Australia's newswire set for switch

Australian Associated Press will start a new chapter as a social enterprise next month while continuing its 85-year history of no-nonsense, fact-based reporting.

The newswire will transform at the beginning of next month after its sale from Australian media companies to a group of privately-backed philanthropists and investors.

Leading the group is foundation investor John McKinnon, who partnered with Nick Harrington to mount the successful rescue bid.

McKinnon said the new entity - which has attracted millions of investment dollars - will be a not-for-profit and free of influence from advertisers or investors.

"It's all about public interest, fact-based news, covering all of Australia," he told AAP.

"All those people that have donated money are doing it with a similar motivation that I was.

"They're believers in a diverse, independent, fact-based media and they thought that was a good thing to spend their philanthropic dollar on."

The investment won't save half the newsroom, however, with dozens of experienced journalists and photographers including senior editors informed they wouldn't have roles in the revamped organisation.

AAP had approximately 180 editorial roles at the start of the year and about 140 currently, but will have just 70 from next month.

McKinnon called the job losses "tragic" but inevitable given the decision by media giants and former owners, Nine and News Corp, to walk away.

"When you lose your two biggest customers, it leaves a pretty big hole in the funds you have available," he said.

AAP will maintain a small presence in all six states and Canberra, a New Zealand correspondent and a two-person production team in London.

McKinnon confirmed 35 Australian investors, including himself, have tipped in amounts ranging from a few thousand dollars up to a single $1 million donation.

Most have contributed figures "in the tens of thousands".

Without revealing specific individuals or amounts, McKinnon said a handful had made loans and a couple have pledged ongoing support.

To date, only a few have outed themselves as supporters: asset management specialists Geoff Wilson and Fred Woollard, Small Giants pair Danny Almagor and Berry Liberman, and McKinnon.

"It became a philanthropic deal to say 'we need to fund working capital for a few years until this business can be put in a position where it's sustainable itself'," McKinnon said.

"The final deal we did was 80 per cent philanthropy - grants and donations - and 20 per cent debt, highly concessional debt."

McKinnon said a business plan was being developed by new chief executive Emma Cowdroy and while paying customers were crucial to the model, there was no hard deadline on breaking even.

AAP's decision to apply for charity status - which has not yet been confirmed - will offer tax advantages, and its constitution will ensure public interest journalism was the organisation's foundation.

"It's very much in the very heart of the company," he said.

"We'll adopt strong, board-level policies to give the editorial team independence."

AAP appeared doomed in March when its owners announced their intention to shutter the company rather than look for a buyer.

Into the fray stepped McKinnon and Harrington, who lodged their interest in April and sealed the deal in June.

The pair met several years ago when Harrington approached McKinnon to help fund an African development project.

"Nick called me and said 'hey what do you think about AAP, is it worth trying to buy?'.

"That's when it became a live prospect that we could try to do something.

"I'd been thinking for a couple of years about the media sector.

"There are a lot of distressed assets, there's increasing concentration of media in Australia, it's increasingly partisan and it's a big issue in terms of our public decision-making."

The mixed subscription-philanthropy model is still attracting support from investors concerned with the concentration and contraction in the Australian media landscape.

"Since the announcement was made that we'd signed a sale agreement, we've had extra people come in after that," McKinnon said.

While AAP's business model will change with the transition to charity status, its distribution model for written and visual content will stay the same.

AAP acts as a news wholesaler to Australian media companies, providing coverage of news, politics, courts and sport.

McKinnon said he hoped to re-open a Darwin bureau, which will close this month as part of the cuts.

Despite the job losses, McKinnon hopes AAP will focus on "fact-based reporting, independent reporting" and "reporting from diverse perspectives".

"Reporting for all of Australia, not just the big cities on the east coast. Not just the white community. Those are the sorts of values I'd like to see," he said.

An interim board, including McKinnon, will grow in the next couple of months and include geographical, ethnic and gender diversity.

"We want a board that both has the expertise you might expect and the diversity that makes it representative of the Australian community," he said.

The door remained open to Nine and News Corp to return as subscribers, he added.

"We'd love them to. There's no barrier."