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AP Challenges Grow As Cost-Cutting Papers Look For Line Items To Slash

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imageThe Associated Press, a co-operative started by newspapers to share costs and news, has been getting cancellation notices from papers as large as the Minneapolis Star Tribune since its new rates were distributed in July and now the Spokesman-Review in Spokane, Wash., is challenging the two-year cancellation notice that’s part of the current contract. The argument, according to E&P: the new rate structure that starts in 2009 is actually a new contract and the paper should not be bound by the old agreement.

AP takes a different stance, as you can imagine, with spokesman Paul Colford telling us: “There is no new contract involved in what is a service upgrade. At the same time, the AP will be working with the Spokesman-Review and other papers to help resolve concerns they may have during the rollout of the new Member Choice packaging and pricing plan, which will provide newspaper members with greatly expanded basic news coverage.” (We’ll publish an interview with Tom Brettingen, AP’s chief revenue officer, Tuesday.)

More after the jump

AP says its outlets include 1,500 daily English-language U.S. newspapers and that most are members. The wire service also has considerable clients in TV, radio, international, and online. As of April, newspapers represented 27 percent of the co-op’s revenues; International (broadcast, newspaper services, etc.), 22 percent; U.S. broadcast, 17 percent; digital, 17 percent; non-member photos/graphics and tech services, 17 percent.

In a letter excerpted by E&P, a lawyer for the Spokesman-Review says the paper “will not be executing a new contract reflecting the changes as required by the AP in the new Member Choice program. … The new contractual arrangement represents a continued and material shift by the AP of separating services from the basic package so that some services will be available only by signing up for supplemental programs. Thus, AP services that formerly were part of a basic plan will now only be available through a supplemental plan approach. This dilutes the value of the basic Breaking News plan and constitutes a material change in the quality and breadth of the services offered by the AP under the basic contract.”

For good measure, the Spokesman-Review also claims local and state service has deteriorated and that the new rate is too high. One translation: we wanted more options and now that we have them, we have an early out. Spokesman-Review editor Steve Smith e-mailed E&P: “On that basis, the old contract will expire Dec. 31 and we’ll not sign a new one. In a sense, it’s not a cancellation at all, but a decision to decline signing any new contracts.”

Star-Trib: Meanwhile, reported that the Star Tribune has served its 2-year notice. For a sense of what readers their might be missing in 2010, the site counted 18 AP stories or photos in the Strib