Learning to Love—or At Least Appreciate—Those Bastards from the AP

Most newsrooms once had both UPI and AP teletype machines.

At a lunch of mostly retired journalists, the subject of the Associated Press came up. The AP had just reported its 2016 earnings:

NEW YORK (AP) — Earnings at The Associated Press shrank substantially last year compared with 2015, when the news organization enjoyed a large tax benefit that skewed its results. Revenue also edged downward, reflecting continued contraction in the newspaper industry and a stronger U.S. dollar that reduced the value of overseas sales.

Net income last year shrank to $1.6 million from $183.6 million in 2015, a 99 percent decline. The 2015 profit figure was bolstered by a one-time, $165 million tax benefit. AP’s 2014 net income of $140.9 million was also boosted by a large non-recurring gain from the sale of a stake in a sports data company. In 2013, net income at the AP — a nonprofit news cooperative — was $3.3 million.

Although AP’s 2016 profit was slightly less than half that of 2013, AP chief financial officer Ken Dale said last year brought the company’s net results “back to more normal levels.”

Dale said he was focused on other measures of the company’s financial health. “We feel like we’re financially stable, we have no debt and we continue to generate positive cash flow,” he said. AP ended 2016 with $24.7 million in cash and equivalents, down from $50.6 million the year before.

Revenue at AP, which reported its earnings Wednesday, dropped 2 percent to $556.3 million in 2016. The news agency gave some papers lower rates in exchange for longer contracts, Dale said. The number of U.S. newspaper customers didn’t change much.

The five of us agreed that the AP is very important to the future of journalism. In the digital age it’s the go-to source for nonpartisan, no-spin coverage and newspapers and broadcasters depend more and more on it for solid national and international coverage. And we agreed that the AP is the best hope for maintaining decent coverage of state politics. As the profits of newspapers have dropped, the first cuts often have been their coverage of state government.

The only surprising thing about these feelings might be that all five of us—Ron Cohen, Wes Pippert, Bill Mead, Mike Feinsilber, and me—once hated those bastards from the AP. We had started our careers at UPI back when it was the feisty, proud underdog. UPI was owned by Scripps-Howard and it didn’t seem a fair fight to have to compete against the AP, owned by its member newspapers.

The AP bureaus usually were adjacent to the newsroom of the city’s biggest newspaper, giving its staffers easy access to all that newspaper’s coverage. In Detroit, where several us worked, the AP bureau was alongside the newsroom of the Detroit News while the UPI bureau was in the Detroit News parking garage.

UPI was capitalism at work—we worked hard to convince newspapers and broadcast stations to buy the UPI wire because we were better, more agile, less bureaucratic. To us that newspaper cooperative ownership seemed almost un-American.

It was a good fight for a lot of years—good for journalism, good for a lot of careers. But by the mid-80s, UPI had pretty much lost the battle, done in partly because many big newspapers which had subscribed to both wire services dropped UPI in favor of the supplemental wires that became available from the New York Times, Washington Post, Los Angeles Times, AFP, and Reuters.

Now we old UPI alums respect and admire the AP. If journalism is going to continue to do its job, the AP has to continue as its high-quality, no-spin foundation. In 2003, Joan Kroc, the widow of McDonald’s Corporation founder Ray Kroc, left National Public Radio $200 million in her will, helping it to grow and improve its coverage.

It’s something for the titans of the digital world, who have decimated print journalism, to think about: Some Joan Kroc-type backing would allow the AP to improve its coverage of state and national government, strengthening the foundation of nonpartisan, no-spin journalism. Think about it, Mark Zuckerberg and Bill Gates.


  1. Richard Mattersdorff says

    Thanks for this post. I’ve long wondered if wire services are boosted by the closing of newspaper bureaus. Are AP profits, some or all, distributed back to its newspaper members?

  2. Richard – The AP is a cooperative and if in some years they have more income than expenses I think the “profit” is retained as a safety net or reinvested in the service. – Jack

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