(This is the text of an interview between Dick Harnett, retired United Press International San Francisco bureau manager, and Rod Beaton, retired president of UPI, conducted Sept. 27, 1995, at BeatonÕs home in Sonoma, Calif.)
BEATON: The whole idea of the book I think should be an updating of what has happened to UPI since 1957. I think it would be interesting. An awful lot happened that nobody knows about.
HARNETT: I think that's the approach, and I think that's what H.L. Stevenson had in mind. We've got "Deadline Every Minute" which covered the first 50 years.
BEATON: I can comment on anything you could think of on UPI from about 1960 on. And I have records. And I can, even if I don't have records, can get records. I have access to records. So I'm willing to do anything, try to get any information you want, anything you think would be appropriate for this kind of book.
HARNETT: You don't want do it yourself?
BEATON: No. I'll tell you, I once sat down and started to try to start a book on UPI. This was two or three years after I had left the company. I worked my butt off on an outline first, and then I got a chapter and a half, two chapters. Starting out on this project I put something together on what in the hell really did happen. It dealt with personalities and people in the latter years of UPI. I put it aside and took it out some time later when Roger Tatarian was here and read him portions of it. You know what he said? He said, "It sounds like you're trying to make excuses." You know, I read that thing carefully again and that's exactly what it sounded like. I was trying to put down excuses why UPI failed.
HARNETT: What's wrong with that? Excuses may not be the word, but explanations.
BEATON: Anyway, it was pretty bad. I'm not a book writer either and I had never done anything like that or even thought about it except this once. And I guess I was doing it really to try to get it out of my soul. Then I stuck everything in boxes and stuck them away and never looked at it since and never even thought about it since, until this subject came up. I had conversations with Steve (H.L. Stevenson) about it from time to time. But, other than that, I have got a lot of material, and I can dig out almost anything you want, and I'm willing to do that.
HARNETT: At the stage I'm at I think it has to be focused a little bit from the start. I could just interview everybody and read, but I wouldn't be able to sort it all out. Like you, I'd have boxes of stuff that didnÕt mean anything to what I was looking for. I want to at least get an outline in my mind. So far, I have decided it should be somewhat chronological. When I read a book I don't like it to jump around like a lot of movies and stories do now. That's why I said it will probably be dull, chronological may not be the best but I am checking dates of major things. I think you could be the key resource on this because you were there all those years and you were in a position to see things a lot of people, even executives in UPI, didn't see. So I thought I'd come up and spend a couple of hours with you today and get some material, then try to figure out where it is going. Then, again maybe I can get some of your resources or read the book you started and get some more input on it.I am going to do a number of interviews. I talked to Lee Keller for a couple of hours at his hotel. For reasons of continuity I decided to transcribe it and keep in loose-leaf binders so if perchance somebody comes along that is really good at this or wants to do it, or some academic who has a grant or something, I will have stuff and tapes and just give it to him. I don't have any personal goal in getting it done.
BEATON: Just a chore.
HARNETT: A busywork thing. It can be very interesting. We have people around, not too far away, like Wayne Sargent down in Monterey, and different people around, but you are the key guy.
BEATON: I feel a lot better you mentioning Sargent. I was digging through this stuff yesterday and I came across all of his . . . He put together that 1987 Downhold meeting in Detroit. Wayne was the key guy on that. Some of the songs are really hilarious.
HARNETT: A guy named Hefty sent me a few of them. He was there in Detroit. Sargent I thought was a player in the sense that he saw a lot with the company.
BEATON: He had some views on things too.
HARNETT: Are you going to give me some stuff to take with me?
BEATON: Yes, I want to find out what things you are interested in.
HARNETT: That's where I'm at.
BEATON: Trouble is, everything is a mess.
HARNETT: I would not say it will be a book of excuses, but in one way it could be because, well, we do have a good excuse for going broke.
BEATON: We ran out of money.
HARNETT: Yes, and there are all kinds of reasons why we ran out of money. According to some sources we never even had any money to begin with. That's one important aspect. Why we folded and whether, in the best days of UP, was there any real prospect of becoming the leading wire service. Wasn't it the only independent non-government service worldwide?
BEATON: Yes, unless you consider Reuters as such.
HARNETT: That's a government thing.
BEATON: We really were the only one, and I've got some stuff that's very interesting in terms of that, background material. To me it started -- the failure of United Press -- started in 1965. Because that's when Walker Stone, editor of the Scripps-Howard newspapers, went to the board and said, "We need to get rid of the UPI. We don't need it. The Scripps-Howard papers don't need it any more." He wanted to be a big mucky-muck in the Associated Press. What really happened is he got sore at us for something, I really don't know why. That's really when the company began to lose money seriously. Back then.
BEATON: Yes, and earlier than that. Bart became president, I'm trying to remember. Mims became president in '62. Bart turned the company over and it was just beginning making a little money but not much at that time. It had been losing before Bart became president, in the final year or two of Baillie. Bart took over and tightened the ship down. And he was succeeded by Mims Thomason. His administration immediately began losing money. This kept increasing. Walker Stone was disturbed by these loss figures and suggested that they fold UPI, that Scripps should get out of UPI. At that time the whole issue of the trust, the family trust of Scripps, was not a major factor at that time, so nothing came of that suggestion (by Stone that UPI should be dumped). I have to look back at my files and reflect on it. Mims was concerned, damned concerned. I'd been brought in as general business manager to replace him (Thomason) when he became president. I'd been brought in from Chicago, where I had a job. I didn't know what the hell I was doing. This was just out of the blue. I was very happy in Chicago running a division and enjoying myself immensely. We had a great gang of guys there. We just had an awful lot of fun. And all of a sudden . . . I'd just built a house and was laying the patio when I got the call, "We want you here tomorrow" you know. And then I was in New York.
