South West News Service reporters were sent a memo referring to it and 72 Point, which said: "Our two businesses generally rub along very nicely together, but there is an increasing area of conflict with stories involving major companies and brands.
"As 72 Point continues to spread its wings, it deals with – or is trying to – every major name on the high street or internet, either directly or through an agency. So it can cause them major pain when SWNS writes a 'knocking' story about a shop chain or insurance company etc."
According to its website, 72 Point offers services including content, broadcast and video alongside traditional PR, and works with PR firms such as Frank PR, 3 Monkeys and Ketchum, while corporate clients include Airbnb, ITV, Thomas Cook and Waitrose. It was founded in 2003 and has offices in London, Bristol and, since 2013, New York.
SWNS itself was created in the 1960s and now has 150 staff. It claims to be the UK's largest independent news agency.
The memo said 72 Point was discovering that some potential clients were hostile because of the PR agency’s connection with SWNS, but added that journalists should continue to write stories that cast companies or brands in a negative light.
But it went on to instruct journalists to give 72 Point a warning about negative stories regarding brands that the agency looked after, in order to lend the agency "kudos" with its clients.
The memo said: "A lot of the time, the stories that cause problems are actually worth very little to SWNS, but can cost 72 Point a lucrative client. So, going forward, we need all reporting staff to be mindful of stories they are writing about companies and brands. Often we cannot ignore them, but alerting 72 Point beforehand could be very beneficial. We need to weigh up whether running a story is worth the potential fall-out to the PR side of the business."
Martin Winter, managing director of SWNS, explained to PRWeek that he needed to perform a "careful balancing act" to manage the two sides of the company.
He said: "There is inevitably a tension between the two sides of our business, as there always is between journalists and PRs. We have to manage that in the best interests of both parties. We are in a unique position of straddling both sides of the fence and this requires a careful balancing act."
Winter added that he would maintain the integrity of the newswire, even if it required writing stories that some brands found uncomfortable.
He continued: "But as a joined-up business, we have to make sure our news output will not cause disproportionate damage to 72 Point – particularly if the story involved is of little value to the news business."
The memo highlights the tension between editorial and PR objectives when they are contained in the same company, said Adam Leigh, strategy director at W and former deputy editor of The Independent.
He said: "Like any media organisation, SWNS is discovering that there’s a tension between total editorial freedom and the interests of stakeholders or clients. So we shouldn’t be surprised it’s having this sort of internal conversation as it evolves beyond pure-play news into a more diversified media company.
"The thing to watch out for is that if subscribers begin to feel stories are being suppressed or unfairly slanted, SWNS’s entire reputation could be threatened."