Last minute bidders emerge for the AAP wire

Chris Pash
By Chris Pash | 27 May 2020
 
Getty

More potential buyers for Australian Associated Press (AAP) have expressed interest in keeping the national news agency going.

Among them is Finder, the comparison website, whose founder Fred Schebesta describes his interest as “preliminary”.

“Finder is always looking for new opportunities to better serve our customers and their needs," Schebesta told AdNews.

"As home-grown businesses built on quality content, we believe there may be synergies between both brands. Finder, like AAP, holds journalism – and the need to inform and educate – in high regard."

Insiders also say a second group, with backers in the US, is looking at AAP as a strategic investment and plan to contact AAP’s advisers at TMT Partners.

The emergence of new players follows several dropouts in the bidding process who backed off after the price became “too rich”.

Leaked bid documents indicate the owners of the newswire -- Nine, News Corp, Seven West Media and Australian Community Media -- are looking at a price of around $10 million, including provisions for employee entitlements.

However, Peter Tonagh, a former News Corp Australia and Foxtel CEO who heads another bidder, the impact consortium, says the data published in the Financial Review is old.

“This was from an earlier version of the investment memorandum that someone clearly leaked,” he says. “Those are no longer valid figures.”

The focus of the buyers is the national newswire, coupled with the press release service, Medianet, which piggybacks on the news service delivery.

AAP’s owners initially wanted to sell the profitable commercial pieces of AAP to fund redundancy payments for the 400 plus staff. They didn’t foreshadow such interest in the loss-making newswire.

The closure of AAP after 85 years has been greeted with horror by some, saying that it means a further concentration of the media in Australia and make it harder for smaller players to emerge.

The journalists’ union, the MEAA: “This decision will also devastate the media industry and the communities it serves.”

Any buyer of AAP will have to operate with the loss of two major customers. Nine and News Corp, are likely to disappear as the core consumers of the newswire and as major sources of revenue post a sale.

News Corp is already advanced in establishing its own internal newswire to replace the syndicated content supplied by AAP to its newspapers and digital assets.

This will mean any new AAP would need to cut overheads at the newswire while still maintaining enough coverage to keep current customers such as regional newspapers, broadcasters and digital news sites.

In 2019, AAP had revenue of $65.67 million, posting a small profit after a $10 million loss the year before. It has about 200 editorial staff.

The newswire and Medianet combined, without revenue from News and Nine, are said to generate around $20 million a year.

The apparent drop dead date for negotiations is June 24, the closure date for AAP.

The closure was announced in April, with AAP saying it was unable to compete with free information on the internet.

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