Section Agence France-Presse du Syndicat national des journalistes |
SNJ-AFP |
Agence France-Presse Branch of the French National Journalists' Union (SNJ) |
The Company & Staff Institutions
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What is AFP?
Basic facts about AFPAgence France-Presse, originally founded in 1835, is one of only three truly global news agencies, companies dedicated to gathering general news wherever it happens in the world and to providing the resulting information as a bulk service to client papers and other media around the world. Like its US competitor Associated Press, but unlike Reuters (now part of US headquartered Thomson Reuters group), AFP serves both as its home country’s domestic news agency and as a provider to media all over the world. In the past two decades AFP has expanded its international operations enormously, providing fast-growing services in English, Spanish, German and Portuguese and, more recently, in Arabic and Chinese, as well as in French. AFP’s core media are text, photos and graphics; it has developed in recent years a fast-growing video service and various multimedia products. The company provides general-interest news plus business and sports services. For more info on AFP, including a potted history: http://www.afp.com/. In 2002, AFP had sales of just under 250 million euros, of which just over a third - 34.7% according to management figures - was generated outside France. Twelve years earlier, in 1990, foreign sales had accounted for only 18.8% of total turnover. News-gathering is a necessarily labour-intensive business, and one that has been subject to massive technological change over the past fifty years. It is therefore by its nature relatively unprofitable, involving high and relatively inelastic costs. Of AFP’s two main competitors, one, Reuters, is a publicly-quoted company able to finance its general news operations thanks to profitable non-media activities, specifically financial news for the business community. The other, AP, is a cooperative owned by US media interests, which gives it at least a durable financial base. While having an independent status - its statutes guarantee it complete autonomy from the French state - AFP has in the past depended on subscriptions taken out by French government agencies and diplomatic missions around the world for a significant part of its earnings. Periodic financial crises have been exacerbated by the fact that the company’s statutes forbid it to run a deficit in any given year, a particularly constraining circumstance given the high costs involved in the industry. The company is also special in that its governing board is made up of its main clients: specifically the French media, which enjoy a built-in majority, and the state. One of the main complaints voiced regularly by all the AFP unions is that the French media get an exceptionally good deal out of AFP, voting to keep down the prices they themselves pay for its services and thereby preventing the company from achieving its potential. Although fiercely protective of their independence from the state, many of AFP’s employees are also attached to the idea that their company provides a public service, or at least a "service in the general public interest." It should be noted that many French people do not subscribe to the notion - fashionable in many other countries - that sink-or-swim private ownership is necessarily the best possible status for a company, and that dependence on public funding is automatically bad. AFP’s strong expansion in markets outside France has seen a progressive fall in the share of sales generated by state contracts; from around a half of the total in 1990 they fell to 38% last year, and seem set to continue declining. Successive French governments have however agreed to help AFP on occasion, notably by providing loans to ensure that the budget can be balanced. In general however such help has only been provided in situations of extreme crisis and as a stop-gap measure. There has been no serious effort to place the company on a stable long-term footing. Recent HistoryIn 2002, AFP’s sales failed to grow for the first time ever - instead falling by 1.8%. A study carried out for the works committee - which has a vetting role under French law - also showed a considerable increase in indebtedness. The deterioration in the company’s position appeared to be the result of several factors - a number of failed or loss-making projects and subsidiaries, a gradual withdrawal of support from the state, the large expansion into international markets in the past 10 years, and the collapse of the dot-com bubble. With large operations overseas - notably in its regional centres of Washington, Hong Kong, Nicosia and Montevideo - AFP is also highly vulnerable to exchange rate fluctuations. The company has further been hit by the high cost of certain media operations, notably the war in Iraq. AFP’s total debt was estimated, in late 2003 at somewhere between 49 and 66 million euros. According to management figures, the operating margin declined from a profit of 9.8 million euros in 1998 to a loss of 4.3 million in 2002. At the end of August 2003, employees were stunned to learn - via a tiny news item in the French press - that management intended to submit to the board a plan to refinance the company by selling off its headquarters building, built on the site near the Paris stock exchange where some of the people who re-founded the company after World War II had helped liberate the city from the Nazis in 1944. It quickly emerged that the plan - a sale and buy-back arrangement known in French as a "crédit-bail" - was one of the conditions for a four-year compact being drawn up between the company and the French government. The Aims and Means Contract (COM)Under the contract, to run from 2004 to the end of 2007, the French government undertook to increase the amounts it pays for its subscriptions to AFP services by a total of some 25 million euros. This is being provided via a purely temporary percentage increase over and above the agreed subscription rates. In exchange, management agrees to implement a major belt-tightening operation, aimed at bringing the company back into the black by 2006. As part of the deal, the board was asked to approve an effective sale of the headquarters building, which was estimated to be worth some 60 million euros. The deal was expected to bring in around 40 million euros to AFP’s coffers, most of which were to be used to pay off existing debt, and also to fund an early retirement scheme for older employees. As of April 2004, the scheme was being held up by administrative problems, but was still expected to go ahead. |