Robert Page Interview - Part II



(This is Part II of a Sept. 13, 1996, interview by Richard Harnett with former UPI executive Robert Page, a former executive at United Press International.)

---

Harnett: Were you in Tokyo?

Page: I was in Hong Kong, vice president in Hong Kong 72-3-4. And our service grew. We fired a lot of people we didn't need. We were making money. We had a profit in the Asia division because we had better service, and we had a better communications system. We could get to anyplace that somebody wanted to buy our service. The only place we couldn't get to was India. We had to mail stuff there. If an Indian publisher had satellite we could overhead to him, but basically India was mail.

Harnett: I'm glad to hear you say we had better service.

Page: We had infinitely better service.

Harnett: That was before or after (Earnest) Hoberecht?

Page: It was after Hoberecht. The succession was, Earnie was a long-time guy out there and when Mims fired Earnie, he was succeeded by Don Brydon. Then I succeeded Brydon. I went out with marching orders from Beaton to gut the expenses at the place. In a bureau like Manila, Dick, we had 22 people there, we had 33 in Saigon. We needed 33 in Saigon, we needed about five in Manila.

Harnett: The first time I remember ever seeing you, you came through our bureau. Somebody said, "This guy Page is coming through, everybody look busy." The word was out that you were the hatchet man.

I can ask you another question about that, which you might have a response to. How did we figure the cost of news? You say we were making profit in Asia, but how did you figure? You were getting the news free from Washington? I remember when Alaska had an earthquake. We used to open a bureau there, close it, open it, close it, no clients. We thought maybe if we had one client, but didn't get him, close the bureau. Two weeks before the great earthquake they closed the bureau. Then they had this big earthquake. I can remember talking to the guy who worked for UP but had been laid off a couple of weeks earlier and was then trying to make a living stringing for the New York Times, whatever. He said, "Well, I'll give you a call if I get time, but you guys fired me." I know in covering a war like Vietnam they can't say we gotta get revenue out of Vietnam to cover this war. How did it work?

Page: The way the accounting system worked, you talked about direct expenses and direct income, What it costs, and direct income was what we got from clients. Then you had the below-the-line overhead charges. For example, on a direct expense basis UPI Asia was profitable. Then when you add the overhead, Asia's contribution for expenses in the domestic operation, then, you know, we weren't making money. But if you took the income in Asia versus the expense in Asia we were profitable. We were not a drain on the company out there. We were sending money, we paid our own way, were sending money to New York.

Harnett: How do they figure that?

Page: The overheads were some formula that Al Bock had. You know Bock would determine on our worldwide basis what percentage of expenses Asia had to cover, what expenses Latin America, what expenses Europe, domestic. So, for example, all domestic news we were bringing in for our Asian clients we were paying for on below-the-line overhead expense basis. Thatís how it worked.. But when I went out there we were losing money above the line. Our biggest client, people who paid us more than anybody else in the world, was Mainichi. We were getting $50,000 a month out of Mainichi. That was $600,00 a year. They loved the UPI.

Harnett: Did they hate Hoberecht?

Page: Well, Hoberecht had a horrible reputation. He was a very bright guy, but he was the ultimate "ugly American." And he'd write those silly goddamn novels out there. James Michener wrote that piece. And the comment of Wee Kim Wee, who became president of Singapore. He called him Earnest Notsobright. UPI service in Europe was very good and Latin America was good, a lotta money above the line. The problem was we didn't get enough money from our basic domestic clientele, the larger newspapers. The Sun Times was paying AP 12 [thousand] and us 5. The New York Times was paying AP 25 UPI 10. If you had taken the top 20 newspapers in the United States and you said here's the AP and here's UPI, that was the gap. When you got down in newspapers of 50,000, 60,000 circulation, rates begin to even up, and when you are serving the broadcast side they were really even.

Harnett: Back in the 50s when the L.A. News quit us, we were told "big downhold, lost big client." They (the News) were paying the way for everybody in L.A. And the Advertiser in Honolulu was paying the freight for everybody out there.

Page: It was a great tragedy.

Harnett: You were the fair haired boy under Beaton. Did you ever think of running the company?

Page: I always had that in mind. Rod basically told me. You know there were a lot of opportunities to leave UPI before 1980 but I recognized that I was on the track, and I thought I'd get there, and Rod said I'd get there. But the problem was, Dick, in 1978 Scripps-Howard decided to try this limited partnership venture.

Harnett: Was that a Scripps-Howard idea?

