The directors of National Public Radio are scheduled this week to consider a novel plan to save the ailing United Press International news service by accepting it as a tax-deductible gift from its owner, E.W. Scripps Co.
Maurice Mitchell, chairman of NPR's directors, said yesterday that "Scripps is quite willing and, indeed, anxious" to give the money-losing agency to NPR if NPR can show it has the resources to keep UPI going for at least five years.
He said an analysis of UPI's financial condition by the consulting firm of McKinsey, & Co. will be presented to NPR directors at a meeting in Austin, Tex., on Thursday. He said the report was "quite conservative" about the possibility of UPI being restored to profitability. But even if it were not, it could be sold later to provide a cash endowment for NPR.
Estimates of the cost of carrying UPI for five years are as high as $50 million. That is far beyond the reach of NPR's current budget, which is facing reductions because of federal cutbacks, but Mitchell said he was appealing to corporations and philanthropic organization for funds that would keep a news voice alive and possibly help NPR as well. "It will take a lot of tooth fairies, but we're hustling," he said.
E.W. Scripps, the Cincinnati-based communications company that is the parent of Scripps-Howard Newspapers as well as UPI, has been trying to unload the money-losing news agency for more than two years.
Edward W. Estlow, Scripps' president, said that "we have been having talks with NPR," but he said the discussions were "exploratory" and could not be called negotiations. Estlow and Mitchell worked together when Mitchell was chancellor at the University of Denver and Estlow was a trustee.
Mitchell said he came up with the takeover plan because NPR faces long-term funding reductions in federal support and "doesn't want to go begging forever."
Ideally, he said, UPI would become profitable and become a permanent source of support for NPR; if not, it could be sold.
Scripps would donate the news agency to NPR, which would operate it as a commercial venture. Though the potential value of the tax deduction has not been revealed, it could be greater than the sale price the news agency would bring, according to publishing industry sources.
UPI, founded by E.W. Scripps in 1907, is an institution in American journalism. It provides news service to about 1,000 newspapers and more than 3,000 radio and television stations throughout the United States, and has trained generations of reporters and editors -- including Walter Cronkite -- who later achieved prominence in the profession.
It has been unprofitable for many years, however, and suffered an after-tax loss of about $4 million in 1981, according to industry analysts.
UPI officials said yesterday that negotiations for the agency's sale to Reuter News Service of Britain have collapsed. But they said there is no sign that Scripps is preparing to shut down UPI.
On the contrary, they said the company has embarked on a multimillion-dollar capital improvement program, which includes the changeover to satellite transmission of its dispatches, and is actively at work on planning for next year.
According to Estlow, Scripps is "interested in seeing UPI continue. We are also looking for a way to modify the E.W. Scripps Co. ownership in it." He said Scripps has had "discussions with a number of organizations but there have been no negotiations and no decisions."
"The ball is in the court of those organizations that have expressed an interest to tell E.W. Scripps if their interest is deep enough to start negotiations," Estlow said.