United Press International, Inc. Business Information, Profile, and History

Company Perspectives:

Since 1907, United Press International (UPI) has been a leading provider of critical information to media outlets, businesses, governments and researchers worldwide. UPI is a global operation headquartered in Washington, D.C. with offices in Beirut, Hong Kong, London, Santiago, Seoul, and Tokyo. UPI licenses content directly to print outlets, online media, and institutions of all types. In addition, UPI's distribution partners provide our content to thousands of businesses, policy groups and academic institutions worldwide. Our audience consists of millions of decision-makers who depend on UPI's insightful and analytical stories to make better business or policy decisions.

History of United Press International, Inc.

United Press International, Inc. (UPI), like its rival The Associated Press (AP), is a name recognized around the world for news and photography. Though UPI has downsized and narrowed its scope, the renowned company still brings up-to-the-minute news, sports, and in-depth reports to its clients, primarily over the Internet. With a century of experience behind its dispatches, UPI has continued to forge alliances and remain at the cutting edge of information collection and delivery.

In the Beginning: 1907-57

Newspaper publisher Edward "E.W." Scripps founded United Press (UP) on June 21, 1907, to make national and international news coverage available to all existing newspapers and newspaper startups. In a dig at the older and larger Associated Press wire service, Scripps reportedly said, "I do not believe it would be good for journalism in this country if there should be one big news trust." United Press was created by a merger of Publisher's Press with Scripps-McRae Press Association and Scripps News Associations. There were several organizations then using the name "United Press," and it took Scripps two years of legal wrangling to gain ownership of the name.

On its first day of business the news service used leased telegraph lines to send 12,000 words of Morse code to 369 afternoon newspapers, including those belonging to the Scripps chain. Early "Unipressers," as the correspondents were called, were the first wire service reporters to conduct interviews and to put bylines on stories. They were also the first to send feature stories over the wire and to include laborers' views in coverage of industrial disputes.

In 1935 UP expanded its services and became the first wire service to tailor news for radio broadcasters. Radio announcer Ronald Reagan at WHO in Des Moines, Iowa, used the newly launched UP radio wire in 1936. In contrast to the well known AP, Unipressers generally worked solo and were encouraged to keep their expenses down, and to be both speedy and brief. Opinions were not welcome, just the facts. To beat their competitors, UP reporters resorted to both creative and common sense methods. A Unipresser in Madrid in 1936 tricked the censors to get the first story out announcing the beginning of the Spanish Civil War. His message to London was a mishmash of words, with the first letter of each word spelling out "foreign legion revolted martial law declared." Decades later, during President Nixon's first visit to China in 1972, UPI White House reporter Helen Thomas filed her story from the tunnels of the ancient, underground Ming tombs simply by asking a Chinese attendant if there was a telephone anywhere around. He led her to one nearby. In 1981 the "mystery man" sought by police for running from the scene of the assassination attempt on President Reagan turned out to be a UPI reporter trying to get to a telephone to call in the story.

In the early 1950s the E.W. Scripps Company (then known as Scripps Howard) sold its Acme Newspictures photo agency to United Press, beginning a relationship that would result in a number of Pulitzer Prizes for news photography.

Mergers, Acquisitions, and Losses: 1958-85

In May 1958 United Press merged with International News Service (INS), owned by William Randolph Hearst, and was renamed United Press International. Early discussions between UP and INS had focused on merging their newsphoto services. But in 1955 the negotiations began examining consolidation of the two parent organizations. After three years of secret talks, the two companies reached an agreement. United Press Associations absorbed International News Service, buying the Hearst assets and assuming responsibility for fulfilling all INS news and picture contracts. Frank Bartholomew, president of UP, remembered that the eight sets of the final agreement weighed 17 pounds, as measured on a bathroom scale.

