Australian Associated Press sold to consortium of investors and philanthropists at 11th hour

Newswire Australian Associated Press (AAP) has been sold in an 11th-hour bid by a philanthropic investment consortium helmed by former News Corp chief executive Peter Tonagh.

The deal was signed one day before the end of the subscription of majority shareholders News Corp and Nine and four days after the wire was expected to close, leaving 180 journalists, photographers and other staff out of a job.

Staff were told on 5 June that the wire would remain open in some form, after receiving a bid from the Tonagh-led group that “see this as a philanthropic venture and will have the patience to work on new commercial opportunities to aim for long-term viability”.

The new newswire, still called AAP, will launch on 1 August with 85 editorial positions. Staff will begin to be transferred immediately.

Staff who are not offered roles in the new wire will now finish on 31 July.

AAP chief executive Bruce Davidson announced the news in an all-staff email on Monday night.

“AAP has signed a formal agreement to sell the AAP Newswire to a consortium of impact investors and philanthropists,” Davidson said.

“I know this will come as a relief to us all: the past few months have been difficult, but we can now move ahead and transition our journalism to new owners.

AAP shareholders, led by News and Nine, announced in March that they planned to close the newswire, labelling it “unsustainable”.

AAP chairman Campbell Reid, who is also a News Corp executive, told staff at the time that he did not want to subsidise a breaking news service for their competitors, including newer players like Guardian Australia, which is an AAP subscriber.

The closure was originally slated to take effect from 26 June, but was postponed when the AAP board, which had not previously canvassed interest in the newswire, received bids from prospective investors.

The protracted sale process, which did not begin until after the closure had been announced, left staff confused about their redundancy entitlements.

Staff were told that only those who stayed until the 26 June closing date would be entitled to their full payout; when the prospective sale was announced that date was pushed back to an uncertain future date. Not all staff who have remained at the wire will be kept on by the new managers.

The sale has been met by a sigh of relief from wire staff, who started a campaign with the Media, Entertainment and Arts Alliance to save AAP.

News Corp has launched its own internal wire service, which began operating from Monday.

Nine and News Corp have retained control of other sections of AAP’s operations, including the subediting service Pagemasters, the Racing guide, and the Medianet directory service.

Most staff in the racing and copytaking, Pagemasters, and Medianet and Mediaverse sections will continue on with no change.

“I want to thank all AAP employees for the way you have endured the ‘roller coaster’ of events over the past four to five months,” Davidson said. “Throughout that time, you have continued to carry out your duties and hardly missed a beat. Thank you.”

Reid also thanked staff, saying they had “stayed true to the spirit that the news is published no matter what”.

“The board wishes the new team every success,” Reid said.

The new chief executive, Emma Cowdroy, said the sale has ensured the AAP newswire, “a little known national treasure, will continue to deliver news content for all Australians”.

“More importantly, the backers and the board are united in a vision to continue AAP’s critical role as the source of truly independent, unbiased national news,” she said.

“This is not only great news, but it’s vital for our democracy as public-interest journalism is more important than ever.”

Cowdroy said it was regrettable that the newswire would relaunch with a smaller staff, and said those decisions would be made as soon as possible.

“As CEO, my vision is for AAP to continue to be the best place for good journalists to write and publish news that matters to Australia, and the world,” she said. “We are fortunate to have Australian backers who truly believe in the value of independent journalism, its role in civil society and the impactful role that AAP can have in telling the stories of all Australians. AAP is essential democratic infrastructure.”