HARNETT: What suburb did you live in?
BEATON: Northbrook. Fran Leary and I lived out in Northbrook. We rode the train together, arrived home drunk together many times. He, of course, had gone into New York before I did. And so . . . that issue caused Mims to think of a lot of changes. First of all, he in effect fired Tom Curran as manager in Europe and sent me to Europe, . . . although that isn't the way it was done (changing Curran's status). I went to Europe.
HARNETT: As manager?
BEATON: As vice president and manager for Europe. That was in 1965, and that's a funny story in itself. There are a couple of great letters dealing with it. The idea was the losses of UPI at the time were about a million dollars, and at least about 80 percent of it was in Europe, in our European operations. This made Mims decide something had to be done. Tom was a helluva nice guy and a good operator in many ways. But he wasn't a very tough guy, and he was kind of living out his time by then. He had been a great operator for us down in South America. Bart had originally brought him into New York from South America and made him No. 1 man under him in New York. Tom hated that. Jesus! That was just too much management, too many problems. He wanted out. He wanted back into his own division. So that's why he went to Europe. In that change he (Thomason) made Frank general business manger -- Frank Tremaine. There was a shakeup to satisfy Walker Stone of the Scripps-Howard board and get the powers that be over at Scripps off our back, showing them we were doing something. He was putting a lot in motion to see if we could get some results, and I didn't want to go to Europe. Boy, I didn't want to go to Europe. Hell, I just got through running two divisions, trying to get two divisions turned around, the Southern Division and the Central. I figured I had done my duty. He called me at an FCC hearing. I had an FCC hearing in Washington. I had been practicing for two weeks with the lawyers, to go in and be questioned by the FCC on AT&T tariffs, which were just awful for us at the time. We were very upset with AT&T. In the middle of this I get a call, an urgent call from New York and it's Thomason on the phone. He says, "Beaton, we've decided to send you to London." I said, "Forget it." He insisted, and I remember on the telephone it was: "No, I'm not going." "You are going." "No, I'm not." Back and forth. Then finally I said, "Why don't you send Tatarian or Tremaine or someone else. They never ran a division, let them run a division?" And he said, "No, the decision has been made. You're it." I said, "I'm not going." He said, "You can't do anything about it." I said, "Yes I can. I can quit." And he said, "If that's what you have to do. But you're going to London." And I'll be a sonovabitch, by the time I got home that night from that stupid hearing he had gotten to my wife. And he had really leaned all over her on what a wonderful place it is and so she was all for it by the time I got home. I got the assignment in London. But it worked out beautifully. It really did. It was a very successful four years. And we enjoyed it very much. But it was the first definitive realization I think, at least to me, that hey!, The ownership of this company has decided it is not going to subsidize us, and to leave us on a cash flow basis -- forget the P and L (profit and loss) statement, look at the cash. If they are going to have to give us cash out of their pockets they are not going to like it and we are in trouble. That's really when it hit me. They were very conscious of the flow of cash.
HARNETT: Before that, was Scripps willing?
BEATON: No, they were never willing to put up cash. They, the old man, E.W., had a philosophy of -- set us up in business and say, "It's your business, you run it, just send us the profits."
HARNETT: How did it work? Would at some point UP ask for money and they'd send a check?
BEATON: You'd ask for advances. We would go into the board meetings and tell them what our cash outlook was. We would say it looks like we are going to need a million, or two million, you know.
HARNETT: Then they'd make that credit available to you?
HARNETT: When they called you in a meeting like that, were you, did they say, "OK, Beaton, wait outside."?
BEATON: We were right there and debated it with them. Of course there wasn't anything we could do about it. We were out of cash. Someone had to pay the bills.
HARNETT: Did Roy Howard take a real strong part in UP after he left?
BEATON: Oh, yeah. He was very active. I was the business manager and went to all the board meetings. I didn't say anything. I sat there and backed up Mims and took notes and conferred with him when questions came up or when he asked for information he didn't have. He had to deal mostly with Roy, and Roy could really be a pain in the . . . you know, sit in that board meeting and chew your ass out. And he watched the nickels and dimes of UPI and was concerned about everything we did. If we fell down on a story we heard it about at board meeting.
HARNETT: Was he for UPI or against it?
BEATON: He believed in UPI totally. I don't think UPI would ever have left the Scripps family if Roy was still there. He would have fought it. He would have been very much against it. He was a Unipresser, no question about it, a mean one, but a Unipresser.
HARNETT: We've had a few of those.
BEATON: I liked Roy. He was tough little guy, but not very pleasant. You knew he liked United Press. That really helped. He believed in United Press.
HARNETT: But he didn't enter into coverage, sending people to cover a war? He didn't call you up and chew you out about things like that?
