The chair of the competition and consumer watchdog, Rod Sims, says any attempt by News Corp and Nine to block a potential sale of Australian Associated Press would “raise concerns” related to federal competition law.
A consortium of philanthropists, media executives and “impact investors” has lodged a bid to rescue AAP and about 500 journalist jobs, ahead of the newswire’s scheduled closure next month.
Former News Corp chief executive Peter Tonagh, speaking on behalf of the consortium, told Guardian Australia it was hopeful the bid would allow AAP to continue to operate its news service in the interests of regional and innovative players in the media market.
Tonagh is fronting the bid alongside Fred Woollard, the managing director of boutique investment firm Samuel Terry Asset Management, and Kylie Charlton, the managing director of Australian Impact Investments.
It is understood the bid is the only viable proposal to keep AAP from closing, but its shareholders – Nine, News Corp and Seven West Media – have yet to accept any offer.
The AAP board announced in March it would close the news service, established in 1935. At the time, Guardian Australia reported that AAP staff were told its shareholders no longer wanted to subsidise a breaking news service for their competitors.
Sims told the Guardian the Australian Competition and Consumer Commission would welcome the continuation of AAP “in some form”. He said ACCC did not support an individual bid, but that it would be problematic if any of AAP’s shareholders decided to shut the news service if a viable offer was on the table.
“If there is a bidder we’ll be watching to ensure there were no inappropriate impediments to sale,” Sims said.
“AAP’s continuation is really important for media diversity and also competition. It’s clear to me that media startups and smaller media that want to get bigger, they do depend on AAP.
“If we want the main players to be constantly challenged, then having AAP around is a good thing.
“Nine and News have said they would close AAP, and we’d be very concerned if they sought to block someone else trying to buy it. That would potentially raise problems under the competition and consumer act.
“We are not barracking for any particular bidder, but having AAP continue will be good for diversity.”
AAP is scheduled to close next month. News Corp has already announced plans to launch an internal news wire service.
“Clearly it’s a bit of a crunch time,” Tonagh told Guardian Australia.
“Essentially this is a consortium that is an interesting combination of philanthropists and impact investors. The reason that’s important in my mind, this is not a do-gooder venture where we … support it for the rest of its life.
“We think it probably requires philanthropy in the short term. It’s not suddenly going from not making money to making money overnight. We’re going through a transition in media and news does have value.
“We’ve been talking to the biggest names in Australian philanthropy ... we are going into this with a clear understanding there’s a demand for the service and there are organisations out there at the moment who are concerned the service won’t survive.
“[This is a] group of people who are saying journalism is incredibly important and we’re about to lose a whole heap of journalist jobs and we’re about to see a drying up of this stream of high quality news. We believe [keeping AAP viable] is important for regional news services, we believe it’s important for innovative news services.”
Tonagh, who ran Foxtel for two years until 2018, said he was confident of being able to strike a deal to purchase AAP.
“News [Corp] has made their position pretty clear and that is that it doesn’t make sense for them to cross subsidise their competitors.
“I guess we wouldn’t be here if we didn’t believe [we could strike a deal]. Our view is very clearly there are nearly 480 people employed by AAP and I don’t think anyone wants 480 people [to] be without their jobs right now.”
In a statement released on Sunday, Tonagh, Woollard and Charlton said their aim was to preserve media diversity and ensure ongoing coverage of court reporting, regional news and regional sport.
“The investors in our consortium know it’s a tough time to invest in the Australian media landscape, but they also know that if AAP is unable to provide a daily stream of high quality news, then dozens more independent news outlets are likely to fail.
“We think we can turn AAP’s business around, but we know that if we don’t try that hundreds of journalists will lose their jobs next month and Australia’s media landscape will become even more concentrated.
“We have raised a significant amount of money but the clock is ticking and the more money we can raise, from philanthropists, impact investors, and from government, the more jobs we can save and the more diverse the Australian media will be.”
