This is the story of a magazine staff that refused to be sold.

The problem began early last month when McGraw-Hill Inc. decided to sell the prestigious but financally ailing Medical World News.

After entertaining and then rejecting several offers for the magazine, McGraw-Hill announced the sale of Medical World News to HEI Publishing, a newly formed company, for a reported $2.4 million. The new publishing firm was formed to buy the magazine by Hospital Equities Inc., a Houston-based group of approximately 80 prosperous and politically active doctors who own several hospitals.

The purchase was orchestrated by Frank Murray, former editor of Medical Tribune, a Medical World News competitor. Murray contacted the Houston group through a physician friend and convinced them to enter the publishing business. Murray became president of HEI Publishing.

After the purchase, Murray decided it would be more profitable to move the magazine's headquarters from New York City to Ft. Lauderdale, Fla.

It was here that everything began to unravel for Murray. The decision to move the headquarters triggered a whirlwind of events that eventually cost Murray his job.

The day after the announcement, editor Dorsey Woodson stepped aside and into another McGraw-Hill position. Robert L. Curry, MWN's publisher, informed Murray that he and his four-member sales staff were not willing to join the new organization but were interested in representing the sales and promotion needs of the magazine under their own newly formed company, World Wide Medical Communications.

Realizing the magazine could become an expensive white elephant without a sales staff familiar with the pharmaceutical sales market, Murray notified Dr. George Alexander, chairman of the board of Hospital Equities, who agreed to Curry's proposal.

The editorial staff, concerned about their own futures, as well as the future direction of the magazine, decided Curry's approach was a good idea. They formed a coalition and also demanded to negotiate collectively with Alexander for certain assurances.

According to Hara Marano, a MWN editor, the staff wanted the operation to remain in New York. They also wanted a benefits package comparable to the McGraw-Hill plan, and assurances that the physicians would not interfere in the the editorial product even if at times it was critical of doctors.

Alexander is "a man who could sell anybody anything," Marano said. "He seems to be a plain talker. . . . His word was very appealing to us." Writer Mark Bloom said he too was concerned about the "double specter" that might haunt a medical magazine owned by doctors and supported by drug advertisers. But Bloom added that Alexander "assured us MWN would remain independent," that the publication was purchased solely as an investment.

The employes got the benefits package they sought and were told the magazine would have a New York bureau although the headquarters remain in Florida.

At that point, individual writers and editors began negotiations for positions with Murray. It was an incredible week, reports Assistant Managing Editor Judie Groch. Nervous and disgruntled staff members were fighting for their jobs and packing up their offices while trying to put out the final McGraw-Hill issue of MWN. One employe commented that "they should pay us damages for turning a smooth operation into a mess."

Staff members say Murray's most outstanding miscalculation was assuming they would be willing to relocate. "Ft. Lauderdale is hardly the medical mecca of the world," one said. Many of the employes are long-time New Yorkers, and some were soon to have their pensions vested.

"These people who can run oil wells and hospitals didn't know how to negotiate the slippery world of publishing," explained another, grumbling that Murray had planned to run the magazine with only half the editorial operating budget available under McGraw-Hill.

Murray also failed to realize the dedication of the staff to a magazine they had seen go from a 100-plus-page weekly with more than 100 employes, to a still prestigious, though much thinner, biweekly put out by a staff of about 30.

Only a handful of writers and editors agreed to stay with the new magazine in New York, and no one would move to Florida. The new management became nervous as time to produce the next issue drew near.

For reasons not disclosed by Hospital Equities or HEI, the Houston doctors decided to dismiss Murray from HEI Publishing. The next day, Friday the 13th, Curry was asked to be president of the publishing company, and Reginald W. Rhein Jr., the magazine's Washington bureau chief, was appointed editor.

Murray could not be reached for comment, but a spokesman for Hosptial Equities said he might continue to do some work for that parent organization.

With both Curry and Rhein aboard, and the home base returned to New York, a majority of the former staff decided to stay with the publication. "My first priority was to keep the staff together . . . and make it [the atmosphere] as normal as possible." Rhein said.