Milt Benjamin's 1987 Take on 'New' UPI



Here's an article by former UPI president and chief operating officer Milton R. Benjamin that appear in the May 1987 edition of presstime:


(Editor's note: After about a year as a consultant to United Press International owner Mario Vasquez-Rana and five months as president and chief operating officer if the troubled wire service, Benjamin quit April 1 (1987) after disagreements with Vasquez-Rana over the path UPI should follow to regain viability. Benjamin has since returned to his Washington, D.C., consulting firm, Anderson, Benjamin, Read & Haney, which no longer is advising the UPI owner. Benjamin was asked by presstime to describe what he thinks UPI must do in order to survive.)

AN INSIDER'S PRESCRIPTION FOR CURING UPI'S ILLS

In early January, the CBS News program "Sunday Morning" tooka nostalgic look at UPI and its struggle to survive. Walter Cronkite, a war correspondent for the old United Press in his pre-CBS days, opined that "it's the breaking news story that is important--the ability to check one service against another. . . . I think this is a very important service in keeping newspapers accurate . . ." Added CBS correspondent Charles Kuralt: "For journalists, UPI plus AP stands for a system with built-in checks and balances."

Well, sorry friends. The American newspaper industry has done is own new math on that equation and come up with a different answer. If the desirability of across-the-board competition with The Associated Press is to be the raison d'etre for UPI's survival, the battle is over.

That is not to suggest no role remains for a new UPI. A UPI for the 21st century--with more experienced foreign correspondents, extending a U.S. journalistic presence to more world capitals than any newspaper or group can aspire to staff on its own--could well be of greater value than ever. Aren't the second and third tier of international capitals, after all, precisely where editors would welcome an earlier on-the-ground American reportorial presence when news breaks? Even in capitals where the AP is also present, aren't sensitive international political and economic stories exactly where editors most want a second (and preferably a third) version of the news?

An equally important role could be staked out by a new UPI at home. Again, it lies in coverage of government--in Washington, of course, but even more usefully inthe 50 state capitals. Beyond the indisputable need for more consistent and comprehensive coverage of executive branch agencies, the real opportunity lies in providing readers with a better view of how local political and economic challenges are being dealt with around the country. Which editor felt, as his state grappled with the liability insurance crisis last year, that he had an adequate perspective on how other jurisdictions were coping with the problem--or how his state's approach related to actions at the federal level?

But couldn't the AP do all these things if its members wanted this type of coverage? Of course. But if having a competitive reporting presence aggressively covering the news makes sense anywhere, most editors would vote to have a second set of journalistic antennae probing the nooks and crannies of local, state, federal and foreign governments.

The new UPI could be the extremely competitive source of this "high value" information--and at a considerably lower cost to newspapers than what most subscribers pay for America's second wire service today! My guess, based on discussions with editors and publishers of small as well as large newspapers over the past six months, is that many would be buyers of this type of "premium" top-end news service--including many who do not currently subscribe.

UPI's problem with its present positioning is the market, however, is that newspapers are being asked to write checks for an amount that comes all-too-close to their AP assessment for something editors want but for which publishers aren't willing to pay: competition in covering nuts-and-bolt stories.

INFRASTRUCTURE BURDEN. The reality of the 1980s is that U.S. newspaper publishers, large and small alike, no longer are willing to pay the freight for more than one news service of record to chronicle every two-alarm fire and fatal auto accident that occurs each day across America. And maybe that's not so bad. In an era where few newspapers directly compete and many are targeting their own resources on increasing the quality of stories rather than the quantity, one news agency giving a daily carpet sweeping to America, picking up every piece of lint on the landscape, may well be sufficient.

Most large newspapers--the papers that pay a disproportionate share of the cost of running a news service--largely don't run those limited-interest local stories anyway. And notwithstanding the loyal but mistaken belief of too many UPI salesmen that it is still possible to sell displacement, the small one-service newspapers that rely on the wire for those nuts-and-bolt local stories have largely gone AP to stay.

