Australian Community Media awarded more than $10m in Covid grants while scaling back newspapers

Photograph: Mick Tsikas/AAP

Of ACM’s 138 publications, 86 were suspended during the coronavirus pandemic

Australian Community Media was awarded more than $10m by the federal government to continue publishing its stable of more than 100 regional newspapers through the pandemic, but even before the grant deed was signed it was closing or scaling back titles.

The company, which bought Rural Press group in 2018, owned 138 regional newspapers before the Covid-19 induced downturn.

By April 2020, ACM had announced the suspension of many of its regional mastheads. Its 14 daily papers continued, but many country towns were left without a local newspaper.

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The drastic measures by ACM and other regional media companies prompted the federal government to respond with $50m under the Public Interest News Gathering (Ping) grant scheme.

Announcing the fund on 29 June 2020, the communications minister, Paul Fletcher, said the grants were to help regional publishers sustain public interest journalism in the face of sharp falls in advertising revenue due to the pandemic.

“In the case of newspaper publishers the funding is conditional on titles which have been suspended recommencing printing, recommencing publications, and that will be a condition of the grant agreements which must be entered into before funding can flow,” Fletcher said.

“In the case of newspaper publishers, that funding is for print newspapers. And so where printing of newspaper editions has been suspended, that will need to recommence before funding can flow.”

News Corp, a major publisher of regional newspapers, decided not to apply for a grant and took many of its publications to digital only. But ACM, which bought Rural Press group in 2018, applied and received $10.46m.

Of ACM’s 138 publications, 86 were suspended during the pandemic.

But a freedom of information request by the Guardian has revealed that even before the first payment was made, ACM was backing off plans to resume printing many of its titles.

A spreadsheet sent to the department revealed ACM’s detailed plans.

ACM said it would return 23 titles in full; a further seven would be published less frequently – once a week – and 12 would become digital only. The rest were closed and were presumably not eligible for Ping grants.

The heavily redacted documents show that ACM’s grant was reduced to $10.46m as a result of these decisions, though they provide little clarity on how much ACM lost or the methodology used by the department to account for the reduced frequency or a digital return only.

In late August 2020 the department wrote: “Returning suspended mastheads to operation and to print is a condition of the PING grant agreement and reductions will impact the final grant offer (note the methodology is still to be determined).”

By September it had concluded that ACM would have its grant reduced based on the reduction in revenue on each publication compared with the projected revenue if it had continued as a print product.

“This approach would also apply if a grantee moves a print publication to digital,” one document says. “In the instance where the frequency of publication is reduced the grant amount is to be reduced by the decrease in frequency.”

The managing director of ACM, Tony Kendall, said more papers would have closed without the grants.

“The Ping grant has enabled ACM to keep more mastheads in operation than originally foreshadowed in our 2020 grant application.”

Further closures have followed since the grant deed was signed in November 2020.

The Nambucca Guardian and Bellingen Shire Courier, both slated to return as digital-only publications according to the documents provided to the department, have not been active since April 2021.

The Nyngan Observer, also slated to become digital-only under the grant, now diverts to the Dubbo Daily Liberal’s site, while the Wingham Chronicle diverts to the Manning River Times.

Others, such as the Crookwell Gazette and the Yass Tribune, appear to be produced in a central hub and have little, if any, local content.

The documents do not record the department’s reactions to these further closures or whether it has demanded that ACM return any part of its grant.

Kendall said ACM had maintained its journalist numbers under the Ping grant.

“ACM is still working on its final report regarding the grant but does not expect to have to return any money,” he said.

The company also received jobkeeper, but because it is not a publicly listed company it has not had to disclose the amount.

“It saved our business,” Kendall said.

In the past 12 months ACM has also announced the closure of three of its four print sites, in Canberra, Murray Bridge and Ballarat, after striking a print deal with rival News Corp to continue printing some titles.

The presses are being sold, raising further concerns about the long-term future of ACM’s regional empire.

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Kendall said it was not necessary to own presses to keep publishing and the company had long-term arrangements in place to keep printing titles.

The travails of regional media appear to have had little impact on ACM’s owner, Antony Catalano, and his business partner, private investor Alex Waislitz, who bought ACM for $115m in 2019.

The pair now have their sights trained on expansion into real estate focused publications and technology solutions to help real estate agents.

A firesale of the substantial property holdings of the Rural Press group is under way. In the first two years of Catalano’s ownership, 14 properties were sold, raising about $20m.

In 2021 the Ballarat printing site was sold for $6m, while the Canberra Times has moved to Civic, leaving its Fyshwick site ripe for redevelopment. In a recent interview, Catalano said a further 11 properties were under review and could yield a further $50m.

In August 2021, Catalano smashed real estate records in the ski resort of Mount Buller, paying $7m for an off-the-plan penthouse. This adds to his extensive portfolio in Byron Bay, which includes the Raes at Wategoes.

The pair have also been investing heavily in real estate technology companies, most recently $6m in the Propic artificial intelligence customer management tool.

Many of the Ping agreements covered a 12-month period and are due to finish. ACM’s ended on 16 November.

It remains to be seen whether there will be a further contraction of publications in the industry.

Kendall said the group remained committed to regional newspapers.

“ACM is constantly assessing the performance of its portfolio,” Kendall said. “Revenue has not recovered to pre-Covid levels but we remain committed to informing and connecting our communities. We have also launched the Northern Beaches Review and the Lismore City News during Covid.

“However, with the rising cost of newsprint it is evident that more government assistance will be required in the future if we, and other publishers, are to retain the vital role our journalism plays in regional communities.”

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