This was published 4 years ago
Australian Associated Press to be sold for $1
By Zoe Samios
Australian Associated Press' newswire will be sold to a consortium of investors and philanthropists for $1, but the group will put millions into the loss-making news agency to prop it up until it becomes profitable.
The AAP board and the consortium, led by former News Corp executive Peter Tonagh, are expected to formalise an agreement this week for AAP 2.0, which will include up to 75 editorial jobs as well as about 10 roles in management, IT and support and will cost the group more than $10 million to fund.
AAP chairman Campbell Reid and CEO Bruce Davidson announcing the closure in March, which will no longer go ahead.Credit: AAP
AAP boss Bruce Davidson told staff on Friday that once the deal was signed the consortium would make a "substantial announcement" which would include the details of the leadership team, structure of the enterprise and transition processes.
Major shareholders Nine Entertainment Co (publisher of this masthead) and News Corp Australia are expected to fund the entitlements of all staff. Mr Tonagh declined to comment.
AAP posted a profit in 2019 after a major restructure compared to a $10.45 million loss the year prior. The revived AAP newswire - which will operate separate from the more profitable parts of AAP business - will not have more than $10 million in funding that it previously received from Nine and News Corp.
Nine and News will retain the Medianet, Mediaverse, Pagemasters and Racing businesses, but Pagemasters will be a significantly smaller operation once News Corp brings sub-editing and production in-house, which is expected to take place in August. These businesses could eventually be sold, but there are no imminent plans.
The sale of the newswire, once it proceeds, will result in at least 100 editorial redundancies, but is considered a better outcome for the newswire than shutting altogether.
Nine and News Corp announced plans to close the newswire after 85 years in March, but the process, first revealed by The Sydney Morning Herald and The Age, was put on hold later that month after a number of bidders expressed an interest in buying the business. An alternative offer by Finder.com.au boss Fred Schebesta planned to employ 50 staff and was subject to further due diligence, sources said.