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Wednesday, January 26, 2000



Star-Bulletin closing after 117 years

Sweetened Hearst
deal for Examiner
may affect fate
of Star-Bulletin

The new terms 'may hold the
future for Honolulu as well,"
a newspaper legal expert says

By staff and wire reports

Tapa

Antitrust concerns from local, state and federal officials have prompted Hearst Corp. to sweeten the deal for potential buyers of the San Francisco Examiner.

Hearst is adding trucks, printing presses and other assets, as well as the newspaper's name and subscriber list, Examiner publisher Timothy O. White said yesterday.

The new terms could affect plans to close the Honolulu Star-Bulletin, according to Stephen Barnett, a professor at the University of California's Boalt Law School and expert on newspaper competition issues,

"What happened in San Francisco today may hold the future for Honolulu as well," he said.

"That would mean that Gannett and Liberty would have to figure how to split printing presses in half and enough production facilities to support (each paper).

"The question would be then, as it is in San Francisco, whether anyone would buy the paper," Barnett said.

Unlike the San Francisco situation, Liberty Newspapers LP, the Star-Bulletin owner, did not put the 117-year-old paper up for sale. Liberty and Gannett Co., Honolulu Advertiser owner, entered an agreement in September to end their joint operating agreement.

U.S. District Judge Alan Kay issued a preliminary injunction stopping the $26.5 million closing agreement. Kay set a Sept. 19 trial date on a state attorney general's suit alleging the owners illegally conspired to create a monopoly.

Tara Connell, Gannett's director of public and government affairs, declined comment today on the San Francisco case. Deputy attorney general Rodney Kimura, who filed suit on behalf of the state against the owners of the two Hawaii dailies, and Richard Port, who heads the citizens group, Save Our Star-Bulletin, also declined comment.

In August, Hearst said it planned to buy its longtime rival, the morning San Francisco Chronicle, reportedly for $660 million, and sell the Examiner. But terms of the deal included only the Examiner's name and goodwill, not any physical assets needed to put out a paper.

White said the original offer attracted no buyers. Buyers have until Feb. 15 to express interest. The new offer includes all of the assets presently being used to produce and distribute the Examiner, White said.



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