Remarks by Dean Singleton
Chairman/The Associated Press
AP Annual Meeting
San Diego, CA
April 6, 2009

This past year has brought about unprecedented change in our industry. Some of these changes are challenging, to say the least — such as the cutbacks and loss of revenue for many AP members
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And some are opportunities — like the growth of online news and new digital means of distribution. We should also be heartened by the intense public interest in significant, ongoing stories such as the Obama presidency and the global economic crisis.

We bring exciting news today for our industry. On Saturday, the AP Board of Directors unanimously decided to take all actions necessary to protect the content of the Associated Press and the AP Digital Cooperative from misappropriation on the Internet.

The board also unanimously agreed to work with portals and other partners who legally license our content and who reward the cooperative for its vast newsgathering efforts — and to seek legal and legislative remedies against those who don't.

We believe all of your newspapers will join our battle to protect our content and receive appropriate compensation for it.

AP and its member newspapers and broadcast associate members are the source of most of the news content being created in the world today. We must be paid fully and fairly.

We can no longer stand by and watch others walk off with our work under misguided legal theories. We are mad as hell, and we are not going to take it any more.

You will be hearing more about this important and exciting campaign in the coming weeks and months, but I wanted to share this with you today. I know all of you will be looking forward to playing a big role in this cooperative effort. 

But before we talk more about these changes and the ways in which AP is planning to help you, the members, I would like to pay tribute to Mary Jacobus, a deeply valued colleague who died tragically in February. Mary, who was the president and chief operating officer of The New York Times Company's Regional Media Group, had been a member of the AP Board of Directors since 2007. She will be greatly missed by all of us. Please observe a moment of silence to remember Mary and her contributions to our industry. 
Thank you.

First off, I would like to share with you the changes to the Board of Directors. Several directors will be retiring from the board after this meeting, each after completing a nine-year term: 
• Walter Hussman, of the Arkansas Democrat-Gazette;
• Julie Inskeep, of The Journal Gazette of Fort Wayne; and
• Bruce Reese, of the Bonneville International Corporation. 

Walter, Julie, Bruce, would you please stand?

Please join me in thanking them for their loyal service over many years.  I can tell you each has been an outstanding, committed and fully engaged director.
The election inspectors have certified that we had a quorum by the election deadline date, and through your votes and proxies you have re-elected three directors and elected four new directors. The re-elected directors are:
• Craig A. Dubow, of the Gannett Company;
• John Mitchell, of Vermont's Rutland Herald and Barre-Montpelier Times Argus; and
• Gary Pruitt, of The McClatchy Company.

The newly elected directors are:

• Elizabeth Brenner, of the Milwaukee Journal Sentinel and Milwaukee-based Journal Communications;
• David M. Paxton, of Paxton Media Group;
• Steven R. Swartz, of Hearst Newspapers and Hearst Corp.; and
• Paul C. Tash, of the Times Publishing Company and the St. Petersburg Times.

In addition, David Lord, of Pioneer Newspapers, has been re-appointed to an additional two-year term. 

Would all of you please stand while the rest of us thank you for your past and future commitment to serving AP and its members?

You each received a copy of the AP annual report today, which gives you an overview of a remarkable — although often tumultuous — year for AP, for our board and for our members.

2008 was an enormous and thrilling news year. But, it was also a year in which our industry faced increasing financial difficulties.

In response to this situation, as well as to the shifting landscape of how news is delivered, the directors have worked hard to revise the Member Choice newspaper product and pricing plan. The result is a plan that is much clearer, simpler and more flexible — and one that provides you additional and significant rate relief in 2010 to help during this tough economic period. 

The plan is called Member Choice for a reason — two reasons, in fact.

First off, it's based on your input and feedback. And second, it's designed to provide AP members with flexibility and customization that will help you to choose the level of content that best serves your needs, while at the same time enabling you to control your costs. 

Under the revised plan for 2010, there will be two services: Member Choice Complete, and Member Choice Limited. With Member Choice Complete, a newspaper has full access to all of AP's English-language reporting, including state and international wires, sports news and statistics, and financial news and statistics. Plus: analyses, profiles and fixtures in all news categories.  Search tools make it easy to identify the locally important content that matters to your readers.