UP and INS jointly announced UPI's birth at noon on May 24, 1958. The announcement read: "This is the first dispatch of the news service which will embrace the largest number of newspaper and radio clients ever served simultaneously by an independently operated news and picture agency." At the time of its founding, UPI had 6,000 employees and served 5,000 newspapers and broadcast clients. Later that year UPI introduced the first wire service radio network, with correspondents reading their reports from around the globe. Among the voices with which radio listeners became familiar were those of Eric Sevareid, David Brinkley, and Walter Cronkite.

Reporting news internationally, as well as domestically, turned out to be an expensive business. UPI operated at a loss for years, with its parent company carrying it. Those losses increased as afternoon newspapers, the service's primary market, began to close. In 1978 E.W. Scripps Company proposed an arrangement for its clients to invest in the news service, becoming co-owners. When the effort failed, the company began looking for a buyer.

E.W. Scripps Company celebrated UPI's diamond anniversary in 1982 by selling the news service to Media News Corporation, a new company formed by four investors who owned U.S. newspaper, cable, and television stations. Scripps received $1 from the new owners and agreed to spend a further $5 million to support the service during the transition. At the time of its sale UPI was serving more than 7,500 newspapers, as well as radio, television, and cable systems in more than 100 countries. Its 2,000 full-time employees in 224 news and picture bureaus sent some 13 million words of news and other information out each day. More than 550 cable systems subscribed to UPI Cable Newswire, making UPI the largest provider of written news for cable television screens.

Revenues for UPI reached $110 million in 1982, but it was operating with a $4 million loss. Much of this was caused by huge telephone bills: $14 million a year in the United States and $30 million worldwide. Media News determined it could save as much as $7 million by using satellites rather than telephone lines to send its articles and pictures. The new owners announced they would spend $20 million to improve communications and to beef up state and regional news coverage. They also planned to study the pricing of the news service. Unfortunately, their efforts failed. In April 1985 UPI declared bankruptcy and filed for Chapter 11 protection from its creditors. Employee layoffs began as the company reported $40.2 million in debt and about $24 million in assets.

Rebirth and More Losses: 1986-92

In June 1986 a company called New UPI Inc., owned by Mexican businessman Mario Vazquez-Rana and Texas real estate investor Joe Russo, bought the financially troubled UPI. New UPI Inc. paid $41 million for UPI, beating out Financial News Network (FNN) in the bidding. Employees took a 25 percent pay cut to keep UPI going, as Vazquez-Rana, who owned 90 percent of the company, pledged to keep it as a general news service. After two years--during which UPI lost between $1 million and $2 million a month--Vazquez-Rana sold the company to Infotech Inc., which held 46 percent of cable business channel FNN. The agreement transferred operational control but not ownership to Infotech, with Vazquez-Rana setting up lines of credit to cover costs.

Infotech planned to make UPI "the cornerstone of a high-tech information network," according to Elizabeth Tucker in a 1988 Washington Post article. UPI Chairman Earl Brian envisioned UPI reporters feeding information to FNN and its 30 million viewers, while financial information from FNN correspondents would be available for UPI's print business products. As part of this strategy, Infotech broke up UPI's generalized wire service into specific segments--national sports, business news, photographs, and international news--and concentrated more heavily on covering local and regional news.

By late 1990 with Infotech heavily in debt and unable to meet its daily operating expenses, the company put UPI and FNN up for sale. The following August, with $65.2 million in liabilities and $22.7 million in assets, UPI sought once again to reorganize under Chapter 11. The news service was down to 586 employees and its future was uncertain. By the middle of 1992 it appeared religious broadcaster Pat Robertson would buy UPI, but he withdrew his bid, offering instead to buy just the name, UPI's photo archive, and its overseas news photo distribution business. In June the bankruptcy judge selected Middle East Broadcasting Centre, Ltd. (MBC) of London over Robertson and a Dutch foundation. Middle East Broadcasting paid $3.95 million in cash for UPI.