Page: Yes, this was Scripps-Howard. The scheme came out of the law office of Baker and Hostetler in Cleveland. It would be a limited partnership, and here is how it would work. Scripps-Howard or UPI would own 10 percent of the company and be the managing partner. Then we were to find 45 limited partners who would each own 2 percent of the equity of the company. That would be the 90 percent. They are the limited partners. The general partner would control all the decisions and call the shots. The only way the limited partners could call decision would be if they got agreement with 45 other partners. So, Rod and I -- Rod was president, I was general manager -- our role was with Larry Leser and Ed Estlow. Ed was the president of Scripps-Howard at the time and Larry was like the general manager. The four of us were to go out and sign up these 45 other partners. We had meetings all over the United States in 1979, and of course the big issue was are we going to invite any of our major foreign customers to be limited partners. The answer was no. Mainichi, for example, wasn't going to be invited to the party. I can remember a conversation I had with Dick Johnston who was at that time president of the Houston Chronicle. The Chronicle was not then owned by Hearst. It was still an independent newspaper. I went to Johnston and said, "We're asking for $350,000 to buy into a partnership." So we were going to get 45 times 350,000 dollars. That was the price as I recall. Johnston said to me, "It's not the money. I could write out the check today," he said it's the matter of control, and he said, "You know, Bob, if I can't get along with my other 44 partners, how am I going to influence you?" He said it was not the money. Dick went across the town to the Houston Post owned by Oleta Culp Hobby and told Mrs. Hobby to pony up and get in the deal. I mean, he (Johnston) did it. He was willing to do it. We got Dow Jones, much to my surprise. But the point was that at the end of 1979. I don't remember all the ones we had.

Harnett: I think you had the L.A. Times.

Page: I think the L.A. Times was in. In fact, that's right. Don Parris, who was on the Scripps-Howard board and president of Scripps Howard Broadcasting, Parris and I flew to L.A. and made that presentation, and Chandler sat in on the meeting. But of the 45, we got maybe 20, needed 45. I donít remember exactly. But by January 1, 1980, that was the deadline, we didn't have the money. We didn't have the partners.

Harnett: In those deals did Knight-Ridder, some of the big ones, say absolutely no?

Page: Yes, some of them said absolutely no.

Harnett: What was their motivation? Did they want UPI to die?

Page: Of course they would never describe it to you that way. They were just, I think a lot of them didn't want to get in bed with Scripps, didn't have a lot of respect for Scripps-Howard, frankly, didn't have a lot of respect for the kind of newspapers they ran, or for the company. And they probably felt that, you know, they already had the AP. They were already owner of the AP in theory, by their membership. And I think Knight-Ridder, Al Chapman was president. He turned us down. The New York Times turned us down. I think Kay Graham (The Washington Post) was in. I think the Chicago Tribune was in. Rod may have the whole file. Marshall Field ran the Sun Times at the time. The Boston Globe was willing to do it, and I think Bill Taylor said yes. Some of the smaller guys said no around the country, like Bob Brown of Columbus. Indiana was willing to come in the deal. I remember Bob in particular. Knight-Ridder was no. Helen Copley (San Diego Union) said yes. But we only got 20 or 25. We needed 45. And so the deal collapsed. We had put a drop dead date to get this done, by December 31, 1979. And Scripps-Howard called the whole thing off, the offering memorandum. It was at that point I had to look at myself and say, "You know, if you stick around maybe you will be president." But I don't think this company is going to last and I gotta look after myself. That was when I decided I was going to leave. Rod begged me not to leave. I said, "Rod, I love you like a godfather, but these people out of Cincinnati aren't going to keep us around much longer." I said they are determined to sell the company or give it away to somebody. And of course my regret, looking back on it, if I had known about leveraged buyouts, which I later found out about when I got to Chicago, I would have put a group together. I said to Rod many times over that if they were going to give it away, which they did to Geissler and Ruhe, they should have given it to you and me. We wouldn't have screwed it up. I mean, we loved the company. They could have given it to all of us.

Harnett: They could have made it one of these deals like United Airlines.

Page: Owned by employees on all levels.

Harnett: Employees would have given up some wages to keep it.

Page: Every one of us would have done it.

Harnett: You dealt with AP a lot. Were they out to kill UPI? Everybody I talk to says yes.

Page: Yeah, they were. But you know, I competed against the AP for 20 years I guess, for 17 on the business side, on news side for 3 years. But I never felt, I never considered them infallible. I thought I could beat 'em. I thought I was as good as any guy they had. And we could do very well. The AP management was out to kill UPI. I don't think the AP board of directors was. I thought they felt there was value in having a competitive news service. The AP did not do the UPI in. The top newspapers did us in. Because of the revenue gap, they had revenue we didn't have. There's an analogy to this in the newspaper world, in San Antonio. Rupert Murdoch came in with the afternoon News. Hearst had the afternoon Light. At one point the Light, Hearst, was stronger, with the most circulation and most revenue. Had Hearst driven his rates up they would have forced the advertisers in San Antonio to quit advertising in the News, the afternoon News. They didn't, and Murdoch was able to keep the afternoon News alive. As Rupert's morning paper grew, suddenly Hearst woke up and they were no longer the strongest guy in town. When you're the top guy you have a clear advantage. If you raise your rates there's a perception among your client base, whether you are an advertiser or a client of a news service, that you have got to have the big guy because you can't afford to give him up. He's too good. And that's what happened to UPI. In San Antonio had Hearst raised those advertising rates he would have forced Murdoch to abandon the News and shut it down. And when it was over, Murdoch was in charge of San Antonio. He controlled the market. The AP might have been out to kill UPI, the management. But there were also some things. You know, Dick, I don't want to be quoted on it, but I used to sit in New York and in London and Hong Kong, and I would hear about these meetings between UPI and AP executives. The problem was, I think, that our guys talked too much. You know, the AP guys went back to Rockefeller Center and laughed their asses off.

