'UPI Has Strong Latin Clientele'

Here's a story by George Garneau from the Nov. 26, 1988 edition of Editor & Publisher:


United Press International has fared a lot better south of the border than on its home turf, according to UPI and industry executives.

While U.S. newspapers have to a large extent abandoned UPI, leaving broadcasters as its main revenue source, subscribers in Central and South America remain fiercely loyal to the U.S. news agency that broke a European monopoly in 1916 and became the region's pre-eminent international news agency for most of this century.

UPI's dominance has slipped some, industry executives say, but the privately-owned news service remains among the leading news suppliers to Latin America -- despite staff cuts, management changes, the sale of its non-U.S. photo operations to rival Reuters, and growing competition from cooperatives such as The Associated Press and government-supported agencies such as Agence France-Presse of France and EFE of Spain.

"They still make money there and they always have," said Gary Neeleman, a Los Angeles Times Syndicate marketing executive and veteran of 27 years with UPI, including a stint as international vice president and Brazil correspondent. "Most of the newspapers there are family-owned and have been for years," Neeleman said.

"There's hardly one that hasn't had a traditional relationship, very personalized, with past leadership of UPI."

Neeleman said UPI's Latin American clients "are not under the illusion that it's the same UPI, but they still . . . support them. Recent cuts in the number of people covering the news eventually may have an impact, but in the minds of most editors, psychologically, UPI is still the best."

Alberto Schazin, UPI vice president for South America and a 30-year Unipresser, said, "On the whole UPI has more clients in Latin America than it did 10 years ago."

He said "all the main Latin American newspapers" are UPI clients, and in some cities all the papers are, and added that Brazilian subscribers to the Portuguese service nearly doubled in 10 years, with growth in Chile and Peru also strong.

AP, according to Schazin, has fewer clients and "is not a competitor in Latin America for us."

Competitors at AP and other agencies dispute UPI's leadership, but even rivals admit candidly that UPI dominated in the region until the 1970s, when it lost some clients and prestige.

Larry Heinzerling, AP deputy director of world services, said AP's Latina Press Associada (LPA) clients account for 85 percent of total daily circulation in the region, more if papers are counted that get AP through national news agencies. He said growth has been static for about five years because there is not much room for expansion.

Latin American clients have remained loyal despite UPI years of financial losses and managerial woes. The sale of its money-losing world photo service to raise cash in 1985 reduced revenue from Latin America and killed its ability to sell news and photos as a package.

Nevertheless, "no major cancellations" were attributed to the sale of the non-U.S. picture service to Reuters.

One or two large papers canceled service in protest after Mexican publisher Mario Vazquez Rana bought UPI from bankruptcy in 1986, but one, El Tiempo in Bogota, has resumed service.

UPI claims "about 500" clients -- including some 300 newspapers -- plus more total news outlets when individual papers and broadcasters are counted in groups, according to Pieter VanBennekom, UPI international vice president, who said international business has "held steady."

UPI also has sold or scaled back ventures it operated in the region with other companies in television, stock quotations and comics.

VanBennekom and others attributed client loyalty to a special relationship that began when UPI entered Latin America in 1916 with a deal with La Nacion of Buenos Aires. AP had refused to break its agreement with the European monopoly allotted to the French agency Havas (AFP's predecessor). UPI formed a regional service with La Nacion, which later dumped UPI for AP, but in 1919 UPI signed La Nacion's rival, La Prensa, beginning a long and lucrative relationship that symbolized UPI's closeness to clients.

When dictator Juan Peron forced the closure of La Prensa in 1951, UPI refused service until Alberto Gainza Paz regained control in 1956 of the paper founded by his grandfather.

UPI for years fought against news cartels and for competition and the free flow of news.

"People know that UPI was more than a wire service. UPI is a family to them," said VanBennekom, a Dutchman who has worked in Mexico City. "We have done special things for clients and we continue to do special things. It's a combination of history and the level of service we give."