The principal owner of MBC was Sheik Walid Al-Ibrahim, brother-in-law of King Fahd of Saudi Arabia, and the company broadcasted news and entertainment from Arabia to Europe, Africa, and the Middle East. MBC was UPI's fifth owner in a decade, a period that also included two bankruptcies, a court-ordered liquidation, management upheaval, and labor disputes. For the second time in its 85-year history, UPI was foreign-owned.

UPI Recovering, Somewhat: 1993-97

In 1993 and 1994 the new owners reorganized UPI into six regional bureaus, made significant investments to upgrade the company's communications system, and started expanding into new areas. The management team who took over in early 1994 symbolized MBC's new strategic direction for UPI. Chief Executive L. Brewster Jackson and his management team came from high-tech media companies and international businesses. In a 1994 interview, Jean AbiNader, vice-president of operations, told the Canada NewsWire, "Our worldwide technology investment alone should tell the world that we aren't resting on our laurels. Our new global satellite system, delivering an array of news and information services to desktop computers anywhere in an instant says a lot about our future direction."

The company began selling electronic news services to a wider array of subscribers and created 35 worldwide sales positions to market UPI's products to corporate and government markets as well as media customers. It also upgraded its photos and other images, so they could be delivered by satellite. By 1995 UPI had completed a satellite transmission system and no longer needed to send news over telephone lines.

One of UPI's first new services was "World View," a global satellite network to provide information important to corporate clients. Using UPI's network program, clients could access text, audio, photographs, and live video information. UPI's management came to believe the company's future lay in broadcasting, not in wire service writing. By the end of 1996 the company was concentrating its efforts on expanding its broadcast and online computer services and in early 1997 nearly all of UPI's news bureaus in Europe (except London) and the United States were closed, leaving the company to depend on freelance "stringers" for coverage. To strengthen its radio broadcast activities, the broadcast and news desks were merged.

Focusing on broadcasting made sense; UPI Radio Network, with 120 affiliates, accounted for half of the company's income. The network's clients included Salem Broadcasting, Skylight, and People's Radio Network, three religious broadcasters, as well as the Armed Forces Radio Network and Bloomberg News Radio. Employment at UPI was down to 300 staff members and 800 stringers with about 1,000 broadcast clients and 1,000 newspaper and Internet clients.

Still far from profitable, UPI was developing what the New York Times, in a March 1997 article, described as "a kind of niche journalism, selling fragments of news to customers ranging from a San Francisco paging service that puts headlines on pager screens to a Kentucky enterprise that wants to flash headlines in small streaming lights installed in bars, to religious broadcasters who have been adding news broadcasts as a way of keeping their listeners tuned in." The headline service, which UPI called "Short Service," provided two-sentence news summaries. For its news articles, UPI adopted a new writing style limited to 350 words. "We provide details to reporters and editors to use in their own reports," a UPI executive explained in the Times article.

In mid-1997 James Adams, who had been the Washington bureau chief for London's Sunday Times after serving as its defense correspondence and managing editor, was named chief executive. Adams greatly accelerated the company's move to becoming an electronic information source, aimed at developing ways individual consumers could access specific "knowledge" at any time. One new service was UPI MEMO, an online joint venture with Meridian Emerging Markets Ltd. of Virginia. For $10,000 a year, a client received comprehensive coverage on 16,000 companies in emerging markets and the necessary software to screen and analyze the data. Reports addressed the political and cultural issues influencing the economic outlook in a market as well as pricing and dividend information, earnings estimates, and historical fundamental financial data on individual companies.

New Facets: 1998 to the 2000s

In 1998 Adams announced UPI was getting into the production business, with the formation of UPI Productions to create documentary and news programs for television, video, and the Internet. He also moved to develop new markets and customers for UPI's extensive archives. To this end, he developed a joint venture with Microsoft Corporation, called UPI-Microsoft Knowledge Center, to convert and distribute text, photos, audio, and video/film over the Internet. He also discussed the launch of a new entity to sell its library of films and videos as well as make UPI material available through Media Exchange International's web site on a per-use basis to general users. In May, Adams announced an agreement with Geoworks Corporation to deliver headlines and news summaries to wireless devices. With Geoworks' software, customers could search for news by topics, names, or keywords.

