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The Final Chapter

When it appeared that United Press International was going to close down its worldwide operations in 1992, Alberto J. Schazin, former vice president for Latin America, wrote the following article for Pulso del Periodismo. We did not use the article then because a group from Saudi Arabia bought UPI. Now, UPI is closing its operations in Latin America, where it once served more news outlets than any other news agency. We are now using the article. You are invited to use it if you wish. Just give Pulso credit and let us know.

By Alberto J. Schazin

The closing of United Press International's Spanish-language news service marks the end of a historic chapter in journalism in Latin America, a key area in the development of what was once a vital innovative and independent news agency.

I was asked by John Virtue to write an article on the closing of UPI, whenever that occurred. As the invitation was made more than two years ago, there was always a negative resistance when I visualized myself writing it: the report on the end of the news organization where I dedicated 37 years of my life, starting in my youth when I dictated articles by telephone to provincial Argentine newspapers, and ending as vice-president for Latin America.

My objective reasoning told me that the end of the service had to occur. But I denied it. Just as I denied the possibility of abandoning the great brotherhood of UPI, which did I did in April of this year when, in a very personal and difficult decision, I resigned to join the newspaper La Nación in Buenos Aires.

As Pulso is a magazine by journalists for journalists, the idea was to draw some conclusions from my experience in a job that took me to all Latin American countries, some of which I worked in, and allowed me to know all the owners, editors and working journalists from all the media.

It's best to recall the origins of UPI, or UP, as it was then called.

It was founded June 21, 1907 by Edward W. Scripps, one of the giants of American journalism whose descendents, tired of covering UPI's losses and without the support of the U.S. news media, sold the agency to two unknown businessmen in 1982. A decade later, after two more changes of ownership, UPI was agonizing.

Scripps created United Press mainly to challenge the monopoly enjoyed in the United States by the older and stronger Associated Press. He wanted an organization that could provide the news independently and without restrictions to those who wanted it, and earn money in the process. The first two objectives were always met, but the profits started to disappear in the decade of the fifties. AP, a cooperative created by American daily newspapers, did not then have a mercantile objective, although it was well administered. On the contrary, it protected the monopoly of its original owners from the appearance of new dailies, refusing to sell them the service. Scripps created UP so that everyone would have access to the news. The word international was added to UP in 1958 when it absorbed the International News Service, a minor American agency.

Scripps' philosophy of breaking the monopoly not only was realized in the United States but also in Latin America and then the rest the world. During World War I, the great news agencies of the day, controlled directly or indirectly by their respective governments, had divided the world in areas of influence, almost always in accord with their geopolitical, economic or simply colonialist goals, a reality at that time. The cartel decided that the French agency Havas, the precursor of Agence France Presse, had Latin America reserved.

UP was a small American agency in 1916 and its international operations were even smaller. It had only one client outside of the United States, the Japanese agency Nippon Dempo Tsushin. Roy Howard, Scripps' young manager, always thought of creating a great international agency. That year he added a pair of clients in Paris and reached agreement with the Australian news agency to serve daily newspapers there and in Tasmania and New Zealand.

The Associated Press at that time did not want to defy the division of the world news market and never replied to a request from La Nación of Buenos Aires for the daily war bulletin from the German high command. Jorge Mitre, the publisher of La Nación, considered his newspaper (along with La Prensa the most important newspapers in Argentina) should also give the German version of events, something Havas refused to do because France was an adversary. Since AP ignored La Nación's request in 1915, Mitre contacted UP. The cable he sent was providential for the future of UP as a world agency since it permitted entry into South America in 1916 and to later project itself, thanks to newspapers in that part of the continent, as a powerful, international news agency. Remember that the American newspapers that UP served were not interested in – even less so than now – in-depth foreign news coverage. But client demands and rich contracts from Argentina and other South American countries obliged UP to produce such coverage, which it started to market not only there but in other regions.

