The consortium that saved Australian Associated Press' newswire will get no return on their investment, with contributors donating anywhere between $3000 and $1 million at the close of the financial year.
Led by impact investor Nick Harrington and philanthropist John McKinnon, the new AAP will be run as a not-for-profit - without shareholders.
Only 15% of the consortium's 35 funders will receive some financial gain, investing upwards of $1 million in unsecured loans in the capital raise. For those who donated to the cause, the average contribution was around $100,000, Harrington revealed to Financial Standard.
The new AAP will continue what it has always done, McKinnon said; producing quality, independent journalism, but at a smaller scale.
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"The media landscape is changing dramatically and AAP needs to transform with that landscape," he told Financial Standard.
"Free from the constraints of big shareholders, it can be far more nimble and it can evolve to suit the changing landscape."
Those who have come out of the woodwork to publicly admit to donating - not investing - to save the newswire, include Samuel Terry Asset Management's Fred Woollard, Australian Impact Investments' Kylie Charlton and Wilson Asset Management's Geoff Wilson.
"As an investor, the strange thing is to put money in and there be no return," Wilson told Financial Standard.
"There is zero possibility of profit; I have no say, no influence and no return on investment with this donation. It came down to wanting to be involved in AAP surviving and supporting media diversity in Australia."
Over the next two to three months AAP will recruit a board representative of the Australian community, McKinnon said, including professionals from media, finance and law.
The 35 members of the consortium won't have any control over the news outlet, he said, with the company set up so that no one could ever benefit from a future sale.
"The company is governed by a constitution that very clearly spells out a charitable purpose, and the people who have donated money are relying on the members of the board to uphold that charitable purpose," McKinnon said.
Harrington, who will begin with the publisher as its head of strategy on August 4, said the concessional loans had been structured to support the business as it goes through this transformational period.
"Independence is at the heart of AAP and it will now be structured as a not-for-profit, so there's absolutely no investor ownership and lenders have no say in the business," he said.
The private lenders are impact investors who want to support the business and see it grow, he said.
"They bought into that independence and the role that AAP plays in providing media diversity and fact-based reporting," Harrington said.
"That's what they are supporting - and they are supporting that by way of either a donation or loan."
He is hoping AAP will be able to pay back the lenders over the next five to 10 years.
The idea of impact investors buying up and saving distressed media assets came up in casual conversation between Harrington and McKinnon over a year ago, the latter revealed.
"Over the last year I've had numerous conversations with people as media assets became distressed, as the increasing concentration and lack of diversity became more obvious, as the ABC budget was cut; it just became a bigger issue in my mind," McKinnon said.
"I had actually looked at some other media assets and wondered if it was possible to buy them... and then set them up as a not-for-profit or at least guarantee their independence through some mechanism."
Initially, the two impact investors had planned on buying the whole AAP business, including its Medianet and Mediaverse divisions; however, it rapidly became clear that McKinnon and Harrington weren't going to be able to raise enough capital before the outlet's closure date on June 26.
They subsequently pivoted to acquire only the AAP Newswire, with the new deal, framed as a philanthropic opportunity, receiving "a lot of enthusiasm".
Now, having saved the outlet from certain closure, Harrington said he hopes media owners see the investment as a "beacon of hope".
"I think this shows that there are different ownership models," Harrington said.
"I hope that more media owners consider transforming their businesses to be purpose-driven rather than for-profit. I am hopeful that people take a leaf out of our book and see that being purpose-driven and being mission-aligned is hugely important to society."
He disagreed that investors could have been motivated to donate to save the newswire for tax deduction purposes.
"Everyone's donated money for the purpose of saving the newswire," he said.
"It could have been any period of the year and I think we would have had the exact same response."
"Some of these donations are tax deductible - that's true - but they would have gotten a tax deduction if they donated to one of the thousands of charities in Australia," he said.
"This was seen as a good cause."