1981 Memo from Don Brydon on State of UPI



Here's a Jan. 8, 1981, memo from Don Brydon to UPI executives concerning the status of the company heading into the new year:


DIVISION MANAGERS
GENERAL EXECUTIVES
REGIONAL EXECUTIVES

Ladies and Gentlemen:

We don't have the final income figures for 1980 as yet, but the revenue for the first 11 months was an even 9 percent better than the totals for the same period in 1979.

Chris Tortosa reports that we processed 71 contracts and modifications in November and the pace remained high in December. In November, we received 14 pieces of new business worth $2,750 per week, plus an additional $2,076 per week in NPP-BPP rate increases. Richard Boggs was the clear winner for the month with 13 transactions resulting in an increase in income of $1,485 per week.

That's the good news. The bad news is that we had a disturbing number of cancellations on the books before the January 4 assessment was announced. Needless to say, that figure has taken a sudden upward leap and the cancellation problem is becoming very serious, indeed. We need to settle these cancellations at an early date if we are to meet our 1981 income budget.

-0-

The following was reported by the Southern Newspaper Publishers Association:

Twelve afternoon daily newspapers have converted to morning publication schedules so far in 1980, and most newspaper analysts see the changes as a trend that is likely to continue.

In 1979, a total of 13 dailies converted from afternoon to morning publication. No morning newspaper has converted to an afternoon schedule. Four afternoon newspapers have been lost this year in consolidations with morning editions.

Between 1960 and 1979, the number of morning newspapers increased from 312 to 382, and their circulation rose from 24 million to 28.6 million.

"This is a trend that will continue," says Bruce Thorp, a newspaper analyst for John Muir & Co. "It looks like last year was not just a fluke. Next year, we may see some larger papers doing the same thing."

The consolidation of morning and evening newspapers by nine publishers so far this year has also drawn the attention of newspaper industry observers. they note that in four of the mergers -- Salem, Ore.; Monroe, La.; Wichita, Kan.; and Allentown, Pa. -- no afternoon edition survived.

In Salem, Ore., a new morning-only paper was born July 1 when the even Capital Journal was folded into the morning Oregon Statesman. The new paper was named the Statesman-Journal. Total circulation now exceeds what it had been when the papers were separate.

In Monroe, La., the evening News-Star and the morning World were consolidated August 4 into a paper named the News-Star-World. There was a slight dip in circulation following the merger, the paper says, but the circulation is now beginning to climb back.

The morning Wichita Eagle-Beacon resulted from the October 1 merger of the morning Wichita Eagle and the even Wichita Beacon.

The Allentown Evening Chronicle and the Morning Call were merged June 27. The name Morning Call was retained.

the other consolidations resulted in "all day" newspapers -- generally defined as those with both morning and evening home-delivered editions.

The largest such merger involved the New Orleans, La., States-Item and Times-Picayune. Since June 2, the front page has carried the nameplates of both newspapers. The paper includes features from both papers, including, for example, two crossword puzzles in each edition.

Other all-day combinations were created this year in Topeka, Kan.; Kingsport, Tenn.; and Uniontown, Pa.

-0-

One encouraging sign is the number of reports I see of radio stations which had been operating without a wire service signing UPI contracts. It's not an overwhelming number, but it is happening in all parts of the country. It is a welcome reversal of the trend we have been observing in recent years.

And speaking of broadcast sales, we are starting to edge ahead again. In 1976, we served 3,249 radio stations. In 1980, it was 3,302. We served 374 television stations four years ago, and the total now is 429. We had Unifax service at 89 TV stations in 1976, and we now have 168. Audio has shown a slight gain over the same four-year period, from 724 to 744. The cable newswire has shown the biggest gain, from 257 in 1976 to 483 in 1980 (not counting 125 Newstime subscribers).

-0-

Jim East has seen the correspondence between the Mutual Radio Network and one of its affiliates. It concerned the "removal fee" of the Mutual ROSAT if the station dropped the network at any time during the first five years of the agreement.

The "removal fee" is $5,000 during the first year, $4,000 during the second year, $3,000 during the third year, $2,000 during the fourth year, and $1,000 during the fifth year or thereafter.

Dan Riker has combined station unhappiness with this Mutual penalty provision and UPI's $100 per month rebate program for the Harris earth station to sign some new Audio business.

Go thou and do likewise.

-0-

This is to advise you that we do not provide any service free to systems vendors for customer education, system testing or product planning.

Five or six years ago when front end editing systems were new and everyone was more or less stumbling around in the dark, we did put some UPI circuits into some of the vendors on a cost-plus basis. We figured the IXC cost and added $20 or $25 a week. Most were put in on an open basis.

