July/August 1999 Quill Magazine Story on UPI's Future



Here's an article on UPI's future that appeared in the July/August issue of Quill magazine (It was written by Dallas freelancer Jeff Siegel):


THE UPI STRATEGY

de Borchgrave dismantles the wire's legacy in hopes of building a different but viable service

Every time UPI's Helen Thomas closes a White House news conference, the question is not whether she'll write a good, quick, accurate story, but how many people can read it in their newspaper.

Every time United Press International scores a beat, as it did with an exclusive interview with Yugoslavia's Slobodan Milosevic in May, the question is not what the Serbian president said, but whether people who read about it in The New York Times, Washington Post, or on-line at Globe.com, or saw it on CNN or a network, remember that UPI was the source.

After at least 15 years of almost going out of business, the question uppermost among many in the media is : What's going on with UPI?

The answer depends on perspective. In fact, there are three UPIs:

* The UPI of the news media, which almost seems to think it can nurse UPI to health on the back of its sympathetic stories.

* The UPI of blessed memory, its legend perpetuated by the wire service's former employees on a Web site and a listserv.

* The new UPI, run by Arnaud de Borchgrave, the former Reagan administration confidant, former UPI bureau chief, and past editor of the Washington Times, whose UPI has very little in common with anyone else's. But that's fine with him.

"God, we have to get on with it," he says. "We can't keep being nostalgic. Everybody has to look forward, and not look back. The way news is delivered is changing, and we have to change with it."

***

UPI's troubles have been as well-documented as they have been long-running. The wire service, once The Associated Press's only rival in this country and respected throughout the world, has endured two bankruptcies, a half-dozen ownership groups and the chief executives each brought alone, and nearly continual layoffs since the mid-1980s. The company doesn't discuss its clients, but most are radio stations, Web sites, and governmental agencies around the world. No major American newspaper or TV news department has subscribed to UPI for years, although de Borchgrave says Japan's Kyodo news service recently renewed its contract.

In addition, the wire service has fewer than 200 employees -- down from 1,500 at its peak. de Borchgrave says that Spanish and the radio services, the final remnants of the glory days, will have to go. The Spanish-language service was closed July 2.

There also will be more layoffs in an attempt to end the financial losses, currently more than $1 million a month, that have plagued UPI more often than not since it was formed four decades ago with the joining of United Press and International News Service.

de Borchgrave's goal is a financially successful UPI that will cover important political, cultural, and scientific stories in the same way that Bloomberg covers business and ESPN covers sports. It will do so not over a dedicated wire, but through e-mail and the Internet.

He wants to focus on stories coming out of Washington of what he calls "critical importance," as well as stories from leading U.S. think tanks and research centers that also fit that definition. He points to his interview with Milosevic as one example; others might include in-depth looks at electronic warfare or cancer research.

What de Borchgrave doesn't want is a return to the old days of sinking in the morass that is a wire service's daily obligation of statehouse reports, three-alarm fire stories, and the like. He especially doesn't want UPI to get wrapped up in anything resembling a Monica-watch, which he doesn't consider to be either good journalism or good sense. He says the company can't afford those things, and that there is no need for them.

"I don't see how we can compete anymore with Reuters and AP," de Borchgrave says. "We'd just be a pale carbon copy of what they do."

***

That's a far cry from the old UPI, and from what some in the journalism community seem to want.

"I guess I'm old-fashioned, but the key to success to being a good news service is to provide news," says Rob Miraldi, a former Fulbright scholar and newspaperman who teaches journalism at SUNY-New Paltz. "And the best way to provide news is to have as many people doing it as possible. If there is only AP, who is going to push them to be better? When I worked in the wire room, there was always excitement and debate over who was going to be first with the story."

The journalism community bends over backward to give UPI the benefit of the doubt, perhaps in the hope that someone, somehow, can bring back the old days. James Adams, the former Times of London managing editor who was also its Washington bureau chief when he took over UPI, resigned as UPI chief last fall in a dustup that eventually made The New York Times. But when he had been hired about a year before, he was hailed as the wire agency's savior.

Even de Borchgrave, whose credentials might make some in the media quiver -- editor of the Unification Church's paper, a senior adviser at the right-wing Center for Strategic and International Studies, and a man whose two books include a best-seller about a Soviet disinformation plot to destroy the U.S. -- is greeted with open arms. Says Gary Neelerman, a former UPI executive now at the Los Angeles Times Syndicate: "At least he has a legitimate interest in making UPI succeed. I wouldn't classify him with the other people who have been there."