Harnett: They had more structure, more military type structure.

Page: Yes, they had much more disciplined organization and there wasn't anything. The AP guys that I knew, Wes Gallagher was one and the guy who succeeded him, I sure wouldn't show those bastards anything.

Harnett: One more thing I want to get at. Management of UPI operations was handled in New York. My experience was all in San Francisco. How did they get Ron Wagoner out here to do what they wanted? On budgeting for instance? Orders from New York could be ignored if the local division manager wanted to ignore them. When they tried to centralize it, to get some control over things, it broke down. For example, the downhold thing. They'd have a downhold, and what it meant was the guys would sit in the office and read, and when the downhold was over they sent in all their expenses. Meanwhile they'd lose the clients. I wonder how a big company, all over the world, can control that?

Page: When I came back from Hong Kong, my first job in New York, I was superintendent of bureaus, and that's the first time we had a superintendent of bureaus since L.B. Mickel. I laughed. I said, "What do you want me to do, Rod?" He said, "I want you to control expenses." I didn't have anything to do with the sales side at that time. I had that job for about a year, then I became general manager of the company. It was all part of this plan. You know, we used to do budgets for the bureaus, Dick, and we would demand, we weren't talking about sales, only about budget control, we were going to have each bureau, how much overtime going to permit. I had an assistant you may remember, Debbie Nolan. Debbie came in. We transferred her from here to New York. Debbie and I sat there and dealt with all these domestic bureaus, They could not ignore what we told 'em to do, because if they did, we'd come down on them like a ton of bricks and just get rid of the bureau manager. We had our marching orders. Debbie could be just as tough. I told her, "If I'm out you've got carte blanche to tell 'em what has to be done." Litfin or some of these other division managers might call up and squawk and scream. I'd say, "Thatís the way it's going to be. I got my orders from Beaton and he's got his orders from the board."

Harnett: In other words, our company wasn't different from any other company.

Page: Actually, there was pretty good discipline. Because it's a news organization, we are all journalists, all news guys, you know we don't react very well to discipline or to structure. That's just a reality. But given that as the culture of the company, it still had to try to function like a business. I'm in newspapers now. My tendency is to go out and spend an awful lot of money for the editorial product, but I can't do that if I want to stay alive. You have to have structure and discipline.

Harnett: What are your papers now?

Page: I've got the Rancho Santa Fe Review and the Carmel Valley News.

Harnett: You have Carmel?

Page: Not this Carmel, the Carmel Valley in San Diego.

Harnett: You're publisher?

Page: I own 'em both.

Harnett: Someplace I read you had some magazines.

: I sold my magazines. I got out of that.

Harnett: You went to the Sun Times.

Page: I left UPI in 1980, went initially to work for Hearst in San Antonio, editor of the San Antonio Light. I stayed six months and Murdoch hired me away to go across the street as general manager of the San Antonio Express-News. I was there for about a year and half and then he brought me to New York and made me president of about every subsidiary company he had that he didn't want to fiddle with, news bureaus, the (London) Times newspapers USA, the literary guide he put out. I was doing all this stuff, and he also put me in charge of acquisitions. The first paper we found and we tried to buy was the Buffalo Courier-Express. Rupert wanted to buy the Buffalo Courier Express. We wanted to negotiate a labor contract with the Guild. The Guild refused to accept what we wanted. What we said to the Guild in Buffalo was that we wanted 90 days to choose who we wanted to keep in the newsroom, without regard to seniority, and "if you give us that, we will sign a deal and we will buy this paper from Cowles." And the Guild refused, and so we went back to New York, and Cowles shut it down, and all those jobs were lost, they disappeared. Three months later I talked Hearst into selling Rupert the Boston Herald. And that time the Guild agreed with us. Hearst had told them, "If you donít deal with the Murdoch people this paper will close." The Herald is still alive 14 years later. So then I was publisher of the Herald for a year after this, then Rupert bought the Sun Times and I went to Chicago. Two and a half years after he bought the Sun Times I put a group together and bought it from him.

Harnett: You were the owner?

Page: I was there for about 2 1/2 years as an owner then I sold my stock and, well, here I am in California.

Harnett: McCadden was with Murdoch.

Page: George had left. He worked for Rupert in Australia.

Harnett: Also in New York.

: You know the kind of company Murdoch has now. When I went to work for Murdoch, it was a shell. In those days we lived off the income of the Star. The star was the home run. The Star produced 10 million cash flow every year.

Harnett: I donít want to keep our lunch late. Are you going to come over (for "Dowhold" reunion)?

Page: I'm going up get my wife, change clothes.

Click here to return to Part I.

---