. Eller and Edward Estlow, president of E.W. Scripps, U.P.I.'s parent company, have been denying rumors that they were holding discussions. Last week Mr. Estlow continued to deny the reports, but Mr. Eller acknowledged that some talks were taking place.

"We have talked," Mr. Eller said. "We have not come to any conclusions. We are looking at all the options in the situation and we're interested in lots of things. We want to grow in the media business."

Denies Talks Are Slated

Mr. Estlow, on the other hand, insisted, "We are not talking and there is no meeting scheduled."

Charter Media is also negotiating to buy The Nashville Banner, according to Mr. Eller and John Jay Hooker Jr., publisher of the paper. Mr. Hooker, a lawyer and businessman who has twice run unsuccessfully for Governor of Tennessee, is said to be interested in running U.P.I. for Mr. Eller, if Charter Media succeeds in buying the news service.

"I feel that U.P.I. poses a great opportunity to do something of significance in the field of journalism, and in a country that depends on the press to monitor the Government, it would be wrong to have only one worldwide news-gathering service," Mr. Hooker said in response to a question. "U.P.I. must continue, and I'd like to have a part in its future."

It has been generally known for some time that United Press has been financially ailing and that E.W. Scripps, its primary owner for 73 years, was looking for some way to stop subsidizing it. Last fall, the agency invited a number of American publishers and broadcasters to become its partners. The offering was terminated when it met with little enthusiasm.

In publishing circles, it has long been assumed by many people that if U.P.I. was in serious trouble, American newspapers would somehow join in to save it rather than leave the country with only one major news service, The Associated Press.

Losses Projected

In 1979 United Press International had gross revenues of $78 million and after-tax losses of $3.5 million, according to company figures. Gross revenues for 1980 are projected to be $83 million, with losses of $6 million before taxes, according to Robert E. Page, vice president and general manager. Mr. Page said the service had 1,035 daily newspaper subscribers in this country, 3,313 AM and FM radio stations and 445 television stations.

For many years, the agency has offered special rates to many subscribers. It has now reorganized its pricing policies and as a result many of its rates have gone up. One news organization, which asked not to be named, projected that over the next five years, its U.P.I. rates would triple. Mr. Page said he did not know how many subscribers had been lost because of higher rates.

The Associated Press, however, keeps close tabs on this matter. On Feb. 1, that service ran an advertisement in Editor & Publisher, the weekly of the newspaper industry, stating that in the previous 12 months, 17 newspapers that subscribed to both services had dropped U.P.I. An AP spokesman said that the number of newspapers that had dropped the opposition service since Feb. 1, 1979, had now risen to 29.

Cites Gain in Papers

Mr. Page of United Press said the two news agencies had such different methods of counting the number of papers that used their services that there was no way he could comment on these numbers. He said that the agency had gained as many new subscribers as it had lost.

A spokesman said The Associated Press now had 1,298 daily newspapers and 5,614 broadcast members throughout the country. Its budget for this year is $140 million.

United Press International's labor contract with the Wire Service Guild expired in April and negotiations have continued. The principal issues of wages and job security have not been agreed upon and Guild employees have threatened to go on strike this week during the Republican National Convention. The service has offered a 4.5 percent wage increase across the board for the first year of the new contract, while the Guild is asking for 8.8 percent. The salary for an established reporter at U.P.I. is $433 a week; the comparable salary at the A.P. is $474.

United Press International has lost a number of employees through attrition over the last few years. Mr. Page said, however, that there had been no effort "to cut the staff." "We run a lean ship over here," he said. "But with our kind of numbers, we have to run a lean ship."