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Thursday, September 28, 2000




David Black, Sole qualified bidder for Star-Bulletin:
"I don't think there will be a problem."



Black confident
of buying Bulletin

The owner of Black Press
expects to resolve issues
in the next few weeks

Profile of David Black


By Rick Daysog
Star-Bulletin

The Canadian publisher selected as the sole qualified bidder for the Honolulu Star-Bulletin is confident that he can reach a definitive agreement to acquire the 118-year-old afternoon daily.

Star-Bulletin closing David Black, owner of Victoria, B.C.-based Black Press Ltd., hopes to resolve several outstanding issues with the Star-Bulletin's owner, Liberty Newspapers Limited Partnership, and Gannett Co., the owner of the rival Honolulu Advertiser, during the next few weeks.

"I don't think there will be a problem," Black said yesterday in a telephone interview from Canada. "I think these issues are small enough and there's enough common sense that we can almost do it on the phone."

Yesterday, Federal Magistrate Barry Kurren selected Black Press as the only qualified bidder for the 63,500-circulation Star-Bulletin, in a major step toward preserving a second editorial voice in Honolulu.

The ruling -- which effectively rejected competing bids by Los Angeles-based Hadland Communications Inc. and a local group composed of former U.S. Rep. Cecil Heftel, Kauai developer Jeff Lindner and Kauai publishers Peter and Jane McClaran -- also directed Liberty and Gannett to negotiate transition issues and other unresolved matters with Black.

"The court is prepared to assist this process to resolve any disputed issues," according to Kurren's order, which also set an Oct. 27 deadline to negotiate a deal.

Kurren and U.S. District Judge Alan Kay have scheduled an Oct. 27 hearing to approve or terminate the deal.





Federal Magistrate Barry Kurren's order selecting Black Press
Ltd. as the sole qualified bidder for the Star-Bulletin.



Black, whose company operates about 80 community newspapers in western Canada and Washington state, said there are about two dozen points to be negotiated and many of them are minor, such as the transfer of the Star-Bulletin's telephone numbers and the newspaper's library of clippings.

Black, who met with Liberty's chief executive, Rupert Phillips, and Gannett's chief financial officer, Larry Miller, in Los Angeles last week, said he believes that he has addressed Gannett's biggest objections.

Black previously requested a six-month to one-year transition during which his company would receive a share of the Star-Bulletin's income stream from the existing joint operating agreement with the Advertiser. Gannett balked, saying the request amounted to a subsidy. In the revised offer submitted Monday, Black dropped the request for a share of the Star-Bulletin's income, he said.

Doesn't see a major rate war

Mike Fisch, the Advertiser's president and publisher, referred questions about the negotiations to Gannett officials in Arlington, Va., who could not be reached for immediate comment.

"I think that for everyone involved it's been a long and frustrating process," Fisch said. "I'm simply pleased that the process is moving forward, and we'll look forward to the end result."

If his bid is accepted, Black said he hopes to compete vigorously with the Advertiser but said he does not expect a full-scale advertising rate war.

While businesses may be in favor of cutthroat competition, ad wars often lead to newsroom cutbacks, which would lower the quality of the papers' coverage, he said.

In the worst case, it could lead to the closing of one of the papers.

"I don't see a major rate war," said Black.

"It's a short-term win for the businesses, but in the long and short term, the papers get worse, not better."

Black, who is prepared to invest about $25 million in the Star-Bulletin, said he intends to increase the daily circulation to about 100,000 and add more than 200 workers to staff the paper's circulation, advertising and distribution operations.

He plans to continue to run the Star-Bulletin as an afternoon daily and wants to add a Sunday edition, in a move to increase ad revenues by about 35 percent.

News quality key to growth

Tom Brislin, a University of Hawaii journalism professor, believes it will be difficult to expand the Star-Bulletin's daily circulation to 100,000 without cutting into the readership of the Advertiser or increasing the number of readers who buy both papers.

The Advertiser's circulation as of the end of March was nearly 107,500, according to the Audit Bureau of Circulation.

Brislin noted that the key to any expansion will be the quality of the news stories, especially when it comes to street sales. Exclusive, in-depth reporting would create a brand difference that would lead readers to chose to buy one paper over the other, he said.

"I see some optimism in the selection of Black," said Brislin, a former city editor at the Advertiser. "His company seems to have both the breadth and depth to absorb the start-up costs."

Liberty put the Star-Bulletin up for sale in April after the attorney general's office and local community group Save Our Star-Bulletin filed antitrust lawsuits in U.S. District Court.

The suits, later consolidated, were in response to Liberty's announcement last September that it was closing the Star-Bulletin and terminating its joint operating agreement with Gannett. In exchange, Gannett was to pay Liberty $26.5 million.

Under the JOA, which was scheduled to expire in 2012, both newspapers share printing, advertising and distribution costs but retain separate editorial voices.

