United Press International, Inc. History

Company Perspectives:

We continue to provide the products and services that have defined UPI's reputation for world-class editorial excellence: instant access to fast-breaking state, national, and international news. But, with innovative technology, major infrastructure investments, and a bold vision of what this company will be, we're bringing something entirely new to the news industry. We are building comprehensive, integrated packages of audio, video, print, photographic, multimedia and online information.

Company History:

United Press International, Inc. (UPI) is a leading global information service and the largest privately owned news service. Its offices around the world gather news that is turned into headlines, summaries, articles, and broadcast feeds and disseminated via wire and satellite for broadcast, print, online, and other subscribers. UPI is owned by Middle East Broadcasting Centre, Ltd., a private communications company owned by a group of investors from Saudi Arabia and based in London.

The First 50 Years: 1907-57

On June 21, 1907, newspaper publisher Edward "E.W." Scripps founded the United Press (UP) to make adequate national and international news coverage available for any existing newspaper or anyone starting up a newspaper. In a dig at the older Associated Press wire service, Scripps said, "I do not believe it would be good for journalism in this country if there should be one big news trust." [Quigg]

UP 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 battles to gain ownership of that name.

On its first day of business the new 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 the first to put bylines on stories. They were also the first to send feature stories over the wire and to include labor's side 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.

Robert Manning, a Unipresser in the 1940s, wrote in a 1982 article in the New York Times, "You could easily tell a U.P. man from an A.P. man, because a Unipresser worked alone and A.P. men traveled in packs to blanket a story. While suffering under it, we took an almost demented delight in our thralldom to the U.P.'s legendary parsimony. The loose organization of U.P. alumni, which includes such luminaries as Walter Cronkite, Harrison E. Salibury, William L. Shirer and Howard K. Smith, to name a few, is called The Downhold Club, in celebration of the almost constant stream of Teletyped orders to bureaus to 'downhold expenses."'

Unipressers took great pride in their expense account stories. In his silver anniversary piece, H.D. Quigg recounted two. "Harold Jacobs, covering a Mexican revolution, listed 'one mule shot out from under me.' Edward Beattie, covering the 1935 Ethiopian war on a remote and nearly inaccessible frontier with an army of tribesmen bearing spears and shields, sent an expense account (at 35 cents a thaler) that went: 'Canvas bag for camping, 48 thalers; provisions in field, 201 thalers; mule, 240 thalers; boy's wages, 60 thalers; feed for mule, 9 thalers; Mauser rifle and ammunition, 280 thalers; high boots, 45 thalers."'

In putting reporters' stories on the wire, UP emphasized speed and brevity. Opinions were not welcome, just the facts. One of Manning's favorite examples was a dispatch from Palestine, which read in total: "The visit of the United Nations Palestine Commission was marred today when the delegate of the Netherlands fell into the tomb of Nicodemus."

To beat their competitors, Unipressers resorted to both creative and common sense methods. A UP reporter 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 were 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 Co. (then known as Scripps Howard) sold its Acme Newspictures photo agency to United Press, beginning a relationship that would result in eight Pulitzer Prizes for news photography.

Putting the "I" in UPI: 1958

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 of INS's 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 Saturday, 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." [p. 52, Editor & Publisher, Sept. 25, 1982] 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.

But reporting news internationally, as well as nationally, was an expensive business. UPI operated at a loss for years, with the parent company carrying it. Those losses increased as afternoon newspapers, the service's primary market, began to close. In 1978 E.W. Scripps Co. proposed an arrangement whereby its clients would invest in the news service, becoming co-owners. When that effort failed, the company began looking for a buyer.

New Owners: Media News Corporation, 1982-86

E.W. Scripps Co. celebrated UPI's diamond anniversary in 1982 by selling the news service to Media News Corporation, a new company formed by four investors, owners of 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, radio and television stations, 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.

UPI's revenues in 1982 reached $110 million, but it was operating with a $4 million loss. Much of that 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 that 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.

But their efforts failed. In April 1985, UPI declared bankruptcy and filed for Chapter 11 protection from its creditors. Employee layoffs began. The company reported $40.2 million in debts and about $24 million in assets.

New Owners: New UPI Inc., 1986-88

In June 1986, New UPI Inc., owned by Mexican businessman Mario Vazquez-Rana and Texas real estate investor Joe Russo, bought the company. New UPI Inc. paid $41 million for UPI, beating out Financial News Network (FNN) in the bidding. Employees took a 25 percent wage cut to keep UPI going, as Vazquez-Rana, who owned 90 percent of the company, pledged to keep it as a general news service.

But after two years, during which UPI lost between $1 million and $2 million a month, Vazquez-Rana sold the company to Infotechnology Inc., which held 46 percent of cable business channel Financial News Network. The agreement transferred operational control, but not ownership, to Infotech, with Vazquez-Rana setting up lines of credit to cover costs.

New Owners: Infotechnology Inc., 1988-91

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 its strategy, Infotech broke up UPI's generalized wire-service report into specific segments--national sports, business news, photographs, and international news--and concentrated more heavily on covering local and regional news.

By November 1990, Infotech, owing some $160 million to banks and not able to meet daily operating expenses, put UPI and FNN up for sale. The following August, with $65.2 million in liabilities and $22.7 million in assets, UPI sought to reorganize under Chapter 11. The news service was down to 586 employees, and its future was uncertain.

Significant changes had occurred in the way news was gathered and delivered, with compact satellite technology enabling broadcasters to send their own reporters to cover news and specialized wire services offering more comprehensive information. "There's so much information available now that it's difficult for a [general wire service] to prosper, especially one that's number two," business professor Jon Udell told Paul Farhi of the Washington Post.