If a vendor needs one or more of our wires to test his system, we will continue to cooperate with them. But let's not spend our money so they can sell a system to a newspaper for a million dollars. They should be willing to pay something to get the signal into their plant, at least enough to cover our costs plus a few dollars for the handling. And put it on a firm basis with a letter agreement, specifying when it starts, when it stops, and how much the vendor will pay.

-0-

Contrary to earlier reports, Ian Westergren, vice-president and manager of the Metropolitan Division (New York and New Jersey), will not make his headquarters in New York City. For the time being, he will continue to operate out of Albany and all mail for Westergren should be addressed there.

Westergren will be in New York City frequently and eventually will make the move to the Big Apple. But for the present, he will be ably represented on 42nd Street by Mike Hughes.

-0-

Rick Ross has sent the following to the Central Division regional executives:

Per new instructions from New York, it is no longer necessary to complete a separate "Dataprobe Selector Code Form" when transmitting new DataNews business. Simply place "Attention: John Lurry/NX Communications Center" one line below the date at the top of our OLCO ordering service installed. The list the selector codes to be inserted in the customer's selector under the remarks section of the OLCO.

In order to make sure CA properly records the services being delivered to the customer via DataNews, you should also list the UPI product code for each service on the "List Services, . . ." line of the yellow transmittal form. The product codes are those listed in the glossary printed on the reverse of the transmittal form.

-0-

Please note that there has been a change in the regional executive assignments in New England as a result of the arrival of Bill Hoop.

Ken Braddick, division manager in Boston, says Hoop will be responsible for all marketing activities in Connecticut, Rhode Island and Maine. Rob Stoddard, who for the past year has concentrated on broadcasting throughout New England, henceforth will be responsible for all services in Massachusetts, Vermont and New Hampshire. Both will continue to be based in Boston.

-0-

Here are some important words of advice from Rod Beaton about the letters we have received recently from clients as a result of the assessment:

I think it's important that they be responded to in a thoughtful, careful way and that we have some kind of a double-check on whether our fellows in fact have made contact on each one.

Often, the best letter can be written locally--opening with a simple, "Rod Beaton has asked me to respond to you, etc."

Please confirm that every single cancellation letter is being moved on as quickly as possible. Nothing is more important than fast action upon receipt of a cancellation, before the idea of terminating UPI becomes fixed in the client's mind or before he signs with AP.

-0-

In a recent memo on the subject of collections, Joe Frigenti made a significant observation. He said we seem to have improved collections on current accounts, but we are falling behind with clients owing for 90 days or more.

Frigenti said at the beginning of 1980, accounts owing for 90 days or more represented 18 percent our of total accounts receivable. At the end of the year, they represented over 30 percent.

And, as Frigenti reminds one and all, "the longer a point owes money, the less likely we are to get any of it -- to say nothing of getting it all.'

-0-

As 1980 dragged to an end, I noted too many cases of senior marketing executives of this company losing their temper in exchanges with other senior executives, both on the telephone and in writing.

Let's all make a New Year's resolution to use our energy fighting with the Associated Press, not our colleagues. If you write a hot letter, don't mail it until you have read it over the next day. Chances are it will never be dropped in the mailbox. If you feel inclined to call someone on the phone and tell him what you really think of him (or her), make the call tomorrow. There are few phone calls which must be made instantly (and none of that type).

Perhaps it was just end-of-the-year jitters. Whatever, let's have no more of it.

-0-

We are under increasing pressure to provide more quotations from the various options markets on our Dataspeed Unistox services. A letter from Bob Woodsum to the business editor of a client newspaper explains why it is a problem for us, and why we will never be able to carry everything:

The options exchanges are going to trade every contract the law will allow them to write and this has shot up the volume of datahandling for these tables tremendously.

A company's common stock requires one newspaper line to report its daily activity. Options on that company's common stock can require up to 15 lines. This situation has gotten to the point where some editors are beginning to consider whether they can devote the white space needed for these tables. Even the Wall Street Journal is seeking ways to cut it down.

Both wire services have ongoing dialogues with the options exchanges to try to find some feasible reporting method that newspapers can handle. The NASD solved this problem a long time ago for the 40,000 stocks traded over-the-counter by limiting the national newspaper list to about 1500 issues. We'd like to see the options exchanges take a similar industry wide action.

Meanwhile, the computer space we have available to process the options market has been overwhelmed. To cope with this we are gearing up a third computer to give us the required processing capacity. As soon as that gets on line we'll feed in the additional options and suddenly you'll have to commit more white space.

-0-

When sports editor Milton Richman went to New Orleans to cover the recent Duran-Leonard fight, he discovered the hotel charged him for five nights instead of the correct four nights.

Milt, who has never been known to throw money -- either his own or the company's -- protested. The hotel agreed to credit Richman's bill for one night's lodging, $68.79. Instead, the computer credited his bill for $6,879.00.

"I protested again," Richman said. "I didn't want so much money. It would spoil me. But I told them they had lovely computers."

Best regards,


-30-