The proposed sale of the Star-Bulletin would end the JOA and force the paper's new owner to build its own advertising and circulation departments and compete with the Advertiser for ad revenue and readership.

Cayetano impressed

If the sale falls through, the lawsuits will resume.

Jim Bickerton, attorney for Save Our Star-Bulletin, said he was encouraged by yesterday's decision since it brings the litigation one step closer to resolution.

Gov. Ben Cayetano told the Associated Press that he was impressed by Black after meeting with him earlier this month. Cayetano said he believes that Black is the type of person who "understands an obligation to the community."

"I think if that sale goes through, the Star-Bulletin will do great things," Cayetano said.

The staff reaction to Black's selection was generally upbeat.

Stephanie Kendrick, assistant features editor and a member of ESOP Star-Bulletin, which represents most of the paper's 97 employees, said many staffers were relieved by Kurren's decision and are eager to meet with Black to discuss his plans for running the paper.

"Everything we know about David Black suggests that he has the character, capital and experience to make a go at this," she said.

Heftel also praised Kurren's decision, even though it meant the rejection of his joint bid with the Kauai group.

Heftel said his overriding interest is not to buy the Star-Bulletin but to preserve a second editorial voice in the community and prevent Gannett and Liberty from closing the paper.

"I just hope Black is ready to do complete battle," Heftel said, "because I believe Gannett will fight all the way to close the Bulletin."


Canadian publisher
‘got really caught up’
in call for two voices

'Competition ... tends to improve
products. I hope that will be good
for all who live in Hawaii'


By Christine Donnelly
Star-Bulletin

It was the thought of spending time in paradise that initially attracted David Black to the Honolulu Star-Bulletin.

But it was hearing from so many Hawaii residents who wanted the 118-year-old newspaper to survive that ultimately persuaded the Canadian publisher to try to buy it.

"It's in Hawaii. You're talking to a Canadian. I've been there lots of times as a tourist, and I love it," Black said yesterday, recalling how his interest was piqued when he heard the paper was for sale under court order.

But he moved forward only after assessing the paper's viability in a competitive market, its historical value and its importance to the community. He or his employees spoke with dozens of key political leaders, business people and potential advertisers on recent trips to Honolulu.

Black said he was pleased that even the potential advertisers cited the need for two distinct newspapers as the primary reason to keep publishing, before their desire for cheaper ad rates. "Almost to a person, No. 1 was wanting two editorial voices. We got really caught up in it," said Black.

Soft-spoken with iron core

With a bachelor's degree in engineering and a master's in business administration, Black got into the newspaper business in 1973 as a junior analyst for the Toronto Star. Two years later, he bought his first community newspaper, and his company, Black Press Ltd., has since grown to include about 80 newspapers in Canada and Washington state.

He is known there as an unpretentious, soft-spoken man with an iron core when it comes to business. While some Canadian news accounts have quoted adversaries as calling Black "hard as nails," the former president of a Black Press subsidiary in British Columbia disputes that as too harsh.

"He's a tough but fair competitor who very much values being a good member of the community," said George Manning, who has known Black for 25 years and enjoyed working for him before retiring in 1993. Manning described Black as intelligent, shrewd, "careful with a dollar" and "always at work."

As for going head to head as an afternoon daily against media giant Gannett Co., which owns the morning Honolulu Advertiser, Manning said Black is so thorough in his advance work that "he would know what he is going up against. He would expect to do well, or he wouldn't be there."

For his own part, the 54-year-old Black said he is "pretty small potatoes compared to Gannett. We're just a family company trying to put out good newspapers. The nice thing about competition is that it tends to improve products. I hope that will be good for all who live in Hawaii."

Works 'fine' with unions

Married and the father of four children ranging in age from 23 to 28, Black said he and his wife, Annabeth, likely would live part time in Honolulu if he succeeds in buying the paper. He foresees a role akin to chairman of the board, setting general direction and policy and helping set up the "business end," including building advertising and circulation departments from scratch.

Black said he would rely on the existing management team and newsroom staff to supply editorial content.

He looks forward to meeting the newspaper's employees and its union leaders on his next visit to Honolulu, perhaps within the next two weeks.

That was welcome news to Wayne Cahill, administrative officer of the Hawaii Newspaper Guild, which represents the Star-Bulletin's newsroom staff.

Cahill praised Black's selection as the best potential owner for the paper and said he expected Black would be a demanding but fair employer and contract negotiator, based on his reputation in Canada.

Cahill said it was premature to discuss union strategy if Black's bid succeeds, other than that the goal would be "to ensure that the Star-Bulletin is not only successful and viable, but also that it is fully organized."

Black, too, declined to discuss possible contract negotiations, but said he expected good labor relations, as at his other papers. "We work fine with organized labor, and I would expect the same in Honolulu."



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