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The closure brings to an end 76 years as a primary supplier of wire copy to media companies and broadcasters. It was established in 1938 to facilitate the sharing of news with Reuters, then its biggest competitor.
The board, consisting of representatives from media companies that have funded the non-profit wire service since its conception, have voted to wind up Sapa.
Though the announcement was made yesterday, it appears that closure has been "in the air" for some time... Mail & Guardian reports "Sapa staff members have known for some time that the future of the company was in doubt. One staffer said he has seen adverts for jobs on Media24 that could only be for Sapa."
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Sapa to cease operations on 31 March
Paul Vecchiatto, writing in BDpro, says syndicated newswire service‚ the South African Press Association (Sapa)‚ will shut its doors on March 31‚ as the non-profit company fell victim to changing times and technology‚ with its big backers walking out.
On Thursday the Sapa board issued a statement saying it had finalised a decision taken in December to "wind up the news agency as a non-profit company".
Because Sapa is registered as a Section 21 company (not for profit) it cannot be sold as a going concern.
Sapa chairwoman Minette Ferreira said financial advisors Nkonki Incorporated had been appointed to review three applications to buy the assets and turn the company into a commercial newswire service.
Applications have been received from multi-media company Gallo Images‚ independent publishing house KMM Review‚ and diversified JSE-listed group Sekunjalo Investment Holdings.
This means that the newswire's credit‚ indicating that their reporters had written the story‚ which has been seen in most major South African newspapers and online sites‚ will not appear from April 1.
The Sapa ownership structure was one of membership with the four major members having been the Times Media Group (owner of Business Day and The Sunday Times)‚ Caxton Publishing‚ Naspers-owned Media 24‚ and Independent News & Media SA.
The members contributed the vast majority of the monies needed to cover Sapa's running costs with a number of small subscribers such as web sites and radio stations paying regular fees.
Ferreira told Business Day that the death knell for the newswire service was sounded when the Time Media Group decided that it would no longer be a member and downgraded its status to an ordinary subscriber in June 2013.
Another publishing group Caxton resigned as a member and its period of notice ended in June‚ and then Independent Newspapers followed suit in November.
She said those membership resignations caused Sapa's annual revenue to drop from R27m to R11m and that meant from April it would not be able to cover its running costs.
"Furthermore‚ the company needs a massive new investment in its IT infrastructure and that is a financial burden the current structure just cannot carry‚" Ferreira said.
Sapa was founded on 1 June 1938 when the big‚ mainly English language newspapers of the time‚ bought out the Reuters South African News Agency that had started reporting during the Boer War of 1902.
Ferreira said Sapa had been trapped by two factors. The first was that technology‚ especially the internet had overtaken its use as a newswire service and the company had failed to adapt to that situation.
The second was that media owners were less interested in syndication of news and focused on exclusivity of stories to attract readers' attention.
"We had some unsuccessful forays into multimedia‚ but the media companies were developing their own platforms to do this and did not want video and so on from us‚" she said.
Source: BDpro, via I-Net Bridge
Mail & Guardian reports meanwhile that Sapa staff do not agree with being dismissed and needing to re-apply for their jobs and are taking their case to the CCMA.
