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Tuesday, November 16, 1999



Star-Bulletin closing after 117 years

San Francisco
watches closely

The Star-Bulletin decision could
affect the San Francisco Examiner,
whose fate is hanging
in the balance

By Leila Fujimori
Star-Bulletin

Tapa

Those in favor of saving San Francisco's afternoon paper got a boost yesterday when an appeals court upheld a ruling that prevents the shutdown of the Honolulu Star-Bulletin.

The afternoon San Francisco Examiner faces a fate similar to that of Honolulu's afternoon newspaper, and that city's Board of Supervisors has stepped in to prevent the morning paper from monopolizing the market.

"I think this is definitely going to encourage San Francisco to explore its legal options," Supervisor Michael Yaki said. "I am very pleased for the Star-Bulletin."

He said the outcome adds leverage with the U.S. Justice Department, which is investigating the San Francisco papers' deal.

Hearst Corp., owner of the Examiner, is buying the morning San Francisco Chronicle and has put the Examiner up for sale. But the sale reportedly does not include a share of the joint operating agreement and does not include press facilities, office space or distribution equipment.

The ruling in the Star-Bulletin case "will definitely affect the Justice Department's actions in San Francisco," California law professor Stephen Barnett said. "It clearly indicates to the Justice Department that you don't have to fold your tent and go home."

The Justice Department could decide that interest in a joint operating agreement must be offered along with the sale of a doomed newspaper, Barnett said.

Besides the Justice probe and support from the Board of Supervisors, a coalition of the city's alternative newspapers and citizens groups have joined the fight to prevent San Francisco from losing one of its two daily newspapers.

"The decision is very important in fighting for the principles of diversity of opinion and preserving competitive options for advertising," said Ted Fang, publisher of the San Francisco Independent.

"The similarities are striking," Fang said. "There is a joint operating agreement, and in both cities the closure of the afternoon daily appears to be the goal."

The California attorney general's office and the San Francisco district attorney's office are also investigating the matter.

The community and alternative papers are fighting to save the Examiner because "if any newspaper is in a complete monopoly position as far as daily newspapers go, they could threaten the existence of any community or alternative newspaper," said Fang.

Bruce Brugmann, publisher of the Bay Guardian, said the appeals court's action upholding the injunction in the Star-Bulletin case "keeps alive two daily newspapers, and that's what it's all about."

Brugmann fought the formation of the San Francisco JOA in 1965. He and his wife began publishing the weekly Bay Guardian, the following year. He said JOAs "fix prices, pool profits, share markets and essentially limit daily competition forever."

"Governments never should have allowed it (JOA). Now that it's there, it's better to keep two papers than to have them kill the afternoon paper," Brugmann said.

Unlike in Honolulu, the unions have not taken an active role in the San Francisco fight, Brugmann noted, which is why the two alternative papers have led the fight. Closure of one of the dailies could be fatal to the weeklies.

Ed Epstein, a Chronicle reporter, said the appeals court ruling did not come as a surprise: "That's what I expected because the owner of your newspaper made some foolish comments the paper was profitable, but not as profitable as some on the mainland. They kind of flaunted that in the Justice Department's face. Then the Justice Department filed a brief."

Examiner Editor and Publisher Timothy C. White said last week that there is a difference between the Honolulu situation and San Francisco's: There's been no effort on the part of the owner of the Star-Bulletin to sell. "But there's a huge effort on the part of Hearst to sell," he said.



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