Brief 'non-compete' period as buyers shape up for AAP

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A curious situation is emerging with the possibility of two AAP successors competing with each other for Australia's wire service business.

Australian Associated Press - established in 1935 by Keith Murdoch - was to have closed when major shareholders News Corp Australia and Nine Entertainment announced they were withdrawing support of the loss-making business.

News' announcement of an "internal" newswire to serve mastheads including The Australian, the Daily Telegraph and Herald Sun, was later broadened to allow talks with others needing the service, sparing the likes of the Daily Mail Australia website - reviled by major publishers including News for its low-cost competition - and even regional rival Australian Community Media from having to make other arrangements.

Complications have come with the emergence of a potential buyer for the wire service component (only) of the 85-year-old institution, backed by a consortium of philanthropists and investors and fronted by former News executive Peter Tonagh, following outcry over AAP's demise.

Nine's the Sydney Morning Herald has reported that with a sale agreement being negotiated, proposed terms would prevent News from signing customers for a six-month period, and says News "has not engaged with customers" since the AAP board signed an agreement with the potential owners. The paper quotes "industry sources familiar with the contract" between AAP and the consortium that News will be "unable to immediately poach customers from the revived AAP newswire".

What happens then remains a matter for speculation. In March, Leo Shanahan, media editor of News-owned national daily The Australian cautioned that without the business of its two biggest clients, a new owner would have to offer "an extremely competitive commercial deal" to win them back.

• The Australian Financial Review reported on July 3 that News head of merger and acquisition execution Tim Archer has been appointed to the board of the "old" AAP, assets of which include Pagemasters and Medianet.

Peter Coleman

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