AAP newswire lost $10 million before rescue deal


Australia’s oldest newswire company lost $10 million in the year before it was sold in an eleventh hour rescue deal, according to documents filed with the corporate regulator.

The annual financial report from Mediality (previously known as Australian Associated Press) reveal the parlous financial position it was in before major shareholders Nine Entertainment Co and News Corp Australia moved to close it down.

When AAP staff were informed in March about the closure of the newswire, the company was already on track to make a large financial loss.Credit:Phil Carrick

AAP’s core newswire service lost $5.4 million alone, with further losses from press release distribution service Medianet and editing unit Pagemasters, bringing the total loss to $10 million for the financial year. The loss was compared to a profit of $929,000 the year prior, which occurred after a major restructure. In 2018, the company posted a $10.5 million loss.

AAP was saved from closure by a group of philanthropists led by former Foxtel and News Corp boss Peter Tonagh after its previous shareholders Nine (owner of this masthead) and News Corp decided they would no longer subsidise the business. The group paid $1 for the newswire, which led to a $899,000 write-down in value in its financial results. Mediality was approached for comment.



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Veteran AAP executive Emma Cowdroy to lead newly formed newswire


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“The appointment of a CEO and any other leadership [of the newswire] is for the new owners of the consortium,” Mr Davidson said.

Long-standing editor-in-chief Tony Gillies is also expected to leave the business. Mr Gillies told staff on Thursday he could not expect the newly-formed newswire to support an executive of his level.

“As I reflect on my 16 years as your editor in chief, I feel nothing but pride for all we have achieved – news coverage to the highest standard, cutting edge projects, and the people we have attracted and developed,” Mr Gillies said.

AAP’s newswire is expected to be sold for $1 as early as this week 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. The consortium and the AAP board, which includes representatives Nine Entertainment Co and News Corp, agreed on commercial terms earlier this month and have been working to formalise a transaction.

The hived-off newswire will provide up to 75 editorial jobs and about 10 roles in management, IT and support and 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 after major shareholders Nine (publisher of this masthead) and News Corp first announced plans to close the wire.

A sale, should it proceed, will result in at about 60 editorial redundancies at the organisation and will not operate with more than $10 million in funding that it previously received annually from its major shareholders.

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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. The remaining businesses could still be sold, but there are no imminent plans.

Mr Davidson told staff on Wednesday that any formal transfer of the newswire operations, should the sale proceed, will not occur until July 31. All staff entitlements, including those moving to the new company, are expected to be funded by Nine and News Corp.



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