AAP enters final stages of sale, will continue to operate but says some jobs will be lost
The AAP has found a new owner for its Newswire business, with Peter Tonagh and a consortium entering the final stages of ownership for the operation.
Although both Tonagh and AAP CEO Bruce Davidson say the sale will be a good thing for the future of independent reporting in Australia, there will be job losses associated with the new ownership.
The AAP has potentially been saved by a new deal
The AAP and the consortium of investors and philanthropists have reached commercial terms and entered negotiations for a binding sale contract which will be completed by the middle of June.
All other parts of the AAP Group will be retained by the current shareholders, including Medianet, Mediaverse, AAP Directories, Pagemasters and Racing operations. They will continue to operate as usual.
The new owners will continue to operate the business, providing breaking news, public interest journalism, sports coverage and news photography to Australian media outlets, maintaining the AAP brand.
AAP Newswire, Australia’s trusted, independent news source will live on after all. A consortium led by former News Corp chief Peter Tonagh secured the win for journalism in the public interest. Finally, a good news story for an industry that has taken a hit lately. #AAPNewswire pic.twitter.com/ULwoLhA2Lr
— Tony Gillies (@TonyGillies) June 5, 2020
AAP CEO Bruce Davidson said the expected sale was a great result for the maintenance of a pure news wire
service in Australia.
“I am pleased that, after months of discussions with various parties, it appears we have been able to secure a new home for AAP’s legacy of trusted news,” he said.
Tonagh said AAP will be supported by a group of investors and philanthropists committed to independent journalism.
“We live in a time where trusted, unbiased news is more important than ever. AAP has always delivered on that and we are committed to seeing that continue into the future,” he said.
“I’m looking forward to working with the AAP team to continue its great work and to find new commercial opportunities to ensure its long-term survival.
“On behalf of the consortium that I lead, after consulting with staff, customers and other stakeholders, our consortium will provide more information about our future plan for AAP.”
AAP CEO Bruce Davidson on the sale of the company. There will be job losses, but the wire lives on #saveAAP pic.twitter.com/BWiyUR9jqk
— Kaitlyn Offer (@KaitlynOffer) June 5, 2020
85-90 AAP staff, including around 70-75 editorial staff, will be employed by the consortium. 180 journalists were employed by the business at the time it was announced it would close.
The deal is still subject to final agreement, but a period of transition will be entered in the coming weeks and all employees will be consulted with regarding new opportunities. The consortium will continue to operate the AAP FactCheck service.
June 26 was meant to be the AAP’s final day of operation, but the closure was put on pause during the COVID-19 pandemic. It was then revealed that some buyers had expressed interest in the product, including Tonagh and his consortium. Australian Competition and Consumer Commission (ACCC) boss Rod Sims voiced his concerns that either Nine or News Corp could move to block the sale, should they desire to. News Corp has already announced the launch of its own news wire service which it says will be accessible by exterior media businesses also.
“If there is a bidder we’ll be watching to ensure there were no inappropriate impediments to sale,” Sims told The Guardian.
“AAP’s continuation is really important for media diversity and also competition. It’s clear to me that media startups and smaller media that want to get bigger, they do depend on AAP.
“If we want the main players to be constantly challenged, then having AAP around is a good thing.”
The AAP is currently owned by a number of shareholders including Nine and News Corp, alongside Seven West Media and Australian Associated Press. News Corp owns 45% of the business and reportedly pays around $10m for its services while Nine pays $5m annually.
Tonagh was outspoken when his bid for the business came to light that in order for it to continue it would need to be a marriage of both philanthropic and commercial ventures if it would survive.
Samuel Terry Asset Management managing director Fred Woollard and Australian Impact Investments managing director Kylie Charlton have also been named as part of the consortium, alongside approximately ten other parties.
The industry responded loudly to the initial announcement the AAP would close, questioning how newsrooms would continue to operate without the use of its reporting and what would happen to the journalists employed by the service. Media companies currently rely on the AAP’s reporters to fill gaps in their coverage, particularly across crime and court reporting.
When the closure was announced in March, The Guardian reported News Corp and Nine no longer wanted to pay for the service. AAP chair and News Corp executive, Campbell Reid, called the allegations ‘nonsense’ and instead blamed the big tech companies for taking money away from publishers.
“For The Guardian to peddle the theory that the newswire was cut in order to punish them is gobsmacking hypocrisy,” said Reid.
“It is one of the very companies that slashed the amount it was prepared to pay for AAP. It is one of the organisations whose decisions have contributed to the closure of AAP.”
The Media, Entertainment and Arts Alliance has called the sale a ‘vital win for the industry’.
MEAA media section federal president Marcus Strom said: “The proposed purchase will see the retention of up to 75 editorial jobs that just a week ago looked to be lost. Unfortunately, this change of ownership as a result of the decision of Nine Entertainment Co. and News Corp to no longer use AAP’s services will still lead to a loss of a number of jobs.
“AAP plays a very necessary role in news coverage for all Australians. Had we lost AAP, then we would all be the poorer. AAP Newswire provides journalism coverage in the areas that the other major news outlets either cannot or choose not to. Without it, our communities would be less informed and vital stories – from the courts to sports, images and breaking news plus many other areas – would not be told.
“MEAA said that it was short-sighted for AAP’s major shareholders to not fully appreciate the importance and value of the business they had owned for decades. It is fortunate that there were others who did recognise AAP’s worth which has led to today’s announcement,” Strom said.
“MEAA will be consulting with our members and will seek a meeting with the consortium’s management team to discuss the transition process so that we can continue to look after the interests of all our members across the AAP business,” he said.
Great news about AAP. With so many journalists losing their jobs as news outlets close, the country needs a valued news service like AAP more than ever.
It covers all major news and its presence will be a continuing boost to news coverage.
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Great news, and please stay independent and factual!
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That is such great news. So glad this very important independent news source is able to continue to support our democracy.
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Let’s see how this goes. AAP is absolutely vital to regional papers and a lot of thinly funded news sites, like The Guardian. Those businesses will have to pay if they want to keep a decent service, since most don’t employ many reporters. I doubt that Catalano and Co care much, so they might happily buy a cheap bundle from News Ltd, full of its usual news priorities. Which is bad news for people in Newcastle, Canberra etc.
It will be interesting to see whether Tonagh would challenge his former boss, Murdoch.
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