But if you are UPI, continuing to cover those locally-important-but-generally-of-little-national-value stories in all 50 states imposes infrastructure requirements that in aggregate leave you with an unsupportable cost structure. For starters, you wind uup maintaining news bureaus in far more cities than makes any sense economically. In New York state, for example, the daily flow of major news obviously mandates strong bureaus in New York City and Albany. But how do you rationalize the cost of maintaining bureaus in three other New York cities,while trying not to explode at the pressure to open one in Poughkeepsie?

Multiply that by 50 and you quickly come up with an imposing number. Then factor in the need to staff a significant number of the bureaus from dawn to midnight to make regular "check" calls and to take the phoned-in stories from stringers. (Don't think electronic carbons are the solution to this problem; someone still has to read and process the stories received this way.) Now you are up to a pretty substantial force of reporters and editors just to support UPI's infrastructure.

Even worse, most UPI newspeople today rarely leave the bureau to actually perform the kind of "premium" reporting that editors would buy as an add-on to what they get from the AP. Don't get the idea that UPI staffers are anything but the hardest working reporters and editors in America. UPI staffers are always hustling. But what keeps them occupied? Grinding out rewrites of local stories, packages of briefs, and updated headlines for rip-and-read radio stations.

That, ultimately, is the killer. No radio station is too small, its location too remote, its management too disinterested in news, for UPI's sales staff. In the competitive frenzy to keep potential clients--any clients--from falling into the clutches of the AP, they are encouraged to sign up every available pennies-a-week radio customer, ignoring the fact that each nickel of revenue adds dollars in costs to UPI's infrastructure.

Unfortunately, and I say this with sorrow because radio stations for years formed the loyalist core of the UPI client base, my new UPI would get out of the low-end radio market. Leave the rip-and-readers to the tender mercies of The Associated Press. Major market radio and television stations are another matter entirely. Their news interests and requirements are similar to those of newspapers. UPI serves this high-end broadcast market today better than the AP, and it clearly makes sense to continue to do so.

NEW DIRECTORS. But doesn't this strategy imply a very different UPI--a new UPI more focused on government and economics coverage? Of course. The new UPI's reporters still will be eager to cover major breaking stories. (Ever seen a reporter who wasn't?) But the difference is the new UPI may not--probably not--move the first bulletin on a major train-wreck in Oklahoma, though its coverage ultimately, may well be better than ever. And the new UPI will not beat the AP by six minutes on a double-fatal auto accident in North Dakota. It may not ever cover that story at all.

Doesn't this strategy also suggest a much smaller UPI in terms of total editorial staff? Absolutely. But the new UPI would evolve into a more-experienced, better-paid news service, with staffers in every state capital, selected economic centers, and about 50 major cities around the world. And notwithstanding the reduced body count, the new UPI would actually be doing far more original reporting than either today's larger UPI or the AP.

What about traditional UPI strengths such as sports and photos? Here, the future must be determined by the marketplace. As superior as these services may be, both are priced today in a manner not directly tied to the cost of production. If enough newspapers were willing to subscribe to these services at a price that would yield, a profit, there would be no reason they shouldn't be part of the new UPI. If not, the marketplace would have spoken--and it ought to be heard. No future exists for UPI divorced from the realism of the marketplace.

Unless it can find a new role that forces newspapers to buy the service as an indispensable information resource--and not as an act of charity--on what basis can UPI succeed? Will publishers and editors long want to buy and print a privately owned, stand-alone news service kept alive for some motive other than return on investment? I doubt it.

But from months of conversations with editors and publishers across America, I am persuaded "high-value" coverage of government and economic news in all 50 states, Washington and around the world is an editorial product for which there is a demand. I am convincedthe new UPI could produce and successfully market such a report at a price that would yield a profit.

But getting from here to there requires thinking about the new UPI in a new way--by publishers and editors, by UPI's editorial and sales staffs, and by its owners. Even then, success would hardly be guaranteed.

Nothing is more difficult than successfully repositioning a product in the marketplace. But absent such an effort, there simply is no hope of stanching the bleeding. And while American publishers and broadcasters owe Mario Vasquez-Rana a vote of thanks for keeping the patient alive, I see no chance for ever unhooking UPI from its present life-support system unless it steps up to the radical surgery that might yield a healthy future.