'Bids Fly Fast and Furious for UPI'

Here's a story from the Dec. 18, 1999, edition of Editor & Publisher:


United Press International (UPI) is struggling to control its internal personnel turmoil as it sorts through six potential suitors for the floundering wire service.

Grey E. Burkhart, publisher of UPI, confirmed for the first time reports that Canadian press lord Conrad Black and former CNN financial anchor Lou Dobbs were among the six media bidders for the news wire.

"We have a number of suitors," Burkhart said. "Dobbs and Black are among them. We are entering negotiations with various media organizations."

Gannett Co., Inc., also is one of those suitors, according to newspaper sources. The billion-dollar chain is reportedly anxious to add the still-prestigious UPI logo to its growing news empire.

"We not only have no comment, we don't know what you are talking about," said Tara Connell, a Gannett spokeswoman.

Meanwhile, UPI CEO Arnaud de Borchgrave was scheduled to fly to Toronto for meetings with Black's financial representatives last week. Black's bottom-line analysts already have visited UPI's Washington headquarters.

Corporation sources disclosed that some firms want to purchase UPI outright while others inquired about forming a media partnership, but it is unclear which is which.

The negotiations began in earnest after Burkhart told an October meeting of UPI staffers to dust off their resumes in case the wire service was forced to fold at the end of the year.

But last month, de Borchgrave received a pledge from the wire's six Saudi Arabian owners -- ARA Group International of Riyadh -- to keep the wire running until they found a buyer, calming some staff nerves.

The Saudi group has lost $140 million since 1992 -- when it paid $3.9 million to buy the wire out of bankruptcy court, according to management sources.

These sources say previous efforts to sell UPI have been hurt by internecine corporate warfare among the Saudi owners that raged well before de Borchgrave's stewardship of UPI -- which began last Jan. 4.

Those disagreements were so severe that earlier this year Riyadh did not send $18 million in cash that the wire service had budgeted for. At one point, the cash crunch became so severe that UPI switched two consecutive biweekly payrolls to paper checks from direct deposits to gain an extra 24 hours of economic breathing room.

UPI believed the Saudi disputes might end when Sheik Walid al-Ibrahim, whose sister is married to King Fahd, resigned as chairman of ARA Group International. But sources say that al-Ibrahim is now back in the corporate scene, which could complicate the sale of the wire service.

The Saudi infighting mirrors the turmoil at the wire's Washington headquarters that is being attributed, in part, to the financial crisis.

Dave Rosso, the longtime copy chief of UPI, resigned Oct. 29, after several disagreements with editors. One week later, Rosso asked White House correspondent Jennifer Brooks to file his goodbye note -- a Unipresser tradition for departees -- on the service's internal e-mail system, ripping the wire's top management.

Rosso wrote that UPI bragged about its army of stringers but made them wait "far too long" for their paychecks. At meetings called by managers, he wrote, they "mention the payment problem, smile, shrug, and say, 'oh well,' and go to the next item on the agenda, knowing management will be paid -- every payday."

UPI officials said that their stringers recently received their October checks and attributed the chronic late payments to the slow cash flow emanating from the Saudis.

Rosso concluded his farewell with a bang: "This group in Washington that describes itself as the new UPI is perverting journalism. You are on the front lines to stamp it out. Don't make it easy for them."

He told E&P that he was upset because he oversaw the day-to-day operation and had to listen to constant pleas for money. "Some of them needed their fees to pay their rent," Rosso said. "I also was upset by a new policy of picking news off the Internet and not always attributing it."

Rosso subsequently apologized and asked UPI Managing Editor Tobin Beck to help him get his job back, but was told by Susan Older, UPI editor in chief, that his resignation would not be rescinded.

"UPI changed, and David still wanted to do things the old way," said de Borchgrave, who said Rosso was a respected journalist.

Shortly afterwards, White House correspondent Brooks was fired after she left her White House office, rushed into the D.C. newsroom and got into a heated argument with a staff reporter and one of the editors, according to sources.

"She thought she had been fired because she had put Rosso's nasty goodbye on the internal message system," said a newsroom source. "What happened was that we took away her internal filing privileges until we could investigate."

Still she wound up fired, a departure that apparently angered Helen Thomas, UPI's White House correspondent and its most visible symbol of its once-powerful presence on the media scene.

"Jennifer Brooks was a very good reporter, very alert and a very good writer," said Thomas. "We are going to miss her. Wherever she goes, she will do well. I don't do the hiring and firing. I wish I did."

Brooks declined to comment.

Older confirmed that she refused to hire back Rosso, but declined to explain the firing of Brooks. "That is an internal matter," she said. "We don't discuss internal matters publicly."

Last week, Claude Salhani, director of UPI Newspictures, announced he was resigning to become chief of the Paris bureau of Sygma, the international news photo agency. "UPI photos are now in the black," said Salhani. "We've cut down expenses, and we've increased our clients. I am a French citizen. It's like going back home for me." Questioned about whether he would have left if UPI's financial future had been brighter, Salhani answered, "Would I have resigned if UPI had been more solvent? That is hard to judge."

Terry Schmitt, a San Francisco-based photo correspondent, will become interim photo chief this week when Salhani formally leaves.

John Walston, former editorial director of UPI, and Paul Heigl, who had preceded de Borchgrave as interim CEO, also have resigned.