Howard was impressed with Buenos Aires and the thriving economy of Argentina, a country that produced food and enjoyed the immigration of cultured Europeans. He signed an agreement with La Nación that produced an annual profit of $75,000. Upon his return to the United States, he visited the top executives of the AP in New York and suggested they also enter the Latin American market so that two news agencies independent of government could counterbalance the influence of the official Havas agency. But AP considered more important the alliance with the European cartel, which the war had hurt but not destroyed.

The agreement with La Nación started to collapse after two years and UP not only soon found itself almost without clients in South America but facing the AP, which in 1919 decided to enter the region, although in a strange way. AP started selling its news service La Nación as well as La Prensa , but compensated Havas for the income it lost.

After much effort, Jim Miller, then the UP representative in Buenos Aires, managed to convince Ezequiel Paz, publisher of La Prensa, to take a reduced news service, which opened the door for a contract worth $550,000 a year, considered to have been the largest amount paid by any single newspaper to one news agency.

The operation in Argentina soon extended to Chile, Peru, Brazil, Venezuela and other northern countries, thanks to submarine telegraph cables.

The pioneering efforts of UP in the United States, where it always competed for exclusive news stories with fewer financial and human resources than the AP, were extended to Latin America. But there it competed against more than one news agency.

Miller, Thomas Curran and William H. McCall were the vice presidents up until the decade of the seventies who really made UP the most important news agency in Latin America. Even now, with the loss of clients, reduced expenditures and personnel and anarchy in its Washington headquarters, Latin America, along with Asia, were the most prestigious operations and made a slight profit. To remember the triumphs of UPI's Latin American team makes one worry about involuntary omissions which might occur. Memory brings an image of Carlos J. Villar Borda, the great Colombian journalist and executive, covering the comings and goings of Che Guevara in the Bolivian jungle until t he guerrilla's death at the hands of the army in 1967.

The late manager in Chile, Roberto Mason, huddled under his desk and transmitted by telephone news of Gen. Augusto Pinochet's coup in 1973 while machinegun bullets pounded the walls of the UPI office. For 40 hours UPI was the only agency with an open news channel in a country blockaded by the military.

Pieter Van Bennekom, later president of UPI, raced north in his car after the 1985 earthquake in Mexico until he found a working telephone 140 miles north of Mexico City and gave the world news of the disaster. For hours his was the only eye-witness account.

Luiz Menezes transmitted the first telephotos from Brasilia in 1960 when the futuristic capital was inaugurated, an achievement about which the Brazilian press marveled.

Martin Houseman, a Chileanized American, was expelled by Salvador Allende without reason because the president wanted to close down UPI.

Germán Chávez, former Asunción correspondent, had an exclusive report on Juan Perón after he was exiled to Paraguay from Argentina in 1955.

Yours truly had a 10-hour beat over the AP with the military coup in Lima that overthrew President Manuel Prado in 1961.

I also remember the horrible embarrassment caused by a rookie newsman in Bogota who, trying to familiarize himself with a teletype machine, involuntarily transmitted a test item on the supposed assassination of Colombia's president. The Spanish news agency picked up and transmitted the erroneous news item.

The loyalty of the historic clients of UPI was marvelous, as was the solidarity shown by the agency towards them when political instability put them in a serious bind. This strengthened a relationship the likes of which I have never seen in any other journalistic operation.

Julio Mesquita, the late publisher of O Estado de São Paulo, recalled at an Inter American Press Associaiton meeting in 1986 that UPI used to advance money so that his family could live in exile in Buenos Aires after the dictatorship of Getulio Vargas had closed the newspaper.

When La Prensa was confiscated by Juan Perón, UP lost thousands of dollars by refusing to serve the newspaper, then operated by leaders of government unions. UP was forced to make drastic cuts in staff and expenses in the region.

UP always kept open a means of communication to help Agustín Edwards, publisher of El Mercurio of Santiago, overcome threats under the socialist government of Salvador Allende.

