NEWS AND VIEWS: Today's difficult decision separated from tomorrow's wise choice by fine line (05/31/98)

NEWS AND VIEWS

Today's difficult decision separated from tomorrow's wise choice by fine line

by R.L. Chomiak

NEW YORK - Eight years ago the parent company that owns Fidelity mutual funds bought about 120 newspapers in the Boston-Cape Cod area, and lost money on them ever since.

Until the FMR Corp. takeover, all the newspapers were either making money or breaking even. Last year Fidelity's net income was more than half a billion dollars, but as The Wall Street Journal of May 21 put it, the rich corporation's "tolerance for [the newspaper division's] struggles isn't inexhaustible."

As I read about the successful mutual fund company's unsuccessful venture into journalism, I kept thinking about the 34th Ukrainian National Association Convention in Toronto I had attended and watched the convention's battle over the remaining UNA publications, Svoboda and The Ukrainian Weekly.

There are parallels.

Neither parent, it seems, talked to the newspaper people before making changes.

Fidelity managers, for example, were sticklers for neatness and to them, newspaper offices were inherently messy. They sent memos to the journalists "ordering them," according to the Journal, "to clean their desks; even newspapers weren't supposed to be on the desks or cabinets." (This rule has since been relaxed; newspapers can now be placed on desks, but desks still have to be neat.)

At the UNA convention, the head of the Finance Committee and the organization's treasurer explained to the delegates how the half-million-dollar annual deficit in the operation of the newspapers would be reduced: by raising the subscription rate, reducing the frequency of publication, naming one editor to run both newspapers, cutting staff, and more. All this while the eyebrows of editors and writers present in the convention hall were rising higher and higher.

There also are differences.

Fidelity funds are bringing in nearly $6 billion in revenue each year, so as the Journal puts it, "the papers aren't a major drag" on the corporate profits. But recently the corporation sold one of its units that publishes three magazines, showing that its tolerance of losses has limits. The UNA, on the other hand, is down from the summit of its membership total, while the circulation of its flagship, Svoboda, has been shrinking steadily for nearly four decades. Without a solid base of insurance premiums, the UNA can hardly continue to subsidize such membership benefits as Svoboda, The Weekly or the Soyuzivka resort. Or the bowling teams. Or the scholarships. The insurance regulators won't let it.

At the Toronto convention, the debate on Svoboda daily vs. Svoboda weekly was reminiscent of some of the debates in Ukraine's Verkhovna Rada: big on emotional appeals, low on arithmetic (as in, if 2 minus 3, results in a negative number, what should we do to get at least a zero?) and clear evidence that few speakers had given any real thought to the issue.

Like the Parliament in Ukraine, the convention is the highest legislative body within the UNA. Parliament deputies and UNA delegates can defy evidence or close their minds to facts. And, as in Ukraine, the executive body of the UNA frequently fails to convince the legislative body to approve this or that policy, or rather fails to try hard enough and effectively enough to do this, to lobby the legislators.

In the case of UNA newspapers, there was little evidence that any joint creative solutions by bean counters and journalists have been tried. Instead, the insurance regulators require a cut in subsidy, and therefore the subsidy will be cut - with a meat cleaver.

As I watched the convention proceedings, I saw Anya Dydyk-Petrenko in an unenviable situation. She is both a journalist and a UNA vice-president. She wanted Svoboda to remain a daily, but she also felt her fiduciary responsibility to the financial institution she was re-elected to direct. In the end, it was her change of position - during the reconsideration of the vote on Svoboda's frequency of publication - that helped the bean counters get enough delegate votes to turn the oldest daily into a weekly.

And I, too, felt uneasy, watching the proceedings from the sidelines. I had no fiduciary responsibility, I had no delegate vote. But my association with the UNA, the daily Svoboda and The Ukrainian Weekly was approaching the half-century mark. The first job of my career (not counting the high school summers spent in a meat packing plant or the unpaid jobs in college publications) was at the subsidized Ukrainian Weekly and subsidized Svoboda. Yet I had just returned from Ukraine, where one of the goals of the project for which I worked (funded by American taxpayers) was to convince the journalists of Ukraine to give up the government subsidies of their media outlets, and strike out on their own; to exist and expand on advertising and subscriptions, without subsidies; to become independent in independent Ukraine.

The UNA, as the 34th Convention so clearly demonstrated, will have to reinvent itself. It will have to devote all its energies to selling more insurance policies - its main reason for existence - or else get in line to be swallowed by a fraternal organization that does it better. In the process, it could commission a poll: How many persons become UNA members just to get Svoboda or The Weekly at a $5 or $10 discount in the subscription rate? And it also could develop a business plan to make Svoboda and The Weekly self-sustaining before the next convention.

Svoboda and The Ukrainian Weekly can and should become independent, leading publications of the diaspora. Or, they can be house organs received by every member of the organization and paid for by the membership dues. Right now, I would argue, they are trying to be both, and failing.