Even though there is no reduction in the depth or breadth of the service in Member Choice Complete, rates for text will be 10 percent lower in 2010 than in 2009.

Member Choice Limited is an AP news report for newspapers with minimal national and world coverage needs, and includes your full home state wire and a small sports package. Rates for Limited will be 50 percent below 2009 text rates. 

Once you've chosen one of these two services, you can tailor Member Choice to suit your needs. For example, Complete customers can opt out of certain text news categories — and further reduce their rates. Limited customers can upgrade their service by adding one or more of the categories, which include Sports, Money & Markets and Lifestyles.

In addition, AP will continue to offer its supplemental services menu, with no increase in rates. This includes PhotoStream and produced online products.

Since not every member needs these products, it makes sense to exclude them from the basic text services, and so keep those rates as low as possible. 

Taking into account these variables, we foresee that members who choose to keep Member Choice Complete are likely to see total assessment cuts in the 8 to 12 percent range. Those who choose Limited service should see reductions in the range of 25 to 35 percent. 

Also as a direct result of your feedback, the new plan introduces an option for members to shorten the notice period for membership cancellation from two years to one. Those members who choose to continue with the two-year notice period will receive the added bonus of a 3 percent discount on their assessment
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Member Choice provides additional value for its members through flexible new licensing, increased coverage in key areas of growth and improved technological tools. Together, these improvements will enable you to use AP content to produce niche publications, weeklies, online products and other profit-generating products.

The revised Member Choice plan has already been tested in meetings with hundreds of newspaper editors and publishers. There was broad support for the plan's direction. We all believe it offers a balance between what you need now and the need to reliably fund AP's newsgathering and other services.
 
Last year, we announced at this meeting that there would be pricing reductions of up to $21 million for 2009. In fact, the rate cuts resulted in a total of $30 million being returned to the newspaper industry.

With this year's revised plan, we estimate an additional $30 million to $35 million in rate discounts to our members. These changes, along with the other revenue loss from U.S. newspapers, will bring AP revenue from U.S. newspapers down from $210 million in 2008 to about $135 million in 2010, or just 20% of AP's total revenue
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We feel it is critical to help our members during these extremely difficult times, and these numbers show our deep commitment to you.  They constitute a reduction in newspaper assessments of approximately one-third in just two years
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Think about these numbers for a moment.  AP newspapers have access to all AP news coverage, but next year will only pay 20% of the cost of gathering and producing it.  Where I come from, that's a great value proposition.

As a lifelong newspaper man myself, and as publisher of many daily newspapers, I share the pain our newspaper members are suffering.  I and the rest of the board are suffering, too.  Some great newspapers have closed, and others will likely follow.  Some newspapers are reorganizing through court filings, and others may do the same.  Some newspapers are cutting frequencies, others moving totally online.

We will all choose as best we can to find our own best solutions to this perfect storm of structural change converged with the most severe economic downturn of our lives.

But one thing is for sure.  However we restructure our own businesses, we must make sure that AP remains strong.  Your board is committed to doing whatever we must to preserve a strong AP!

As your chairman, I want to assure you that AP has been able to maintain a strong financial position, improve the competitiveness of its news report and add to its coverage options through such breakthroughs as AP Mobile news.  AP also has fully deployed the industry's leading new-media distribution platforms and all the tools that go with it.

AP has been able to achieve all these goals because it operates several successful businesses and remains debt free. We newspaper owners are the beneficiary of a well-managed cooperative that has diversified wisely.

Beyond the rate cuts and other achievements, it is critical that we recognize and appreciate the value that AP brings you, me and every American.

The AP news report remains the gold standard of newsgathering and reporting throughout the world. And last year showed that news was more important than ever.

From the presidential election to the Israeli offensive in Gaza, and from the White House to your statehouse, last year proved dead wrong those who claim that the power of original journalism has waned.

A few years ago, AP started to keep a tally of its journalists killed, harassed, beaten, detained or prevented from doing their jobs. Last year, that number totaled 62. It is not a profession for the fainthearted, or those who work in their pajamas. 

Beyond the news, as well, AP brings you other unique value propositions and special opportunities. You may not always be able to put a dollar figure on them, but they all add up to value you won't get anywhere else. Here to talk about some of these is Tom Curley.