Cancel the AP? Exactly the wrong thing to do.

Tribune recently made waves when it joined a few other newspapers in announcing their intent to cancel the AP. The two year notice provision means there's still plenty of time to work things out, but the notion that papers could do without the wire service is sending plenty of waves. Most think its only a negotiating tactic, with the intent to cut costs from these large contracts. I think these papers are dead wrong in this effort.

The issue to me isn't one of coverage, as most would see it, but one of failing to use one of their most powerful levers. Because the AP has been structured as a not-for-profit cooperative, it reaches across most coverage. It's a single point of contact for large entities, like google, to make deals for content in one swath. It could be a key point of leverage, dare I say a union, to work out reasonable terms with those that "steal" content. It can be a powerful lever in the right hands.

However the structure of the AP as a not for profit collective virtually assures these deals will stink. Rather than the AP trying to maximize its economic terms, it seeks to spread out its costs and treat everyone fairly. Now more than ever the AP should act as a profit maximizing entity, not a shared expense. AP should be more like OPEC than REI, focused on making money for its members, not minimizing costs.

Newspapers shouldn't be trying to pull out of the AP and further weaken its power. They should be investing in it to restructure the out of date entity for modern times. The key is in looking at the age old entity as a business, rather than a line item in the budget.