Starbulletin.com


Thursday, October 14, 1999



ANALYSIS

Star-Bulletin closing after 117 years

Bulletin case breaks new legal ground

'It may show a new interest in
trying to protect' the integrity of the
Newspaper Preservation Act'

Bullet Star-Bulletin keeps on rolling
Bullet Full-text of Gannett-Liberty agreement

By Crystal Kua
Star-Bulletin

Tapa

New legal ground is being broken over newspaper joint operating agreements as the federal courts decide the fate of the Honolulu Star-Bulletin, experts say.

U.S. District Judge Alan Kay yesterday granted a request by the state attorney general's office to postpone the Oct. 30 closure of the Star-Bulletin. It was part of a lawsuit against Star-Bulletin owner Liberty Newspapers and Honolulu Advertiser owner Gannett Co., which have been operating the papers under a joint operating agreement since 1993.

"It's striking and unprecedented. There's never been anything like this," said Stephen Barnett, a journalism law professor at the University of California-Berkeley.

Richard McCord, who criticized Gannett in his book, "The Chain Gang: One Newspaper versus the Gannett Empire," agreed.


By Ken Sakamoto, Star-Bulletin
Workers load boxes into a shipping container in the parking lot
of the News Building. The Hawaii Newspaper Agency had until
today to send financial and other records to the U.S. Justice
Department which is investigating the closure of the Honolulu
Star-Bulletin for possible anti-trust violations.



"I think what's happened in the past, the federal courts ... sort of had their hands off of the JOA. For this injunction to be granted, it may show a new interest in trying to protect the whole integrity of the Newspaper Preservation Act," said McCord.

The federal Newspaper Preservation Act exempts newspapers from antitrust laws and authorizes joint operating agreements, all of which is aimed at helping failing newspapers survive.

Media critic Ben Bagdikian said he has seen instances in which the U.S. Justice Department's antitrust division made some conditions -- such as putting a newspaper up for sale -- in the dissolution of a joint operation agreement.

"I'm not aware of a court intervening," said Bagdikian, retired dean of the University of California at Berkley school of journalism.

Kay's ruling could set the stage for the Star-Bulletin to be put on the market, Barnett said.

"I think that's what the court would require in the end," he said. "I think his ruling probably turns on the fact that it has not been put up for sale."

McCord said what Kay's ruling does is keep alive the prospect of a buyer entering to rescue the paper."It gives hope for life," McCord said.

"As long as it keeps publishing, there's a chance that someone could step in or the ruling could go in favor of keeping the JOA, to last until the end of the JOA."

The present JOA is scheduled to end in 2012.

Is there a buyer out there?

But finding a buyer may not be easy.

"Big-city afternoon papers have not been hot properties on the market," Bagdikian said.

It's conceivable that a local group may want to buy the Star-Bulletin, but don't look to a large media conglomerate to step in, because afternoon papers are not considered a good buy, he said.

Barnett said the court could eventually allow the Star-Bulletin to close if a buyer doesn't come forward.

Gannett said it will appeal Kay's decision to the 9th U.S. Circuit Court of Appeals, which is the largest of the 13 federal circuits.

The 28-judge 9th Circuit, based in San Francisco, includes all federal courts in Hawaii, California, Oregon, Washington, Arizona, Montana, Idaho, Nevada, Alaska, Guam and the Northern Mariana Islands. The court is currently operating with seven vacancies.

Normally, it can take 13 months for an appeal to be heard, but court rules allow for emergency appeals.


'It's striking and unprecedented.
There's never been anything like this.'


Stephen Barnett

JOURNALISM LAW PROFESSOR, ABOUT
YESTERDAY'S COURT DECISION


Tapa

Barnett said appeals of injunctions are normally placed on a fast track, which means Gannett's appeal could be heard in two to three weeks.

Because there are so many judges with different judicial ideologies in the 9th Circuit, predicting an outcome is difficult, Barnett said.

"The 9th Circuit could overrule the injunction, but I don't think that would happen," Barnett said.

The court would likely find that there would be no hardship to Liberty Newspapers or Gannett to continue publishing, he said.

"It might be different if they were losing a lot of money, but they're not," he said.

As long as the injunction is kept intact, the Star-Bulletin certainly has a good chance of staying open for a while until this case is decided, Barnett said.

McCord said Gannett's practice has been to use the courts to cause delays and force opponents to wait.

He said that's what happened to striking newspaper workers in Detroit.

A win, or was it?

There, some 2,500 employees, including pressmen, truck drivers, reporters and editors, went on strike in July 1995 over such issues as wages, work rules, union jurisdiction, job cuts and health-care costs.

During the strike the Gannett-owned Detroit News and Knight-Ridder-owned Detroit Free Press, operating under a joint operating agreement, continued to publish by hiring about 1,200 replacement workers.

The strike lasted 19 months, until a federal judge ruled in 1997 that Detroit Newspapers Inc. had failed to bargain in good faith and had committed unfair labor practices and ordered striking workers rehired.

While the workers won in court, the long strike took its toll on their lives.

Gannett has "a lot of lawyers. The court system moves quite slowly.

Time works on their side," McCord said.

"But the injunction works against them."

McCord said that although Gannett has dissolved joint operating agreements in places such as Nashville, Hawaii's remoteness makes its situation unique.

While newspapers in communities surrounding Nashville could fill the void created by the closing of one its newspapers, Hawaii doesn't have that opportunity.

"When one of your papers ceases to exist, it's a major blow. I think it was very appropriate for the attorney general and the community to be concerned with that," McCord said.

Both Bagdikian and McCord said they don't quite know what to make of the Justice Department's request for business files related to the closure.

"It sounds to me like a serious attempt to understand the finances," said McCord.



Star-Bulletin closing Oct. 30, 1999



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