UPI – Perennial Second Banana to the Associated Press
The cooperative newspapers that owned AP had solidified their monopoly on this kind of economic news reporting by making it against AP policy for it to sell to more than one newspaper in each market. This had forced Scripps into the uneconomic step of beginning to put its own reporters in cities in which it had no newspaper or way to offset the cost.
The answer to this problem that Scripps arrived at was to create a competitor to AP. After some years, his United Press had a small number of correspondents in cities that were transmitting about 12,000 words of Morse code over leased telegraph lines to 369 newspapers.
In later years UP grew to be a worthy competitor to the AP, but throughout the decades always remained second in size and scope to the AP. What it lacked in AP’s deeper resources, it tried to make up for with a colorful focus on people and succinct lively reporting. It took pride in its scrappy reputation as the Avis to the AP’s Hertz and continuously over its long competition with AP scored many news scoops.
In the late 1920s, UP’s head briefly met with William Randolph Hearst to discuss merging with the Hearst newspaper chain’s competing International News Service, INS was having its own difficulties competing with the AP behemoth at the time. According to the history of UPI in the book Down to the Wire, written by Gregory Gordon and Ronald Cohen, Hearst is said to have replied, “You know a mother is always fondest of her sickest child. So, I guess I will just keep the INS.” However, in 1954, three years after Hearst’s death, the mother of INS was no longer in the picture. The merger went forward and the United Press became United Press International.
In the next two decades, UPI thrived. By 1975, it counted 6,911 customers. Its main revenue producers then were 1,146 newspapers and 3,680 broadcasters. Technology advances in computerization had brought teletype machine advances, but cost-saving satellite technology was still in the future.
After 1975, the continuing movement of advertising dollars from newspapers to television had begun to sharply reduce the number of afternoon newspapers in the country. This had an increasingly negative effect on UPI’s finances. In the late 1970s, UPI merger talks with CBS, National Public Radio, and other possible buyers went nowhere and Scripps’ executives went public with news that it was interested in a sale or other divestiture of UPI. By 1980, a quadrennial year with extra news expenses for both the presidential election and the Olympics, the Scripps chain was forced to underwrite a $12 million annual operating loss at its UPI subsidiary.
With no responsible parties in the news business stepping up to the plate with an offer to take UPI off its hands, the E.W. Scripps Family Trust, which owned the newspaper chain, began pressing for a sale of UPI on any basis. Beneficiaries of the Trust were Scripps family heirs. Trustees of the Trust, owing a fiduciary duty to the heirs, were increasingly concerned that it the Trust continued to own UPI, at some time in the future the trustees might be subject to up to $50 million in unfunded pension liabilities. They were also worried that lawsuits could also be brought by the heirs against the trustees for wasting the Trust’s assets by continuing to fund the losses of a wire service that no longer was essential for the Scripps newspapers to own.
Enter at this propitious moment, Douglas Ruhe and William Geissler. They bought UPI from Scripps for $1 in June 1982.