BEATON: Oh, no. He didn't interfere in the day-by-day. This is the thing I always found marvelous. The Scripps people just didn't do that. They never interfered with the business. They expressed themselves from time to time. They wouldn't give us the money we wanted for things we felt essential. They'd say, "No, we can't do it." They had a clear vision of what UPI was to be. UPI was to be a fully competitive alternative news service to the Associated Press. They wanted that there for their newspapers and for their broadcast stations. Beyond that they weren't interested in the development.
HARNETT: Were they having problems? Were they losing money too?
BEATON: Oh sure. The E.W. Scripps Company had its own problems. Some of their newspapers were losers, and it wasn't until after 1965 that I became more and more aware of that, I suppose as a result of Charles Scripps coming to London. He came over there with his kids, stayed at the Dorchester Hotel for a whole month. During that time we got very well acquainted with them, almost every day, every night together.
HARNETT: What year was that?
BEATON: Must have been 1967, 68. Charles and I would sit around and talk about the company and things. They had a family trust problem. They had to get the company profitable, various elements of it profitable. They had to in order to satisfy all the potential heirs. They had to do something. They had to take the company public. That is the decision they had made. Sooner or later they were going take the company public and establish a price for Scripps in the public market to satisfy all the heirs of the family and give them the flexibility they needed to cope with their family trust problems. So that became a major major consideration and in the 70s they worked very hard on that problem, Jack Howard and Ed Estlow, that group. They eliminated the (Pittsburg) Press. They did a lot of things to tighten up the ship and get the overall company solidly profitable and successful. In fact I was part of the committee they selected. I've got a picture of all of us here, the whole gang. We would meet once a month on the overall E.W. Scripps problems to try to find solutions. We set a goal -- we had to get an 18 percent return on equity, that was the goal.
HARNETT: You were not on the board, you were UPI manager?
BEATON: I was by then president of UP.
HARNETT: That was not an automatic post on the board was it?
BEATON: No, I was on the UPI board and United Media board. I was part of this committee assigned to get the overall concern at a certain level of profitability. We would go in and review the operations of every segment of the company including the UPI and so it was an interesting period. I digressed, I guess. I got off the track. I don't know whether any of this is meaningful.
HARNETT: Yes, it answers some questions I had in my mind, like whether Scripps-Howard, how bad were they toward UPI or how good.
BEATON: They were wonderful, they really were. I know there is justifiable criticism on Scripps. But in the sense of leaving us alone and letting us do our job and operate the business they were terrific people. Where they failed in my view -- I felt they failed -- is they were almost too nice, in the sense that didn't take enough of an interest in UPI at critical times, when they should have moved in and really helped us and given us the support we needed, financial support and also management support. I wasn't a financier, and not only that but the only bank we could do business with was Scripps. There were times we really needed some things done in the company and they weren't done. They had this very narrow focus for the UP. They had that one vision. The business was changing rapidly, moving so fast that we couldn't keep up with it. Hell's bells, we should have been the CNN. God we had a perfect leg up there. We could have just moved into that vacuum, into that spot in the most gorgeous way possible. There wasn't a way in hell we could do that as long as Jack Howard was on our board. Jack Howard represented the broadcast interests of Scripps, and they didn't want us doing that, period. you know. It was just an impossibility. So you can be accused of failing to take advantage of opportunities. Our ownership limited our opportunities sometimes. You didn't have the freedom to go at it in a very hard way.
HARNETT: In a changing outlook.
BEATON: I remember I brought it up and I thought I'd have my head chewed off. It was vehement: keep your nose out of that.
HARNETT: You brought up idea getting more heavily into broadcast news?
BEATON: You better believe it. We had UPITN when we took over that business from Fox. They had done a terrific job of establishing it. We had UPITN, UPI Newsfilm, United Press Newsfilm before ITN got involved in it. But we had that thing. If we had gone electronically, if we had gone electronically. If Scripps had given us the money to go electronic with it. . . If we could convinced them we could go electronic without affecting their broadcast interests.
HARNETT: You mean a network?
BEATON: A network, all electronic, initially not even a network, just delivered the product to any broadcast station that wanted it and gone from there. We would have created a new network and it would have been in the lead. It was a natural for us. I thought Burt Reinhart would have kittens over this thing. I thought he would drive me batty. He used to call me up at home in the middle of the night.
HARNETT: He worked for UP at the time?
BEATON: Yeah, he was head of our operating.
HARNETT: He wanted to do it?
BEATON: Oh Jesus, this guy had it all figured out, how to do it and everything that had to be done. The lawyers and Jack Howard just kept saying no.
HARNETT: How much money did you need for it?
BEATON: I forget now. It was quite a bit. It was a change of direction for UPI also. I can remember there was thinking, right in UPI at the time, what will newspaper publishers say? I mean you know what print media will say: are you going all broadcasting, radio? You're supposed to be competing against AP.
HARNETT: I think you're right. I think in UP, even on the staff, your editorial people were anti-broadcast. They all wanted to write 400, 1,000 words, didn't want to go on air for a few minutes. So we missed a great opportunity there.
BEATON: When I was in London we tried something new. I had recognized earlier that our financial service, our business wire, was not successful in the United States, and our stock market service was really not successful. We really did if for Scripps. How do you turn something like that into a profit? Well, we created Unicom. But to have made Unicom successful against Reuters you really had to do it right and we never had the resources to do it right. We brought in other people to help us who might put up the resources, because Scripps wouldn't do it, to make us really competitive.
