The controversial decision to kill Australian Associated Press (AAP) didn’t go to the full board of Nine Entertainment and was instead taken under delegation by management through the AAP board, Nine confirmed today.
Asked for commentary about the involvement of Nine’s directors, including chairman Peter Costello, Nine spokesperson Victoria Buchan told Crikey:
The decision on AAP was taken by the AAP board. Not the Nine board. Chris Janz is on the AAP board and the board made the decision in conjunction with the management based on the business and its future. You should direct any questions to the CEO or the chair of AAP.
As Crikey reported yesterday, a secretive meeting of AAP shareholders will take place at the company’s Sydney offices tomorrow to vote on a constitutional change which will lock in the closure from June 26.
AAP did not want the calling of this meeting made public.
Asked on Saturday if any shareholder meetings were being contemplated, AAP general counsel and company secretary Emma Cowdroy emailed back late yesterday morning saying:
As you are not a shareholder of AAP, I am not in a position to enter into further correspondence with you about these matters. I suggest that you direct your questions to the companies of which you are a shareholder.
I wrote to the Nine board yesterday asking that they vote to either adjourn the meeting or vote against the constitutional change in order to give the full Nine board time to engage on the issue and potentially explore a rescue or capital injection, now that the high-profile plight of the AAP business is publicly known.
For instance, given that Nine and News Corp are complaining about the reported combined $13 million-plus a year they are paying for AAP — which contributed materially to the circa $940,000 profit AAP reported last year on $65 million in revenues — it would not be unreasonable to explore an annual contribution of up to $10 million a year from the ABC to shore up the business.
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This could also be structured to have the added benefit of diluting the combined 89% stake controlled by News Corp and Nine, who are the two biggest media companies in Australia and are accused of acting like a duopoly to stymie the prospects of their smaller competitors.
AAP chairman Campbell Reid told Media Watch that “if someone wanted to make an offer, there is nothing stopping them”.
Normally, you would let it be known the business was available for sale before voting to kill it off.
Faced with pressure from the government over the Australian Competition and Consumer Commission’s digital platforms inquiry, has anyone even tried to get Google and Facebook to make a meaningful contribution to AAP, or come up with a mandated government funding model which delivered that solution?
The Nine board comprises only six non-executive directors, including Peter Costello, deputy chair Nick Falloon, Mickie Rosen, Catherine West, Patrick Allaway and Samantha Lewis.
On discovering what management has decided to do with their authority, surely some of them would be thumping the table and demanding to be involved.
According to Nine insiders, CEO Hugh Marks really values the fact that his Melbourne-based boss Peter Costello is a hands-off chairman. Too hands off, it seems.
When you own more than 40% of a business which has 600 staff and contributors, $65 million in revenues, 85 years of history and is a pivotal part of the media infrastructure in Australia, you would think the board would take an interest.
It’s not too late. The Nine board should direct management to delay tomorrow’s extraordinary general meeting until after a serious attempt has been made to bring in alternative funding sources, potentially from the Judith Neilsen Institute which told Crikey yesterday it is monitoring the situation.
As things stand, the AAP constitution allows News Corp and Nine to each appoint three directors, although there are only two currently serving from News Corp: chairman Campbell Reid and News Corp Australia CFO Stacey Brown.
The three Nine nominees who agreed with the News Corp representatives to shut AAP were Nine’s digital and publishing boss Chris Janz, executive editor of The Age and The SMH James Chessell, and Peter Williams, Nine’s CFO of digital and publishing.
If such a momentous decision was going to be taken, you would think that Nine’s CEO Hugh Marks would put himself on the AAP board and then own the consequences of one of the biggest blows to Australia’s journalistic infrastructure. Instead, he hasn’t been sighted anywhere and is yet to speak on the matter.
The same applies to News Corp Australia executive chairman Michael Miller who has left all the heavy lifting to Reid.
As for the Murdochs, where was the commentary offering condolences regarding the demise of a business founded by Sir Keith Murdoch 85 years ago?
Rupert Murdoch happily provided a foreword for John Coomber’s 2010 book, On The Wire, celebrating the 75 year history of AAP.
But when he stood by and allowed it to be killed in his name 10 years later, all we got was silence.
Stephen Mayne is the founder of Crikey and a shareholder activist.