The Associated Press boosted its revenue for the first time in six years in 2014, benefiting from special events and improved licensing of photo and video content, and the news cooperative said Wednesday that its profit soared.
Revenue grew 1 percent to $604.0 million, up from $595.7 million the previous year. Profit rose to $140.9 million, its highest level since 2009, up sharply from $3.3 million a year earlier. The bump came largely from the sale of its 50 percent stake in sports data company Stats LLC, which brought in $128.3 million for AP, the company said in its annual report.
Video revenue last year was bolstered by sales of content and services around the World Cup, Winter Olympics and U.S. mid-term elections, along with new video contracts with existing client CBS in the U.S. and with RTL in Luxembourg. The gains were offset somewhat by a drop in text revenue that was mainly due to Google's decision to stop licensing content.
Revenue is expected to fall about 2 percent this year, because of the lack of special events, the strong U.S. dollar, which lowers overseas income, and the continued decline in revenue from U.S. newspapers, according to Chief Financial Officer Ken Dale.
A quarter of AP's revenue in 2014 came from newspapers around the globe, 47 percent came from TV broadcasters, 9 percent from Internet companies, 7 percent from other agencies, and 5 percent from radio stations.
Founded in 1846, the news organization is owned by roughly 1,400 U.S. newspapers. More than 80 percent of its revenue comes from licensing text, photos and videos to TV and radio broadcasters, newspapers and websites. It also provides logistics support to TV crews, software to broadcast news outlets, and advertising space on its own platforms.
The AP ended 2014 with no long-term debt, unchanged from a year earlier.
Expenses fell slightly to $599.5 million from $604.0 million, mostly because of adjustments to a post-retirement medical insurance plan.
The AP's revenue gains came at the expense of competitors, according to the annual report.
"An increasing number of media companies are choosing to have a single agency provide their content," said CEO Gary Pruitt and Chairman Mary Junck in the report. "Many of the organizations we negotiated with last year opted for AP as their content provider, often for longer terms, at the exclusion of the competition."
Dale said that despite the projected revenue decline next year, the AP has improved its financial footing. Aided by the sale of Stats in June of last year, the news organization used $110.6 million to fund its future pension obligations, compared with a $7.6 million contribution in 2013.
"We feel good about where we are right now," Dale said. "It's a tough environment and revenue growth remains our challenge. But we've got our pension on much sounder footing, we're debt free, have cash on the books and have attractive growth prospects in video, images and (broadcast news production software) ENPS."
Last year, the AP expanded video coverage in Latin America and the Middle East. It also expanded corporate earnings coverage through automation and hired staff in the U.S. focused on sharing member stories. Both initiatives were meant to free up time for AP journalists to do more original reporting.
The AP also announced Wednesday that it added two new members to its 20-member board of directors: Kirk Davis, CEO of GateHouse Media LLC and Patrick Talamantes, CEO of The McClatchy Co.
AP's 2014 annual report: http://www.ap.org/annual-report/2014