HARNETT: Are you talking about Dow Jones?
BEATON: Yes, that type of thing. We weren't interested in competing necessarily against Dow Jones. But we were very interested in competing against Reuters' economic service. In a limited sense, we thought there was an opportunity there. We sure felt there was an opportunity to make money at it in Europe which by the time the company folded was making money.
HARNETT: UPI was making money?
BEATON: Unicom financial service in Europe. These kinds of services were what the executives in UPI were doing, trying to expand the business. Maybe that was a mistake, maybe we should have just concentrated on what we basically were, a print media news service alternative to the AP and not try to do all these other things and spend a lot of money.
HARNETT: There were some problems there, too, weren't there? I remember Tatarian told me once that your competition, the game you were playing, if you have one subscriber in a town it pays the freight and everybody else is profit, right?
BEATON: That's right.
HARNETT: AP could play that game better than you because they had more money. I don't know what could have been done about that, but something should have been done about it.
BEATON: Well, yeah, I know.
HARNETT: Somebody said you tried to do it.
BEATON: We tried to out-AP the AP with our advisory board concept. There was more, there was other thinking in the advisory board. By the time we formed those advisory boards it was very clear that Scripps was more and more insistent that we find a solution to the problem, that we had to solve our loss problem. In lieu of that we had to find, start looking for other solutions for where UPI was going, if they decided they weren't going to support us any more. That's really how the advisory board got started. Also, we came to the conclusion we had to do something about our pricing. I think people don't realize that the UPI pricing, rate situation, was really outrageous.
HARNETT: You were giving it away?
BEATON: We were giving it away and in some instances overcharging. Really, we had no rate card. It was just dishonest. That just bothered the hell out of me. I finally decided we had to do something about our rate situation. We were trying to think through how we can force this on the industry, get the industry to cooperate, and also solve another problem, looking to the future about what we were going to do if Scripps ever pulled the rug out from under us. The advisory board was to get the newspaper publishers involved directly, editors and publishers, get a small group, a group that you actually talk to on a one-on-one basis about the problem. You wouldn't be releasing all of the information about UPI and scaring them off, but at least you would have other brains involved in the business and what we could do about it. That first advisory board was a terrific group of people you know. They really were.
HARNETT: The advisory board. That came up in the 70s? They were publishers?
BEATON: Mostly publishers, and some editors. The idea was to privately be able to say: "Hey, some of you don't know the truth. Here's the truth."
HARNETT: They were friendly to UP? They wanted UPI to succeed?
BEATON: Yes, we selected them carefully. We didn't want trouble. I'll tell you this, some of the people over at Scripps were very nervous about this advisory board idea. They were very nervous about it. They were afraid we were going to get into a can of worms. So we were very careful. It was a good group. They took it seriously. They gave us a lot of advice and guidance. And I think again what finally led Charles to believe that maybe we could go public, the limited partnership.
HARNETT: That partnership, that's not really going public.
BEATON: Charles told me once he didn't mind being mule for the industry but sure as hell hated being the jackass. That's the way he sort of felt sometimes about the fact that they were subsidizing the UPI.
HARNETT: A question always in my mind about this subsidizing, did they do that through cut-rate service to Scripps-Howard papers? Did they change the rates to account for it?
BEATON: Scripps papers paid the highest rates in the industry.
HARNETT: That was part of the subsidy?
BEATON: They didn't consider it that. They paid the rate, what they would pay the AP, plus. And some of their editors yelled like hell, they fought with us on rate increases. We had trouble with them every time, but Scripps would tell them to pay it. It was a cut and dried thing. But the broadcast stations we negotiated with. There was nothing cut and dried with them.
HARNETT: This advisory board, was there a lot of criticism of the product? of the UPI news?
BEATON: No, really, they thought we were doing a pretty good job. I suppose it depends on who was sitting there and listening. The conclusions we would reach had to get by the board. They were very interested in our product. The things they mostly wanted from UPI, always emphasized, was the big story, the hard-hitting news story. I never found a great interest among the advisory board in the development of a lot of features and that sort of thing at all. The state reports, it depended on who they were. Some of the big ones didnÕt care, and little ones thought it was the most important thing we did, all of the barn-burners. Yeah, they reviewed, every time we met they reviewed the product and they had a product committee made up of editors to tell us what we did right and did wrong.
HARNETT: I think the emphases we later got on features was disproportionate. Take the L.A. Times. On Saturday the first bulldog edition was full of UPI features. Our editors come up with clips. But in the final edition that was all gone. That was just filler. Did I interrupt a thought?
BEATON: I don't remember where I was.
HARNETT: You were coming back from London. You were named president after Thomason, right? I thought he was out in the 70s?
BEATON: He was replaced in 1972. I was brought back in '69. I was ordered back, actually. It was a decision made by the board to bring me back. I came back as general manager, executive vice president and general manager. There is an interesting letter in here from the lawyers explaining there was nothing in the UPI bylaws providing for an executive vice ppresident and general manager. They had to change the bylaws.
HARNETT: Titles were created as necessary.
BEATON: I quickly learned why I was back, why they decided to bring me home. I don't know how in the heck you ever handle something like this, explain it to people. Thomason had become an alcoholic, a terrible alcoholic.
