(Image: Tracey Nearmy)

The rapid-fire closure of Australian Associated Press (AAP) will be locked in by major shareholders News Corp and Nine when they get together at an extraordinary general meeting on Wednesday this week to change the company’s constitution and ban the delivery of its key services.

This notice of meeting was sent by company secretary Emma Luxford to AAP’s four shareholders on March 5, giving just six days’ notice to vote in this amended constitution which will enshrine the closure from June 26.

EGMs normally require 28 days’ notice, so the four shareholders are also being asked to sign this consent form for a quickie meeting that requires approval from 95% of the shares on issue. They’ll need the three biggest shareholders — News Corp and Nine with around 44% each and Seven West Media with 8% — to achieve this. The smallest shareholder is Antony Catalano’s Australian Community Media with just under 3%.

The key change is proposed on page 41 of the constitution under the section “supply of services to members”. The following two new clauses are being added:

49 e. From 27 June 2020 or any later date determined by the board:

(i) the company shall no longer obtain the service or supply the service to any person (whether or not they are a member); and

(ii) no person (whether or not they are a member) shall be entitled to receive the service.

There hasn’t been a lot of coverage on the financials of AAP although the Canberra-based Associated Press reporter Rod McGuirk claimed that it actually made a profit of $929,000 on revenue of $65.6 million in 2018-19.

That may be so, as the two controlling shareholders are believed to be upset at the amount they pay for the services — reported as around $8 million a year for News Corp and $5 million a year for Nine.

Besides this press release announcing the closure, News Corp and Nine haven’t been particularly forthcoming about the financial details, although both are expected to snap up some key staff and intellectual property.

For instance, AAP is a pivotal supplier of racing form guides for newspapers — and with News Corp’s growing presence in the gambling business through businesses such as racenet, odds.com.au and punters.com.au, it is expected to try and lock down ongoing supply arrangements.

The Australian reported this morning that News Corp is also looking to poach 30 current AAP staff and contractors to establish their own internal news wire.

In the case of Nine, there really should have been an ASX announcement spelling out the one-off costs of the closure and the ongoing savings.

It is worth sharing some of the most interesting pieces that have been written about the demise of AAP over the past week:

Interestingly, none of these pieces have been commissioned by News Corp publications. The Murdochs appear to be the chief executioners, driven by an apparent desire to not assist their smaller competitors, and their journalists are not allowed to ark up about the savage closure.

It is not too late for Nine, with its 44% stake in AAP, to vote against the constitutional changes proposed at Wednesday’s EGM.

At the very least Nine should explain itself — and the media should be allowed into the offices of AAP on Level 6, 3 Rider Boulevard in Rhodes, 16 kilometres west of Sydney’s CBD, on Wednesday morning from 10am to report on the details of what happens at the EGM.

And speaking of explaining themselves, why aren’t our politicians doing anything more than offering condolences?

Prime Minister Scott Morrison talked about the closure being “a sad day” and “a matter of real concern”, but there was no talk of a potential ABC rescue mission or investigations into the competition elements of the closure.

Anthony Albanese lamented the “massive void” that would be created and said “the Australian public will be less informed as a result of the decision today which is a great tragedy”.

Labor and the Senate crossbench could very easily establish a quick-fire inquiry to get to the bottom of the closure, including calling on the key executives and directors at News Corp and Nine who drove the decision.

Instead, we have the uncomfortable situation of Nine and News Corp picking the eyes out of the AAP carcass and making life a whole lot tougher for their competition.

As I wrote in Friday’s Crikey, the Australian Competition and Consumer Commission should be all over this situation from a competition perspective, including probing the contractual arrangements that flow from the carve-up.

Instead, it seems our political class are too scared to challenge the decision-making of Australia’s two biggest and most powerful media outlets, even when they threaten up to 600 jobs and undermine our democracy.

Stephen Mayne is the founder of Crikey and a shareholder activist.

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