AAP customers off limits for News Corp newswire

Australian Associated Press customers will be prevented from signing a deal with News Corp Australia's newswire for six months under a proposed sale agreement with the new owners that is expected to be completed early this week.

Industry sources familiar with the contract between AAP and the consortium of philanthropists and investors led by chief executive Peter Tonagh said that News Corp will be unable to immediately poach customers from the revived AAP newswire and will instead run the content exclusively for its mastheads including The Australian, The Daily Telegraph and Herald Sun.

The AAP newswire could be sold to its new owners in a matter of days.Credit: AAP

News Corp, which is a major shareholder in AAP along with Nine Entertainment Co (publisher of this masthead), had been in discussions with some publishing customers about the licensing of its content before an agreement was made to sell the newswire. Existing subscribers to AAP include Guardian Australia, Daily Mail Australia, Antony Catalano's Australian Community Media and Seven West Media.

News Corp's newswire, which is expected to launch this week, is part of a major restructure and new digital-focused strategy that is being implemented by the Rupert Murdoch-owned publisher across national, metropolitan, regional and local mastheads. The newswire was initially intended to service News Corp's newspapers after the closure of AAP was announced in March, but discussions eventuated with customers that were concerned about the prospect of losing court and breaking news coverage.

Now that the AAP newswire is expected to continue, it will become a competitor to News Corp Australia's operation. Sources said News Corp has not engaged with customers since an agreement was signed between the AAP Board and the potential owners. News Corp declined to comment. Mr Tonagh declined to comment.

AAP's newswire was expected to be sold for $1 earlier this month to investors and philanthropists including Samuel Terry Asset Management managing director Fred Woollard and Australian Impact Investments managing director Kylie Charlton, who are being publicly fronted by Mr Tonagh, but the finalised agreement has been delayed several times.

Any formal transfer of the newswire operations, should the sale proceed, will not occur until July 31 and all staff entitlements are expected to be funded by Nine and News Corp. But despite keeping the business running, AAP content will not be used by News Corp or Nine's publications including The Sydney Morning Herald and The Age from July 1.

Once a deal is signed, Australian Associated Press' is expected to appoint long-standing executive Emma Cowdroy to the helm. Industry sources previously told The Herald and The Age that AAP chief executive Bruce Davidson is expected to lead what is left of the business - Mediaverse, Medianet and Pagemasters - while Ms Cowdroy will be appointed chief executive of the newswire.

Described as 'AAP 2.0', the new company will provide up to 75 editorial jobs and about 10 roles in management, IT and support. It is expected to cost the consortium more that $10 million to fund. There are about 140 editorial staff that remain at the newswire, as some staff took redundancies in March, meaning a sale will result in at about 60 editorial redundancies.

Nine and News Corp, under Mr Davidson's leadership, will retain the Medianet, Mediaverse, Pagemasters and Racing businesses. Pagemasters is expected to be a smaller operation once News Corp brings subediting and production in-house later this year. A sale of these assets could still occur.