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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