Paul Steinle's Missives



Here's one of the so-called "hotline" messages posted in 1988 by then-new UPI president Paul Steinle, who came in with the FNN takeover:


387m memo 3-9 to: all staff from: paul steinle re: management update 4 date: march 9, 1988
Now that we have collected more data from our management team, I want to bring you up to date on some of the factual materials we have uncovered and are addressing in developing the upi business plan. as i have reported earlier, wnw group is committed to dedicating its best efforts to devise a plan to solve upi's problems, but i want you to know about some of the financial difficulties which must be overcome if upi is to be saved. item 1: we have received no response from other parties on our offer to include them in the process of supplying the company's short term cash needs through a loan. however, a upi board meeting is scheduled for this afternoon, march 9, at 5 p.m. est, to approve a $1,000,000 loan for bridge financing. the funds are being loaned by infotechnology, inc., through wnw group inc., to upi at an annual interest rate of 11 percent. these funds are secured by upi receivables. this loan should address the company's most immediate and urgent cash requirements, mentioned in last week's message to you. item 2: to explain further the situation we face, i thought you should see as precisely as possible what the company's financial situation has been in the last several months. the financial results for 1985 and 1986 are historical, and the figures for 1987 are based on trial balances which still must be verified by our independent auditors. the 1988 numbers represent our initial estimates through february. our belief is that if any audit adjustments occur, the overall picture will be worse. the financial results show a sharply deteriorating revenue stream, but an expense line which has remained relatively stable. these facts are the conditions which forced the previous management of the company to face two alternatives prior to the arrival of the wnw group: liquidate the company or turn over the company to a new management group. it is my sincere desire to develop a business plan to proceed with turning upi around. rather than liquidating it. however, to do so and to secure financing will require fundamental changes in the way we do business. We are how face with two clear problems: (1) reviving a revenue stream that has declined sharply since the beginning of 1986, and (2) reducing expenses that have remained nearly constant during this period when the company was increasingly losing revenue. more upi 03-09-88 04:41 PCs


388m memo-2 1stadd 3-9 xxx losing revenue. as you know, we are addressing the first problem in several important ways. we have brought in an experienced turnaround management team to review the situation throughout all the key parts of the company, identify the problems and recommend solutions and sounder methods for operating our business. in the key marketing area, we are also reviewing current plans and recommending adjustments. beyond examining the internal situation in marketing and sales we are also reaching out to the marketplace for guidance. as stated earlier, chris burns, a massachusetts newspaper consultant with expertise in market research, has been polling decision makers in newspapers, radio and tv stations since feb. 29 to sample opinion. his target is 50 in-depth interviews by this Friday. tomorrow (march 10), a group of about 25 people, including members of the upi advisory boards and other key news industry management people will be in washington to meet with us and provide further direction for our plans. we have enlisted the help of dr. christine urban, another well-known newspaper marketing consultant, to lead the meeting and to make certain that we collect all the relevant advice can obtain from these opinion leaders. in addition, chris burns has teamed up with dr. john morse, the director for fnn, to devise a brief but much wider spectrum survey that started Tuesday (3-7) and is aimed to reach 1,000 additional decision makers by the end of this week. through this research we hope to receive quantitative data to cross confirm findings of the other studies. internally, our business plan will also draw heavily on the survey we have conducted among bureau chiefs, marketing personnel and other unipressers. with these data, we expect to construct a solid foundation on which we can develop our marketing thrust. and, as time passes, we expect to assemble more refined data to further focus our turnaround effort. I also want to take this opportunity to invite you to write or call me, or pass along any additional advice that you have that will contribute to redirecting this company. you are the experts on upi and the management team is already benefiting from the feedback we have received thus far. the second problem -- reducing expenses -- is nore sensitive, and more difficult. a review of the company's expense profile points to the inevitable need to reduce expenses. unfortunately, this may mean reducing and/or redeploying staff, instituting cutbacks and other reductions. these decisions will be based on information that is only now coming together in the business plan. we must reorganize the company, concentrate on the important resources we can preserve, and push forward supported by more targeted-marketing plans. a clearer sense of purpose, and sufficient financing to realize those plans. that is our reason for being here: to stabilize this situation and rebuild upi for the future. we are dedicated to that task. fortunately, we have a loyal base of dedicated reporters, photographers, middle-level managers, technicians and administrative staff to achieve this task within our company, both here in the united states and overseas. based on the feedback we have received in our research thus far, I am becoming satisfied that we also enjoy the benefit of a marketplace that is willing to support the kind of quality products upi is capable of delivering. as a result, I believe a turnaround plan is a goal worth pursuing. but, crafting a sound business plan and convincing investors that saving upi is feasible, will be a difficult process at best. item 3: the previous managemet made a decision to mail paychecks to all upi employees. we have reversed that decision. beginning tomorrow (3/10), we will once again air-freight checks to the bureaus for all employees who do not have direct deposit. the air-freighted checks will be available Friday. p.s. based on the "coverage" that last week's confidential message to employees received -- in the washington post, the ap and editor & publisher -- I am faced with the ilemma that whatever I say to you is likely to wind up in print. seeing these memos in print is a problem because I am trying to inform you about actions that are being undertaken before all our plans are complete. when this partial information appears in print, our creditors and our clients get worried. it is appropriate for me to answer your questions about these messages, but when I get a call from a reporter about them I feels as if parties with no concern for our interests and no understanding of our internal situation are eavesdropping on our private conversation. while I know there is a certain inevitability about this kind of leakage and a certain level of appropriate cynicism about any further attempts to turn around upi, I hope you appreciate the problems for us that this leakage creates outside of our company. enough said on that subject. we've got work to do. pms upi 03-09-88 04:50 PCs