Sometimes First, AIways Second

By William A. Henry III.

Can U.P.I.--the Avis of wire services--keep its motor running?

The bulletin from Manila scored a clear beat for United Press International: Correspondent Max Vanzi, who was on the scene, was thus able to report 3 1/2 hours ahead of his Associated Press rivals, who depended on government spokesmen, that Philippine Politician Benigno Aquino had been shot down moments after returning from exile. Yet when the declarative U.P.I, report and a hedged, uncertain A.P. bulletin came over the wire to the Washington Post shortly after 2 a.m. two weeks ago, editors decided to play it safe and put into their final edition a story saying only that Aquino had been arrested on arrival. Without their own reporter present, Post editors were just not ready to rely on any wire-service account.

The Post's reaction underscored the dilemma of the Avis of wire services: U.P.I, cannot outstrip the dominant A.P. except by showing enterprise on stories; yet when it does, clients chafe that its ambitions may lead to carelessness with facts. Post Foreign Editor Karen DeYoung said that "it made no difference" that the assertive report came from U.P.I, rather than A.P. Still, quite a few news executives share the judgment of William Greer, associate news editor of the Miami Herald: "U.P.I, has had a reputation for shooting from the hip." Adds Greer: "They have done a good job the past couple of years overcoming that."

Even so, if the past few years have been mortally difficult for second papers--only 29 cities still have fully independent, competing dailies--they have been almost as perilous for the second wire service. U.P.I.'s longtime owners, the Scripps and Hearst newspaper chains, were anxious to sell; they were absorbing annual losses of up to $7.7 million. At times it seemed that newspapers kept buying U.P.I, just to maintain a competitor for A.P. (which draws 1,299 of the 1,704 U.S. dailies, vs. 629 for U.P.I.). Says Executive Editor David Lawrence of the Detroit Free Press: "We felt that if A.P. were the only game in town, it would be easier for it to become a little arrogant."

Securing a buyer for U.P.I, was not easy. The owners offered it first to a consortium of U.S. newspapers, next to the British-based Reuters news agency, then to National Public Radio, before finding controversial new proprietors in June 1982. Buyers Douglas Ruhe and William Geissler had minimal experience in journalism, but plenty in political activism: Ruhe, 39, was twice arrested for civil rights protests in the 1960s, while Geissler, 37, spent almost a year in federal prison for refusing to be drafted during the Viet Nam War. Both had been publicists for the little-known Baha'i faith, a Unitarian religion, founded 120 years ago in what is now Iraq, that claims 3 million followers. Furthermore, the two Nashville businessmen admittedly had little wealth, but refused to discuss the financing of their purchase of U.P.I. Insisted Ruhe at the time: "No one is behind us." As an unintended admission of unpopularity, that statement was uncomfortably true: their home-town Nashville Banner immediately dropped U.P.I, because of the furor.

Things got worse. The Denver Post decided it could do without U.P.I. The Dallas Morning News also dropped out, claiming that it was being charged more than competitors. Other papers, including the New York Daily News, exacted costly concessions. Ruhe and Geissler did not help their cause much when they spoke to the American Society of Newspaper Editors in Denver last May about why newspapers should subscribe to U.P.I. Said Robert Maynard, editor and publisher of the Oakland (Calif.) Tribune: "They shot themselves in all four feet with one bullet."

The climate of opinion about the service has improved since then. Among the pluses cited by editors: coverage of the White House, Poland, sports statistics and disasters, a traditional U.P.I, strength. In response to competition from the services offered by major papers, U.P.I, has shaped its appeal to smaller clients: the Manchester (N.H.) Union Leader praises the new owners for adding a New Hampshire photographer.

U.P.I, still has the deep-seated problem of persuading editors that it is both credible and necessary. The owners have been more aggressive in cutting long-range costs: transferring editorial headquarters from New York City to Washington and financial operations to Nashville; spending $10 million on satellite hookups to save on telephone transmission; marketing computer services to newspapers. To work on the credibility problem, Ruhe and Geissler recruited executives William Small, a former president of NBC News, and Max McCrohon, a former chief editor of the Chicago Tribune. While cutting administrators, U.P.I, has added 20 news and eight photo bureaus and more than 50 editorial staffers, and beefed up its broadcast news-wire service.

U.P.I, is still losing millions of dollars a year, but the owners say that the numbers are improving (because the company is privately owned, its books are closed).U.P.I, gained a net of six newspapers this year, and says the second quarter was its best ever for new business: $11 million. Predicts Ruhe: "I think we will break even by the first quarter of next year." Contends Geissler: "From a business standpoint, the turnaround of U.P.I, has been done."

Financial analysts remain skeptical.

Says John Morton of Lynch, Jones & Ryan: "U.P.I, is like a second newspaper--dispensable." In any case, even Ruhe and Geissler admit that U.P.I.'s hopes rest on the question of how many editors share the journalistic judgment of Michael Fancher, managing editor of the Seattle Times. Says Fancher: "We cannot live without A.P, but we equally cannot live with only A.P." --By William A. Henry III. Reported by David Dawson/Memphis and Janice C. Simpson/New York

With reporting by David Dawson, Memphis, JANICE C. SIMPSON, New York This file is automatically generated by a robot program, so viewer discretion is required.