It is understandable that it would be painful to see UPI fail for a final time. The first couple were painful enough, as anyone who has seen the UPI alumnus areas in cyberspace can attest. The most popular is a listserv known as Downhold, created by former UPI San Francisco bureau chief Dick Harnett. Downhold (also the subject of a New York Times story) features war stories, obituaries, requests for information about long-lost colleagues, and the like. A posting asking for people to talk about UPI for this story elicited more than a dozen offers. More than 200 people subscribe to Downhold, which is modeled after the old UPI message wire.

"The listserv is like methadone for us -- it ain't the real thing, but it's all we can get," says Kate Callen, a former UPI employee who does public relations for the University of California-San Diego. "Everyone has a great deal of psychic capital invested in UPI, so we act like flinty shareholders. Not long ago, one of the listserv's fathers mentioned that he's going into hospice (:and you know what that means," he wrote) and he expects volunteers to take on his unfinished UPI archival work.

In addition to Downhold, former reporter and bureau chief Bob Lowry has posted http://www.auburn.edu/~lowrygr/, a history of the wire service -- complete with internal memos -- over the past two decades.

"UPI was a constant, exciting adventure," says Cheryl Arvidson, who worked for UPI for 11 years and today works for The Freedom Forum. "Everyone who worked there had some of the best times of their lives with some of the best people."

***

That, however, was never enough to help UPI succeed financially. This time, de Borchgrave says he can turn the company around in two years, once he makes the changes he thinks are necessary. In fact, he says, UPI might have to add more experienced employees in Washington to be able to pursue the kinds of stories he wants. He will do this against a backdrop of what former employees describe as a record of legendary financial woes both at the wire service and among the company's various owners. About the only thing that those who speak ill of Adams say nicely about him is that the Saudi investors who own UPI missed several scheduled payments during his tenure, making his job that much more difficult.

de Borchgrave, who has a five-year contract, says he doesn't expect those problems, and that the next two years' worth of payments have already been sent from the owners. If the money is available, the question that will almost certainly determine UPI's future is whether there is a demand for what de Borchgrave wants to do.

He apparently is banking on something that many in the news business haven't paid much attention to. A 1998 study by a Washington think tank, the Pew Research Center, discovered that newspapers and television -- a wire service's traditional clients -- were losing their audiences at an even faster rate than previously thought. Slightly more than one in three surveyed said they regularly watched the network evening news, and people in just one of the six groups of news consumers identified in the study said they made the morning paper a part of their routine.

On the other hand, one in five said they got news from the Internet -- up from one in 18 in 1996. Additionally, those who got news from the Internet liked to pick and choose what they got and where they got it, with an emphasis on personal finance, science, and health. That has to be heartening news for a UPI that wants to distribute news via the Internet and focus on some of those topics.

"As someone who has spent 20 years in Washington, I can tell you that some of what de Borchgrave wants to do may find the mother lode," says Arvidson. "There are stories coming out of research centers and think tanks that are either not covered at all or not covered well. Reader surveys say it's a rich area, and I'm surprised more haven't moved into it."

It is something that Bloomberg and Reuters also discovered. Both services prospered during UPI's decline (Bloomberg has more than 700 employees; Reuters 2,100, with almost 200 in the United States). Bloomberg started out providing business and financial news via its own computers. Today Bloomberg.com is a fixture on the Internet, and, says editor in chief Matt Winkler, "We are not your father's wire service. We just don't throw stuff on the wire. We offer context and perspective."

That has also been a goal at Reuters, and especially in the division that oversees on-line content. Andrew Nibley, who left UPI to become Reuters' managing editor and today is president of Reuters News Media, says one of the guidelines when the division was set up in the late 1980s was to design products to fill niches on the Internet.

"When we saw the emergence of the on-line market," says Nibley, "we realized there was going to be a whole new generation of news readers. So, we aggressively went after them."

That's why, he says, you might not see a Reuters story in your daily newspaper or hear a Reuters story credited on TV, but you can see one on America Online, Yahoo, Excite, or MSN. He speaks of branding and marketing just like anyone who sells any product, and compares reading Reuters on AOL or Yahoo to ordering Coke in a restaurant. The restaurant may be different each time, but the Coke is always the same -- just as the Internet site is always different, but the Reuters story will always be the same product.

Whether the new UPI can duplicate the successes of Bloomberg and Reuters depends on more than understanding marketing. It depends on whether de Borchgrave can sell his vision to new subscribers, to his employees, and to his owners. He did something similar at the Washington Times, where he turned around newspaper that had been more associated with its church background and its arch-conservative politics than for its reporting.

But the challenge at UPI is even greater. Arvidson points out that Washington can't be covered on a tight budget, one of de Borchgrave's handicaps. Neeleman questions how de Borchgrave will be able to make the new UPI stand out from the dozens of supplemental feature and wire services.

"You know," says Arvidson, "sometimes I just wish they would close it and put it out of its misery. This isn't the UPI we worked for."

Which, in his own way, is exactly what de Borchgrave wants."

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