New Owners: Middle East Broadcasting Centre, Ltd., 1992-96

In May 1992, it appeared that religious broadcaster Pat Robertson would buy UPI, but he withdrew his bid for the entire operation, 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 private communications company, whose principal owner, Sheik Walid Al-Ibrahim, was brother-in-law of King Fahd of Saudi Arabia, broadcast news and entertainment in Arabic 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.

Over the next 18 months, 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 early in 1994 symbolized MBC's new strategic direction for UPI. Headed by CEO L. Brewster Jackson, they came from media and high-tech 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 to media customers. It also upgraded its photos and other images technologically, so that 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. "If a country in Latin America decided to nationalize oil refineries, for instance, that information would be instrumental to a company like Mobil or Exxon," UPI Marketing Director Ron MacIntyre explained to the Washington Times. Using the network program, clients could access text, audio, photographs, and live video information.

Focus on Broadcast and Online Services, 1996-97

Studies during 1996 found that the company's future lay in broadcasting, not in wire service writing. By the end of the year, UPI had decided to concentrate its efforts on expanding its broadcast and computer online services. In January 1997 the company closed all of its European bureaus except the London office as well as most of its news bureaus in the United States, depending on freelance "stringers" for coverage. It also strengthened its radio broadcast activities, merging the news desk and broadcast desk.

Focusing on broadcasting made sense. UPI Radio Network, with 120 affiliates, accounted for one-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 World Wide Web 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.

Shaping Knowledge: 1997 to the Present

In mid-1997 James Adams was named CEO. Adams, who had been the Washington bureau chief for London's Sunday Times after serving as its defense correspondence and managing editor, greatly accelerated the company's move to becoming an electronic information source. He also aimed UPI at the Internet and at developing ways individual consumers could access the specific "knowledge" they wanted.

One new service was the 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 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.

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 that 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 announced the company would launch 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 the general user. In May, Adams announced an agreement with Geoworks Corporation to deliver headlines and news summaries to wireless devices. With Geoworks' software, customers also would be able to use their handsets to search for news by topics, names, or keywords.

As CEO Adams told CNNfn, his strategy was "to move to the Web as fast as possible. All our future lies with the Internet and business through the Web. Our delivery systems must be there. Our products must be put through there. That is where our market is." He predicted that UPI would be profitable in 1999 for the first time in its history and that he hoped to take the company public eventually.

Principal Subsidiaries: UPI Productions.

Further Reading:

• Bartholomew, Frank H., "Putting the 'I' into U.P.I.," Editor & Publisher, September 25, 1982, p. 25.
• Berry, John F., "New Hope at Distressed Wire Service; Youthful Owners Set Out To Make UPI Profitable," Washington Post, October 3, 1982, p. M1.
• Day, Kathleen, "Financial News Network, UPI Are Put Up for Sale," Washington Post, November 8, 1990, p. B15.
• Farhai, Paul, "UPI's Fate Goes Down to Wire," Washington Post, November 16, 1990, p. C11.
• Friendly, Jonathan, "U.P.I. To Spend $20 Million To Improve and Expand Operation," New York Times, October 3, 1982, p. 40.
• "From Threatened to Just Threadbare, U.P.I. Adjusts to Buyout," New York Times, July 20, 1992, p. D6.
• "Geoworks Enters Agreement with United Press International To License News Content for Wireless Information Service," PR Newswire, May 5, 1998.
• Jayne, Micah, "UPI Hopes New Information Service Will Do Big Business with Big Business," Washington Times, July 27, 1994, p. B7.
• Jones, Alex S., "Mideast Broadcaster Acquires U.P.I. in Bankruptcy Court," New York Times, June 24, 1992, p. D2.
• "Key Dates in UPI History," The Associated Press, September 5, 1995.
• Lattin, Don, "Robertson Gives Mixed Signals About Religion's Role in UPI," The San Francisco Chronicle, May 15, 1992, p. A9.
• Lilling, Adam, "UPI's Latest Survival Strategy," American Journalism Review, September 1997, p. 15.
• Manning, Robert, "When U.P. Had No I," New York Times, June 12, 1982, p. 31.
• "Pat Robertson Backs Out of UPI Deal," Star Tribune (Minneapolis), June 11, 1992, p. 3D.
• Peterson, Iver, "In News Business, UPI Plans To Thrive in 350 Words or Less," New York Times, March 31, 1997, p. D1.
• Quigg, H.D., "UPI's Diamond Anniversary: From Morse Code to Satellites," U.P.I., June 19, 1982.
• Schuch, Beverly, "UPI CEO Interview," CNNfn Business Unusual, Transcript #98042102FN-112, April 21, 1998.
• "Suddenly UPI Is in Demand as 3 Groups Wrestle for Control," Chicago Tribune, June 19, 1992, Bus. Sec., p. 2.
• Sugawara, Sandra, "UPI Proves Too Much for Vazquez-Rana: Owner Hands Over Operating Control of Troubles Wire Service to Former Rival," Washington Post, February 21, 1988, p. A4.
• Tharp, Paul, "UPI Upgrades Wires Service to the 'Net,"' New York Post, March 20, 1998, p. 034.
• Tucker, Elizabeth, "Brian's Aggressive Plans for Troubled UPI," Washington Post, November 28, 1988, p. F37.
• UPI Corporate Website, United Press International, http://www.upi.com
• "UPI Eyes TV, Video Internet," AP Online, March 19, 1998.

Source: International Directory of Company Histories, Vol. 25. St. James Press, 1999.

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