THE MEDIA BUSINESS; Washington Times Moves to Reinvent Itself

WASHINGTON, Jan. 24— When Wesley Pruden, the combative managing editor of The Washington Times, moved into the top editor's spot in May, he soon found himself discussing country music at an intimate lunch with President Bush.

That kind of political access has given The Times, after nearly a decade of publication, its own genuine, if limited, place in the capital's rich media mix.

"It's the other half of the political picture, and without it I found I would be missing a lot of what was going on in conservative thinking," said Stephen G. Smith, news editor of the Knight-Ridder Newspapers bureau here. "While its circulation is small, its influence is out-sized." Very Expensive Business

But The Washington Times has always been and remains a very expensive and unsuccessful business, losing an estimated $35 million a year.

Part of The Times's problem is being the city's second-ranked daily newspaper during a deep advertising recession. The market is dominated in circulation and advertising by The Times's more liberal archrival, The Washington Post.

Almost since it was started in 1982, The Times has seen its average weekday circulation hover at about 100,000, compared with nearly 800,000 for The Post. And The Times estimates that about two-thirds of its subscribers also take The Post, which gives advertisers only a very small audience that reads just The Times.

But there is also the problem sometimes delicately described in The Times building as "the ownership onus," referring to the paper's murky relationship with the Unification Church, the South Korea-based quasi-Christian sect headed by the Rev. Sun Myung Moon.

The paper is published by News World Communications, whose board is made up of Unification Church members but not Mr. Moon. Just why Mr. Moon's followers would finance cumulative losses thought to total $400 million or more remains unclear. Proselytizing for the Unification Church and influencing American foreign and domestic policy have frequently been mentioned.

But some at The Times say the overriding benefit to Mr. Moon and his associates is the prestige and perceived power that owning a newspaper read by President Bush gives them abroad, and especially in Asia, where they mainly operate.

"Do you think Reverend Moon would have been able to get an audience with Gorbachev if it weren't for The Washington Times?" one executive at the paper asked.

Under this scenario, what the paper says in its conservative editorials is less important than the fact that it exists, preferably as a profit-making, unsubsidized enterprise.

Now, in what would be a stunning business turnaround if it succeeds, The Times is trying to reinvent itself by expanding into non-newspaper ventures, installing experienced newspaper executives and de-emphasizing its connection with the Unification Church, whose members now account for about 10 percent of the paper's work force and are almost totally absent from top management.

"It is an uphill battle -- absolutely," said Ronald S. Godwin, the paper's 54-year-old senior vice president, who came to The Times in 1985 after working for the Rev. Jerry Falwell, the conservative religious leader. He became convinced that the paper needed professional expertise. Elusive Advertising

For instance, The Washington Times and The Washington Post are each negotiating with Publishers Express for the right to set up a large door-to-door delivery system to distribute magazines and advertising circulars in Washington's wealthy suburbs. Publishers Express is a private mail service owned by nine investors, including Time Warner Inc. and The New York Times Company. No decision has been made as to which of them will get the franchise.

The Times could conceivably use such a network to help it attract the lucrative grocery and retail advertising and discount coupons that it has so far found elusive.

In a key move, Mr. Godwin has hired as general manager Tony Webb, who had been a senior executive at The Atlanta Journal-Constitution. A new circulation executive has been hired from The Orange County Register in California. And the new director of promotion came from The New York Post.

Of the 175 original members of the news staff, which included many Unification Church members, only about a dozen remain. Josette Shiner, the deputy managing editor, is the highest-ranking church member in the news department. Continuing Subsidies

Implicit in the new business plan is an unhappy acceptance that because of The Post's dominance, The Times almost certainly cannot become a profitable newspaper.

Still, Mr. Godwin said its owners would almost certainly go on subsidizing The Times and its sister publications, Insight magazine and The World & I, even if they never turned a profit. And creating profitable businesses outside of the newspaper could help eliminate the need for subsidies.

Both Mr. Godwin and Mr. Pruden said they had encountered no interference in their jobs from the paper's owners. Mr. Pruden, who retained the title of managing editor after he succeeded Arnaud de Borchgrave as the top editor, does not deny that he sometimes rewrites articles to give them more punch -- a practice known as "Prudenizing" at the paper. But he said he was exercising an editor's prerogative, not following orders from Mr. Moon's associates. No Detailed Explanation>

As a private business, the paper offers no detailed explanation for the money used to pay for its annual subsidy, except that it comes from its owners' other profitable enterprises. Even top executives at the paper say they do not know where the money comes from, although they have a vague sense that most of it is from various businesses in South Korea, Japan and elsewhere in East Asia.

Dr. Young Whi Kim, president of News World Communications and The Washington Times, and Dong Moon Joo, executive vice president of The Times, have offices at the paper's headquarters and serve as on-site representatives of the owners. Neither Mr. Kim nor Mr. Joo were available for comment.

Photo: Wesley Pruden, center, managing editor of The Washington Times, at work in the newsroom of the somewhat controversial newspaper. (Michael Geissinger for The New York Times).