The Miró Quesadas in Lima recalled that the UPI manager, Hubert Cam, managed to transmit to the world a censured editorial that El Comercio was never able to publish when the newspaper was seized, along with other dailies, by the military dictatorship of Gen. Velasco Alvarado.

UPI helped those newspapers and journalists denounce the violations, while the agency's communication channels served to call the attention of the entire world to these crimes against freedom of the press, until they were reversed.

The low salaries, small staffs and long hours in UPI are known by everyone, as is the defense of independent news coverage. The antimonopolistic philosophy that created the United Press was mobilized in the 1970s in Argentina when the Peronist government prohibited UPI and AP from transmitting national news to Argentine media. UPI worked actively with equipment and advice to the nation's newspaper owners who did not want to be captives of the only existing agency, which was official one. Thus was born Noticias Argentinas and later Diarios y Noticias, the two private, independent Argentine news agencies.

Under the stamp of UPI, the news agency was involved in almost all Latin American countries with an influential and serious radio newscast which later was extended to television and still lives on in the memory of many. The Reporter Esso was a five-minute newscast four times a day, written with concise phrases for radio, easy to understand and, above all, trustworthy. Organized by Latin American journalists trained by UPI, the newscast showcased the most talented announcers and editors of the period.

The newscast was in the tradition of UP which, in 1936, became the first news agency in the United States to have a special service for radio, at a time when the AP did not want to get involved with a media considered to be a competitor by the newspapers that were the main owners of the agency.

UPI was the first organization in the continent to adopt the radioteletype and radiophotos, ending dependence on the slow and costly system of submarine cables and telegraph transmissions. The quality of the first photos, received on precarious manual receivers, was so poor that many times one had to consult the cutline to see what the subject matter was. They contrast with the present high quality, digitized color photos transmitted via satellite. The Unifax, the first automatic picture receiver, was revolutionary and is still in use, despite its obsolescence. The same was true of the compact 16-s portable picture transmitter, the companion of photographers at international football games, earthquakes, coups and presidential visits to remote countries.

Before it started its decline, UPI not only provided news and photos but also special articles, comic strips like Tarzan, Dick Tracy, Don Fulgencio and Ramona, as well as television film from UPITN.

Everywhere, but especially in Latin America, the fire sale of the international picture service to Reuters, the British agency, was a fatal blow to the worldwide operation. UPI was left with only half a service to offer at a time when the market for just news was saturated with other agencies, most of them governmental offering subsidized services, with no illustrations needed by the clients. Not only that, the agreement gave Reuters the contracts and the keys to open the doors to the world's major news organizations where, before, it had only been a secondary agency. This agreement was the stone on which UPI's epitaph was written.

Why is UPI agonizing? There were a series of events. First was the indifference of the U.S. news media to the fate of the company. Those of us who worked for UPI were brainwashed with the false belief that the industry would never again allow a monopolistic situation. The leaders of the U.S. media shrugged their shoulders when UPI was put on sale the first time in 1979, but they became sharp critics when Mexican entrepreneur Mario Vázquez Rana bought the agency in 1985.

The chaotic changes of ownership, the lack of investment in technology, reduced budgets because of losses, the slow but continued flight of talent, the dirty sale of company assets by unscrupulous owners, plus competition, did the rest. Many times I've compared UPI to another great name and image in the U.S. drive, presence and way of life: Panam, the airline that was unable to meet the competition and was grounded in 1991. If another sign of the times was needed, La Prensa of Buenos Aires, which made UPI a great international news agency, down to 12,000 copies a day and bankrupt, was sold in 1992 by the historic family that owned it to a group of young businessmen who will try to refloat it.

A sign of the agonizing state of UPI: there remain few physical assets. It is no coincidence that the only property owned by UPI in the world is the floor UPI occupies in Santiago, Chile. The only other assets are the employees who continue working in adverse conditions.

(Alberto J. Schazin is a consultant with La Nación of Buenos Aires)