Reuters' 1999 Report on Sale of UPI Broadcast Business to AP

WASHINGTON, Aug. 6, 1999 (Reuters) -- The Associated Press bought United Press International's broadcast news business, both news organisations said on Friday, and UPI's chief said this would clear the way for a greater presence on the Internet.

"You can't live with the status quo," UPI president Arnaud de Borchgrave said. "And what was brilliant pioneering work on the part of UPI prior to World War II with radio news is now a static quantity insofar as I'm concerned and it certainly doesn't fit into my plans for the future."

Those plans include becoming a "niche" player on the Internet, with Web sites dealing with nanotechnology, biotechnology and various national security topics, de Borchgrave said at a news conference.

The deal between two one-time bitter rivals involves contracts to serve some 400 radio stations and six television stations in the United States, the AP said in a statement. AP said it currently serves some 15,000 outlets worldwide with news, photos, graphics, audio, video and Internet services.

De Borchgrave said 47 people at UPI will be fired, leaving 171 UPI employees, almost all based in Washington. Some 26 "specialists" will be hired for UPI's Web business, he said.

UPI was founded as United Press in 1907 in part to counter AP's hold on the morning newspaper market. For much of the century the two top US wire services battled ferociously to break news around the world.

Both AP and UPI said the broadcast sale was effective immediately but did not disclose a purchase price. De Borchgrave said AP's offer was the best of three that were considered and that it was "mutually rewarding."

James Williams III, vice president and director of AP Broadcast Services, said UPI approached AP about the sale.

"This acquisition allows AP to strengthen its coverage of state news and expand its customer base," Williams said.

UPI's broadcast affiliates will be moved to AP services over the next 90 days, AP said in a statement. AP now serves 3,700 radio stations and more than 800 television outlets in the United States with print, audio, video and graphic services.

Seven UPI bureaus are being transformed into "virtual bureaus" without physical facilities except a reporter's computer and portable phone, de Borchgrave said. Those bureaus are Cleveland; Denver; Springfield, Illinois; Austin, Texas; Sacramento, California; Tallahassee, Florida, and Albany, New York.

UPI was a pioneer in the radio news business, beginning a news wire in the 1930s written in a format to be used by broadcasters. In the 1960s it added an audio service that provided audio feeds from newsmakers and UPI correspondents.

At its height in the early 1970s UPI claimed more than 1,200 radio clients.