BEATON: He'd come in the morning and he'd get some things done and by noon he was gone, you know, lost. One of the things that always bothered me -- guys would go around and get to him in the afternoon to undo things that he had done in the morning.
HARNETT: Was he retired at 65, seniored out? or fired?
BEATON: He was retired, and Jack Howard did it, reluctantly because Jack really liked him. He was kept on as chairman, kept his office. It was known to the board and he was told he had to give up chief executive. He lost all his authority. We tried to work with him. He continued to come to the office. And I began working with Betty Thomason to solve the problem. She got him into a drying out facility. Mims was a helluva human person, a wonderful guy. He probably did more to try to save Merriman Smith than anyone else. He took Smitty into his home to dry him out. They did everything they could.
HARNETT: He took him into his home when they were both alcoholics?
BEATON: Yeah. One day Mims was crossing the street in front of the News building when Marie Foley came into my office and said, "God! Look at him." He was totally bombed. How he got across 42nd Street?
HARNETT: That was Marie Majeski?
BEATON: Marie Majeski, right. She came yelling at me about it. So I dropped everything. I was in the middle of my office and had papers all over the damn place. I went running after him and caught up with him. He had a private car, see, on the Greenwich, so I got aboard with him on the private car and went out there. Of course he ordered drinks, and by the time he got home he was just as oiled as when he left the office. Betty met us. I had told Marie to call up Betty and tell her meet us at the station. We drove to his home, sat in the kitchen. I said, "You know, I can't take this any more, can't have it around the office, can't put up with it anymore, and I'm going to the board and get Mims out of this company unless he stops drinking, unless I know right now that he is going to stop drinking, never comes to the office, never has another drink at the office. It's over." Then he got mad. "How could you do this to me?" We got into one of these god damned things. So I threw up my hands and said, "OK, Betty, I tried. All I want do is stop this man from killing himself." I just gave up and went to the board and said, "We can't do it, we gotta get him outta here. It's too disruptive. He's drunk all the time." ThatÕs how he finally left the company.
HARNETT: He had already been seniored into chairman?
BEATON: He had already been stripped of his authority.
HARNETT: On the alcoholism, drinking thing, all companies have this don't they? UP wasn't particularly worse than others was it?
BEATON: I didn't think so.
HARNETT: I didn't think so either. A lot of guys over-imbibed, but thinking about it, you go to Standard Oil, go in the Army, you find a certain amount of this.
BEATON: I think Mims was the only alcoholic I ever had to deal with.
HARNETT: The only place I've heard it had an impact was the deal with Reuters. I think it was Lee Keller saying Mims got drunk on the way to a meeting with Reuters and didn't go over too well.
BEATON: I don't know quite know what Lee was referring to.
HARNETT: Some meeting with people in London.
BEATON: I tell you, all of the dealings with Reuters that we had from 1965 on I was directly and always involved. I can't recall anything Mims did to embarrass us with Reuters. He came over to London, he and Al Bock. We went down to Brighton secretly. I picked him up at the airport, we drove down to Brighton. We met with, I can't think of it now, the general manager of Reuters at the time, in a room down in Brighton. To our surprise -- I had been conducting lengthy conversations with Lord Barton (spelling?) about the possibility of UP and Reuters working together in some way, or even United Press taking over the news operations of Reuters, not the economic service, which was where they made their money, but the news operations because their news operation was really nothing, see, and some of the British newspapers were complaining. P.A. was complaining. We developed great relations with Crom, Tom Curran's son-in-law who ran P.A., and so we thought we could take over the news operations of Reuters and be the news arm and let them be the economic arm. We'd get out of the economic end of it entirely.
HARNETT: P.A., what is it, Press Association? Was that a competitor to Reuters in Europe?
BEATON: No, it was the British internal news service. Reuters was the international.
HARNETT: They didn't compete with Reuters?
BEATON: No, they didn't compete with Reuters. They were the state news. They bought their international news from Reuters, and from us and from Associated Press. They were the internal service.
HARNETT: Was that a government thing?
BEATON: No, it was a cooperative. We had great relations with them and we were serving Extel, which was tethered to P.A. What we were trying to do was rationalize a way where we would serve P.A. and work with Reuters in a cooperative form and take over their news arm and become the primary newspicture arm for British newspapers. There were various ways we could work it. . . . Jesus! Mims walked into that meeting and sat down there with Bartleson (spelling?), across the table from each other. Bartleson said, "Well, Mims, what's your price on selling us UPI?" Which flung me right out of my chair. Thomason said, "Well, what I want to know is what's your price on selling us Reuters?" I mean they never did get to . . . I want to tell you, five minutes later we were out of that room. We wasted the whole damn trip.
HARNETT: They wanted to buy UP? Was the cartel thing over at that time? Were these really competing services? Was AP competing, or was it kind of like, you take America, we'll take France, like it had been before?
BEATON: No, I don't think that was a factor at that time. The thing that upset me the most in the 70s was UNESCO, the United Nation thing, Resolution 19C. Jesus, that damn thing was dangerous, I remember that. But cartelism wasn't really a factor. There were too many other sources to worry about.
HARNETT: One of the real pertinent questions is whether a company that's in there to make money or to survive on its own as UP was, really has any chance against anything like AP.
