Technology Key to UPI: Prospective Owner Said

Here's a June 13, 1992, UPI story on what a prospective UPI buyer said was the key to the wire service's survival (Charney was unsuccessful in his bid for the company):


NEW YORK (UPI) -- Attorney Leon H. Charney, the prospective purchaser of United Press International, says the key to the wire service's future is new technology and the profitable use of assets that have been underutilized.

Charney held a news conference Friday at his law office to discuss what he and five associate investors will be looking for in the next 10 days as they conduct a "due diligence" review of UPI's assets and potential as a money maker.

He emerged as a suitor for the 84-year-old news agency Thursday and signed an agreement in principle under which he will give UPI $180,000 in non-refundable operating money to keep the company running through June 22 as he examines its books. UPI had faced a shutdown at midnight Friday unless it found a new buyer or investors.

"I'm looking forward to concluding a mutually beneficial deal out of this," Charney said, noting that he is an active journalist, producing and moderating a weekly talk show on world events called "The Leon Charney Report" on Channel 31 in New York City.

"I'm especially sympathetic to reporters having a job, and it's a very tough job, but I'm not a white knight as I have been described. It will be a business decision.

"Somewhere there must be a profit center," he said.

"I think competition in the news business is very important, very healthy. It scares me to see the attrition of news sources."

Charney said he and his advisers would be looking into ways UPI can be transformed with new technology and for assets that can be used in more profitable ways that "would help balance out the negative cash flow."

Noting that he had advanced $180,000 to keep UPI running until midnight June 22, Charney said he hoped to complete his financial assessment of UPI by that deadline and that any extension of the 10-day period would depend on his partners.

"If things look great, we may go to the bankruptcy court and say we would like to continue our investigation," he said.

He said he was the principal in his investment group and identified his partners as financier Michael Floersheim of E&C Trading Corp. in Zurich, Switzerland; Ernst Strauss, a private investor also of Zurich; Elliot Levigne, president of Perry Ellis International, a New York apparel firm; Saul Rudes, a New York attorney; and Brian Anderson of Kidder Peabody & Co., a New York brokerage.

"It's good to have associates because all of them have different resources," he observed.

Charney said that although he has been prominent in Middle Eastern affairs, served as one of President Carter's advisers in that area and has been identified with Jewish organizations, he also has many friends in the Arab world and was in Bahrain as a government guest during the Gulf War as well as in Israel.

"There would be no tilt or bias to reporting the news and we would in no way editorialize," he said, referring to his potential ownership of UPI. "I know what it is to have integrity as a journalist."

Charney voiced admiration for what Ted Turner has accomplished with his Cable News Network channel and suggested that UPI might be reshaped along those lines using channel TV satellite tranmission.

"I think someone is going to emulate what they (CNN) have done, possibly in another way," he said. "You don't have to be Hertz. You can be Avis.

"AP, Reuters and UPI are going to have to update how they do things to get into the 21st century. Ten years from now we'll be in a new technology that we don't even know about now."

Charney was joined by Pieter VanBennekom, UPI president, who thanked him and his associates on behalf of UPI and its employees for their interest in the wire service's survival.

Religious broadcaster Pat Robertson Wednesday withdrew a $6 million offer for the entire company made at a bankruptcy auction last month and submitted a revised bid of $500,000 for the UPI name and some of its other assets. UPI creditors and the wire service rejected Robertson's pared-down bid in federal bankruptcy court Thursday.

UPI, whose parent is Infotechnology Inc., filed for Chapter 11 bankruptcy protection Aug. 28, the second time in six years. Unlike Chapter 7 liquidation, Chapter 11 gives a company protection from its creditors as it attempts reorganization.

In its Chapter 11 filing in the U.S. Bankruptcy Court in Manhattan, UPI said it owed creditors about $60 million and had assets of about $23 million.

United Press was founded July 15, 1907, by publisher E.W. Scripps to compete with The Associated Press. It merged in 1958 with William Randolph Hearst's International News Service to form United Press International.

In 1982, Scripps Howard sold the news agency and the company has had three owners since.

Charney said UPI's success depends on "the economic viability." He will be in Washington next week to assess UPI's assets.

"It's a gamble on our part," he said. "We have gambled $180,000. It's non-refundable, so we've taken a big shot and we've paid for it. We've paid for the privilege of sitting with Pieter."

"I'm not informed enough today to know what to do and what not to do," he said. "We don't have a firm contract. We don't have a $6 million deal like Robertson did."