Adams continued to have high expectations for UPI, predicting the company would be profitable by 1999 and might even go public. His words rang hollow, however, as the company fell deeper into debt. Adams resigned in late 1998 and took several top staffers with him to create a new information services firm. UPI's Saudi owners brought in Arnaud de Borchgrave, a longtime UPI bureau chief, as their new chief executive. Next came the all-too-familiar: UPI was sold again, this time to Reverend Sun Myung Moon's News World Communications (NWC). Moon and the NWC owned the venerable Washington Post newspaper, as well as other papers including the World Peace Herald, Middle East Times, and Latin America's Tiempos del Mundo.

UPI staffers were told the controversial Moon's ownership would have little impact on them; such sentiments failed to convince veteran White House correspondent Helen Thomas, UPI's only jewel in the crown, who resigned as soon as the sale to Moon and NWC became final. Chief Executive de Borchgrave nevertheless tried to put a positive spin on UPI's latest ownership change and was quoted in U.S. News & World Report (December 4, 2000) as saying, "UPI, which also stands for Unlimited Possibilities and Ideas, will consign the humdrum to oblivion, think out-of-the-box, and look over-the-horizon."

Over the next few years UPI quietly went about its business, trying to stay abreast of technological advances and holding on to the few loyal clients it had. For the most part it succeeded, by extending coverage and bringing new providers into the fold. In 2004 UPI expanded its decades-old partnership with information services firm LexisNexis, as well as Thomson Gale (a subsidiary of Toronto-based Thomson Corporation) and EBSCO Publishing. Thomson Gale and EBSCO Publishing, both providers of educational and information services, began offering UPI's English, Spanish, and some Arabic content in their extensive online databases. In addition, UPI formalized an agreement with the Sports Network to provide scores and sports information to media, interactive, and corporate clients nationwide.

In early 2005 UPI partnered with Country Briefings, Ltd. to add the latter's content to its news and informational offerings. Country Briefings, which published current political, economic, and business reports on 32 major world markets, also possessed an archive with more than a decade's worth of international news.

Although the UPI that existed in the late 2000s was a fraction of its competitors' sizes, it had weathered a century of ups and downs and transitioned from a telegraph and phone news agency to an established information services provider. Its numerous owners and financial woes did not keep UPI from carving itself a niche within the information collection industry to provide media outlets, companies, governments, schools, and researchers with news and information in English, Spanish, and Arabic. The company's partnerships with ABC-CLIO Schools, LexisNexis, EBSCO Publishing, Thomson Gale, NewsCom, Omnivex Corporation, and the Copyright Clearance Center brought its products to the broadest possible range of clients from the boardroom and the classroom to individual homes. In the electronic and digital age of the 21st century, competition was all about delivery and speed and UPI continued to make strides in both of these areas.

Principal Competitors: Agence France-Presse; The Associated Press; Bell & Howell Company; Bloomberg L.P.; Dow Jones & Company, Inc.; Gannett Company, Inc.; Knight Ridder-Tribune News Service; New York Times Company; Reuters Group PLC.

Chronology

• Key Dates:
• 1907: United Press (UP) is founded by E.W. Scripps.
• 1935: UP begins furnishing news stories to radio stations.
• 1958: United Press and International News Service merge to create United Press International.
• 1982: UPI is sold to Media News Corporation.
• 1985: A struggling UPI declares bankruptcy and files for Chapter 11 protection.
• 1986: UPI is acquired by New UPI Inc. for $41 million.
• 1988: The ailing UPI's operations are taken over by Infotech, Inc.
• 1991: UPI is forced to file for Chapter 11 protection again.
• 1992: UPI is bought by Middle East Broadcasting Centre, Ltd. for $3.95 million.
• 2000: UPI is bought by Reverend Sun Myung Moon's News World Communications.