BEATON: Well, I've got some studies in here. The CIR report and other things like that, and I can remember one study done by some outside outfit, I forget who commissioned it or who it was for. They didn't think UPI could ever be successful, I mean really successful, as long as our competition was non-profit, that we were going to be at a terrible disadvantage. We had to broaden ourselves, find new sources of revenue, subsidize our position because of the very nature of competing against a non-profit and government-subsidized news services around the world.
HARNETT: My concept is that the Republicans, and Margaret Thatcher, Reagan about turning things over to private for more efficiency doesn't apply in all cases.
BEATON: Well, it was sad. You look at UPI results over the years. We were really impacted by anything AP did.
HARNETT: You were?
BEATON: Oh yeah, we were. UPI was led; AP increased their rates, newspapers would start looking around for ways to save some money and we'd get chiseled.
HARNETT: In other words, they increased rates and it would lower your rates?
BEATON: Yeah, they tried take it out of our hide. That was, again, one of the reasons for the advisory board. We tried to build up some strength in dealing with this sort of thing. Almost all the people selected to sit on the advisory board had associations with the AP too.
HARNETT: Were you really trying to sell us as a second service to them, or as a primary service?
BEATON: For small papers we were the primary service. At big newspapers we always walked in with the idea: "You can buy UPI and you don't need AP." We always took that position. We sold Murdoch, the New York News --not the News, the Post -- when we sold him the service we thought we were going to throw out the Associated Press. That was the whole basis of the deal. We went in and we said, "We want to do your complete job, and we want AP the hell out of here. We are better suited to serve you than they are and we're more your kind. We'll do a better job. You don't need AP. You;ll save all that money. Here's our rate." Murdoch bought it, but then his editors began to scream, and so he kept both.
HARNETT: We could have? In your vision of UPI as a major wire service we could have got AP out places like that if we had done some of the things you wanted to do?
BEATON: Yeah, I felt that. After all, some of the Scripps papers did very well with just UPI, and there is no reason why others couldn't. A lot of newspapers in this country at one time or another got along with just UPI. God, the thing that killed us more than anything else, and I felt this early on, was the growth of the chains, groups of papers, Gannett, Speidel, you know the various groups. That hurt. The other thing that hurt a lot more than most people realized was Fox cable television. It wasn't until 1955, was it, if not later than that when you had national television news run across this entire country. CBS News didn't get out on a national basis until late. And as you develop all these news sources, people found other news sources. It had an impact on us.
HARNETT: There was less deadline pressure on papers. It didn't really matter if they got the verdict right away. They weren't out on the street selling "extra extra," because they realized people knew about this already.
HARNETT: That, I think, maybe had something to do with newspapers being reluctant, is that what you are saying?
BEATON: Well, yeah, it is part of this changing environment in which we were trying to sell our service and market ourselves as a needed alternative, competitive news service to the Associated Press.
HARNETT: Did you ever have to deal with AP directly, in other words, did you meet with AP executives and what kind of things came up?
BEATON: Well, I used to have lunch regularly with Wes Gallagher, and Keith Fuller. We just got together and talked about the business, things that upset them and that upset us. They were always very friendly.
HARNETT: Were they out to kill UPI?
BEATON: Oh sure! They were definitely out to kill us. They hated us with a passion. We were in their way and, of course, rubbed them the wrong way constantly. We made fun of the AP constantly, their slowness and their stodginess.
HARNETT: It's true it's a dull outfit.
HARNETT: I don't know what newspapers are doing now, what editors are doing for a bright story. Lou Carr, Don Mullen, somebody was always trying to jazz up a good story whereas AP, whatever the local paper has, that is what you get.
BEATON: At least at the executive level we didn't have bad relations with the AP. Keith and I became actually quite friendly. Our wives got together and occasionally we had dinner together.
HARNETT: One of things I thought you always had problem with was that you had 200 bureaus or something like that all over the world and you might try to set up a policy in New York, but you would have to try to get Ron Wagoner to impose the policy out in San Francisco.
BEATON: That was part of the charm of UP.
HARNETT: That was part of the charm, but also costly in many ways. You had the same thing being done all over the world. If it was done the same way it seems you'd save a lot of money.
BEATON: Well, that's true. Yeah, I suppose it's true about a lot of our organization. There have been studies on that too, about or organization and how we possibly should consider changing the organization.
HARNETT: The AP, they had meetings all the time, the head guys came in from all over. They had meetings. UP had them very rarely. If you can do it by phone, do it by phone. When you left these other guys came in. They started bringing salesmen in every couple of weeks.
BEATON: I don't know much about what happened after I left. I just shut my mind.
HARNETT: You're lucky you did because it was really a shambles. But the years you're talking about are the years UPI went from really a viable competing worldwide service to a casualty.
BEATON: Yeah, right. Those years were terrible. To me it started in 1965 with Walker when he suggested that Scripps get rid of UPI. It never stopped. From then on it was constantly in our mind. It was a constant problem. Worrying about the confidence of your ownership isn't a helluva good thing either.
HARNETT: One thing I'd like to ask a little about is the paternalism. It was a very paternalistic outfit in many many ways. You took care of people. That was a plus wasn't it?
