The new management team that assumed control of United Press International pledged yesterday to spend millions of dollars to revive the wire service, and estimated it would have a new business plan for the company within four to six weeks.
"It's a multimillion-dollar commitment," said Earl Brian, 45, chairman of WNW Group Inc., the firm that is now operating UPI. Brian said he is aware it will cost his company more than $1 million a month to keep the company running while a 15-member team draws up a new business plan.
During that period, everything will be "frozen," with no hirings or firings or changes in operation, said Paul Steinle, 48, who is the new president of UPI.
Brian said that after a business plan is drawn up, WNW Group will make substantial investments in UPI, with funds coming from Infotechnology Inc., another company of which he is chairman. Infotech has interests in WNW Group as well as companies that are active in computer translations, electronic mail, electronic data base marketing and electronic publishing. It eventually will become a minority owner of UPI, Brian said.
In addition, Brian said 30 to 40 institutional investors have indicated an interest in investing in UPI.
Steinle said that Mario Vazquez Rana, the Mexican publisher who lost millions of dollars on UPI after paying $41 million for it in June 1986, "had two options: to liquidate the company or to find someone else to run it." Vazquez Rana chose to grant WNW Group an irrevocable proxy for 10 years. Brian said the proxy gives WNW Group complete control over UPI, and that Vazquez Rana's shares will be diluted as other investors are brought aboard.
Brian said that cash was paid for the proxy transfer, contrary to earlier comments from his spokesman. Brian declined to say how much, and said the final amount is contingent on an audit.
The Wire Service Guild has speculated that the deal was structured to get around an agreement by Vazquez Rana giving the Guild the right of first refusal on any sale. However, Brian denied that, saying the deal was structured to protect WNW from financial liabilities.
During a meeting yesterday afternoon, Guild officials asked Steinle for a copy of the agreement with Vazquez Rana. They also asked him to reinstate the labor contract, which expired last year. Steinle said he would consider the request, according to Dan Carmichael, a Guild spokesman.
Steinle and Brian fought Vazquez Rana for ownership of UPI two years ago.
Steinle praised Vazquez Rana for pouring millions of dollars into UPI to keep it running. But Brian could not resist a jab at the Mexican publisher. When asked how the new firm would improve UPI's operation, he said, "We'll be doing it all in English."
The new managers said they hoped to resolve a legal battle with the former top editors of UPI -- Barry Sussman, Kim Willenson and Ben Cason -- in an effort to stop the divisiveness that has pervaded UPI in recent times.
The three editors resigned in November, and last month Vazquez Rana filed suit against them, charging them with breach of contract and accusing them of defaming the wire service. In a countersuit filed Friday, the editors charged that Vazquez Rana and his aides tried to interfere with the staffing and coverage of Central America, and the staffing of the 1988 Olympics and the political conventions.