Nogales Asks Nupes for 9.9 Percent Rate Hike

This is a May 7, 1985, UPI story on UPI chairman Luis Nogales asking newspaper publishers to approve a 9.9 percent assessment:

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          am-ampa-upi 5-7
UPI Asks Publishers for Help
   MIAMI BEACH, Fla. (UPI) -- United Press International chairman Luis
Nogales asked the nation's newspapers Tuesday to help the wire service
out of its financial troubles by approving a 9.9 percent assessment.
   "We can't do it alone. We come to you now to ask you for your support,
a support that we think is based on the merit of our product," Nogales
told about 900 publishers and news executives attending the UPI
luncheon at the 99th Annual American Newspaper Publishers Association
   "We need your support, and now is the time," Nogales said.
   Nogales said there were "mixed reaction" to the assessment, but at
least 15 newspapers had already agreed to the additional charge.
   Nogales said he regretted the public disputes between UPI's new
management team and its principal owners, Douglas Ruhe and William
Geissler, and said the proper forum to resolve those differences "is before
the court."
   "I can tell you that in fact our financial position is better today than it has
been over the last six to eight months," Nogales said. "We are confronting
our problems head on."
   For the last two weeks, UPI senior managers have been visiting major
newspaper clients to gauge reaction on the assessment. UPI executives
also huddled with clients during the ANPA convention, trying to convince
them of the need for the money -- a need that became acute when the wire
service filed for Chapter 11 bankruptcy protection April 28, listing $20
million in short-term debt and total liabilities of up to $45 million.
   UPI was forced into bankruptcy when a prime lender cut off funds,
resulting in payroll checks bouncing. Employees have since been paid.
   UPI Editor-in-Chief Maxwell McCrohon told the publishers there
would be "further (staff) reductions in the near future," but suggested
the layoffs might be canceled if newspapers agreed to the assessment.
   He said UPI would continue to operate bureaus in 50 states, would
provide full state reports in all but 11 of those states, and would maintain
the picture report at its full level to all states.
   "We have faced the reality that we can no longer provide the same level
of service to states with few subscribers," McCrohon said.
   He said UPI's Features Division would expand, with special emphasis
on science, health, business, social trends and entertainment.
   The "downsizing of the editorial staff" and the assessment are "important
elements" to insure UPI's survival, Nogales said.
   Nogales pledged the wire service would continue operating.
   "As Max said, we believe that surrender is not the course for UPI, but
we can't do it alone," Nogales said.
UPI 05-07-85 05:41 pcd