BEATON: Yes, I felt it was a plus. I felt it was very much a plus. It was a good feeling. I ran across something the other day. Klokinghammer, he was a news manager for us. He got killed in an automobile accident. The reason this came up is that his widow, who is about 75, wrote saying the UP had ""discontinued" her pay. Jim died, and 20 years later this letter came in. It was the nicest letter I ever received, saying how terribly, terribly important it had been all those years that we looked after her. Someone every year phoned her. Every week she got her check from UP, and she was able to educate her kids. They had graduated from college now and she had remarried. She said she never had to put any expense for her children on her new husband, how terribly terribly generous she thought UP had been.
HARNETT: I think it was kind of a anomaly -- I don't know if that is the right word -- but some people were fired by UPI who thought they deserved to be fired. At the same time you had a personnel thing that must have been different from other companies, a communality. You couldn't just tell somebody: "If you don't make a profit out there in the Pacific Division your out." You couldn't really do that. Did that paternalism come from Scripps-Howard or was it just the culture of UP?
BEATON: I'm afraid it was the culture of UP. I think they put up with almost anything. We were supposed to run our business, supposed to make it successful. If we didn't have that toughness, it was our fault, but it was also their fault because they could have insisted.
HARNETT: Was there kind of a franchise thing? l heard when Bartholomew was Pacific Division manager, all those years, he had kind of a slice off the top. Was that true all over?
BEATON: All division managers had division propositions. I don't know what kind of deal Bart had. He had a special deal. When he took over operation of the Pacific Division there was really no business out here. He built it, so he had a special deal with Bickel or Baillie, I don't know who. He probably did a little better than other division managers. By the time I became a division manager it didn't amount to anything.
HARNETT: l don't know if Bart or Baillie got rich on the company, but it is unlikely that many people did.
BEATON: I think Baillie did pretty well, and Bart made his money elsewhere.
BEATON: Baillie was an interesting character. Oh, Jesus! I found it dealing with these various people down through the years. This is just an aside. I always think of Bickel as the best president UPI ever had. What a shame we couldn't have had someone like him.
HARNETT: That's what LeRoy Keller says too.
BEATON: I have a couple things I could dig out.
HARNETT: He had a vision for the company?
BEATON: He had a feel for it that very few, I don't think even Baillie had -- that sense of direction the company ought to be going. He was just very very good. What a guy! Bart, of course, just believed firmly in the INS thing. There were a lot of contrary opinions on that.
HARNETT: You mean about merging the INS?
BEATON: Yeah, they had a helluva time with Jack Howard. I mean Roy Howard on that one. There was a lot of bad feeling inside of Scripps
HARNETT: They didn't want it?
BEATON: They didn't. They thought Bart had gone crazy, some of them, not all of them of course. After all it was allowed to go through. It happened. But there was a difference of opinion, and it was pretty controversial at the time in the board. Bart had a helluva time selling it.
HARNETT: The plus was that you eliminated one of the thorns in your side, but they werenÕt a major competitor. UP was much better than INS.
BEATON: Yes, the financial people in particular were against it. They said that, hell's bells, Hearst is just trying get rid of it and it was losing money, and why in the world should we do any favors for Hearst? Let 'em close it down. We will take over their business anyway. But I know what came out was good. I was the Southern Division manager when this thing happened, the heavy negotiations were going on and the actual merger occurred. I was down at Boca Raton at a Southern Newspaper Publishers meeting. Bart showed up there with Lee Keller. Lee and Toni had a great time traipsing around. My wife had a great time traipsing around. Eskew was there too. What did I do? I sat up in Bart's hotel room the whole damn convention being his secretary while he negotiated with Dick Berlin by long distance telephone. You got a definite feeling that they were anxious anxious anxious to get rid of INS.
HARNETT: Hearst was?
BEATON: Hearst was, and the other thing was that Bart was anxious anxious anxious to get long-term contracts with all the Hearst newspapers for UPI. So that came out if it for the good, long-term contracts with Hearst. They couldn't find a formula for getting it done. Lee came up with the idea to offer them 10 percent.
HARNETT: I thought it was 5 percent?
BEATON: Or five, whatever it was. At the time it was the clincher but what was wrong with that idea was that the lawyers immediately came along and whomped us in the head by taking United Features away from us.
HARNETT: Scripps-Howard lawyers?
BEATON: The Scripps-Howard lawyers. I want to tell you, that was the worst part of the INS thing. The hell with INS, the loss of United Features did more damage, and long term damage to us.
HARNETT: Were UPI people aware of that at the time?
BEATON: I don't think they were aware until after. It hit them after.
HARNETT: They got the feature service. They got Snoopy and all the columnists.
BEATON: The profits, the cash flow out of United Features was tremendous.
HARNETT: Took it away.
BEATON: I didn't really understand the damage that was done until I went to Europe. You need, when you deal with these publishers, and big chains particularly, you need to keep a few arm-twisters in your hand. One of them is features, and one of them is comic strips. We used United Features in Europe to get contracts, to sell other business. You needed all the help you could get dealing with AP. I can remember selling small newspapers in California when I was out here as a business rep. I could help them get Peanuts or something, in Southern California, the Los Angeles Times.
HARNETT: You could work with them?
BEATON: Yeah, I could go see Chandler, go see Dick Broad at the San Diego Union. I could call and say I could sign Oceanside if you just let me give them this comic strip.
HARNETT: Did you have trouble with controlling your own sales people? You tried to put in a rate card. In my early years at UPI I saw telegrams going into New York saying: "Paper two dollars a week, wire haul twenty dollars, machine four dollars a week. Everything over that is profit."
BEATON: Margin, we called it margin. (laughs).
HARNETT: Margin, but they never figured the news into the whole cost. When we lost the Los Angeles News, everybody down there took a hit.
BEATON: It was a very dumb way of pricing.
HARNETT: The same with Hawaii, the Advertiser. I suppose AP had to deal with those kinds of things too.
BEATON: Yeah, but they had a rate card. AP had a rate card, a rate formula. We had the formula. We knew what it was. The guy who was a whiz-bang at this, figuring out the AP rate card, was Wayne Sargent. He's a mathematician, and he was just really good whiz-banging, sitting down and figuring out what the AP rate would be in a given situation.
HARNETT: They undercut you anyway, didn't they? They undercut themselves. If you cut them, they'd go lower.
BEATON: They would cut rates too. But not to the degree that we played that game. We have to be honest with ourselves, we did it more than they did.
HARNETT: What is really irksome is that for the cost of one full-time reporter they could buy the worldwide services. Anybody can see that's a helluva bargain, but the publishers didn't.
BEATON: Bart was a helluva salesman on that score. He had the days when these newspapers in California were family run. They weren't part of chains. Their bottom line wasn't as important as it later became. I know. The paper my dad worked for in Stockton, old man Warden told me that Bart had convinced him the rate for the Stockton Record should be whatever he paid the Associated Press, plus 10 percent profit. By God, he paid us whatever he paid the Associated Press, plus, that was the contract, 10 percent. That was all profit.
HARNETT: Then you had guys like this guy down in San Mateo, the lawyer, J. Hart Clinton. He had a deal to pay you 1932 rates, and he wasn't going to go up.
BEATON: Yeah, I know who you mean.
HARNETT: The paper is going down anyway.
BEATON: His wife.
HARNETT: I never met her. Until he died recently he was a big fan of Romulo in the Philippines.Anyway, those are some of the things you could talk about. What about these editors conference UPI started to get into in the 1960s? You had a big one in Mexico City, one in San Francisco. Was that part of your plan to save the company?
BEATON: That was part of client relations.
HARNETT: That was a good thing, really. They paid their own way, didn't they?
BEATON: Clients would pay for the meeting. They didn't cost UPI a lot of money.
HARNETT: And the ANPA breakfast that you always had.
BEATON: The ANPA breakfast, when did that start?
HARNETT: It started in the 1960s or late 50s.
BEATON: I think it started in Bartholomew's administration. Bart started that. He had the ANPA breakfast I think. The reason I think so is that there was a big confrontation about whether we should do it or not. Roy Howard said: "All you're doing is giving them a forum to question your rates." That was his attitude about the whole thing. "You shouldn't do that." Bart had to convince Roy that no great disaster would happen, that no, the clients wouldn't do that. Jesus! They didn't, either. It was very very good. Bart was very pleased the first time. From then on he expanded them. They were a great idea. And for years we never got asked embarrassing questions. They always opened up to us.
HARNETT: After you left they made them into places where they made promises of what UPI was going to do. I remember a client saying in San Francisco, "You told us last year you were going to add staff."
BEATON: It didn't happen.
HARNETT: "You said you would increase staff and you cut it." You can't put that over. What about you personally. You've got a dog. Did you play golf? How did you get away from this problem, if you ever did?
BEATON: No, I didn't have a lot of hobbies. UP was my hobby.
HARNETT: You had children didn't you?
BEATON: Yes, I have chidren, my family.
HARNETT: That tends to get you way a little bit.
HARNETT: It is important for people to have that when in a position like you were in.
BEATON: I didn't play golf, and, Jesus, there wasn't any time to play golf. I don't think a lot of people realized how busy you were. The last few years at UPI we were awfully busy. God, we had so many balls in the air, things going on, things that we were expected to do, and not just with UPI. They had me on that service committee of the E.W. Scripps company. There were other things I was involved in.
HARNETT: All kind of exciting, challenging?
BEATON: Yeah, you were involved with this business and you just had to find the time to do it somehow.
HARNETT: The kind of people who work for a wire service, are they a little different from other people?
HARNETT: Do they get that way, or do they join UP because they are that way?
BEATON: I think we were a different breed in some respects. I've always sensed that UP people are idealistic. They may get cynical in time, and I guess most of us do, but I always felt the UPI crowd was just a different group. They certainly were a different group than the AP crowd.
HARNETT: Wayne Sargent knows a lot.
BEATON: He knows a lot. I don't know how much. It's been a long time.
HARNETT: I think before interviewing those guys it would be better to find out what we want to know about the story of the company. I love to listen to stories forever but if you are doing a project some of these stories are pertinent and some aren't.
BEATON: I have been busy. Evelyn's father died. He was a funny guy, a paranoid guy. We discovered he had seven safe deposit boxes. If no one has ever told what happened, why, how it developed, what happened to us in that buildup, in that final year and a half, that final two years that led to June 2nd in the boardroom at Cincinnati with me signing all those papers. I was the chief executive. Every goddamned document turning this company over to those guys was signed by me. ItÕs a kind of an interesting story.
HARNETT: Can I come back and get that from you?
BEATON: Not only that. I have stuff you might read.
HARNETT: That's important. I will, because the legacy, there's no legacy left, because people can't remember what was there. That's one of the reasons I want do this historical project because there was something there.