Deal saves Bulletin
Canadian publisher David Black
will assume ownership March 15
The deal hinges on finding newsprint
and reaching a union agreement
For the first time since 1962, Oahu will
have fully competing newspapers
By Rick Daysog
Canadian publisher David Black said today that he has reached an agreement in principle to buy the Honolulu Star-Bulletin, in a deal that would save the 118-year-old afternoon newspaper and create head-to-head business competition between Oahu's two dailies.
Black said he came to terms late this morning with Star-Bulletin owner Liberty Newspapers Limited Partnership and Gannett Co., owner of the Honolulu Advertiser. The deal allows him to take ownership of the 63,500-circulation afternoon daily on March 15.
"I feel great that it's done," said Black, who has been negotiating with the two companies since late September. "I don't think there is any possibility it will become derailed now."
The deal is contingent on reaching a contract agreement with the Hawaii Newspaper Guild, which represents most of the Star-Bulletin's 97 editorial employees. Black also needs to obtain an adequate supply of newsprint for the Star-Bulletin.
If those contingencies are not met before Nov. 30, Black can back out of the deal.
Federal Magistrate Barry Kurren has set a 4 p.m. hearing today to confirm or terminate the sale.
Gannett executives could not be reached for response this morning. Mike Fisch, publisher of the Honolulu Advertiser, said, "We are gratified that the negotiations are finally completed. We look forward to moving on and to competing with the new owner of the Star-Bulletin."
Rupert Phillips, Liberty's chief executive officer, had no comment.
Gov. Ben Cayetano called the sale of the Star-Bulletin to Canadian publisher David Black "terrific" and said today Black would be a very good owner who has a great deal of aloha for Hawaii.
"I think he also is a very sensitive and responsible corporate leader and the Star-Bulletin is going to continue in that way," Cayetano said.
The governor, however, continued his criticism of the newspaper's editorial page staff on its position on issues.
"I would suggest to him that the first thing that he should do is go back a couple of years and read all the editorials that were written," Cayetano remarked.
"Don't get me wrong, I disagree with the Bulletin editors a lot you know, but I would hope that a new owner of the Bulletin would want to decide whether they want to have an editorial voice that is less mean spirited, put it that way, and a little more objective and fair."
"And the people of the Bulletin know I feel this way. This is how I feel," Cayetano said.
Black, 54, is the owner of Victoria, British Columbia-based Black Press Ltd., which operates 80 community newspapers in western Canada and Washington state.
Black will acquire the Star-Bulletin's name, its subscriber list and other basic assets from Liberty. Black also gets the right to copy the Star-Bulletin's morgue of news clippings during a four-year period and will have access to the Star-Bulletin photo archives.
Those assets will be held by Oahu Publishing, a local subsidiary recently established by Black Press. Black declined to disclose financial terms. Sources said the price was in the tens of thousands of dollars.
Gannett and Liberty, meanwhile, will receive some form of relief from a preliminary injunction issued by U.S. District Judge Alan Kay in October 1999 that prohibits them from tampering with the daily operations of the Star-Bulletin.
Sources said the Attorney General's Office and a community group, Save Our Star-Bulletin, have agreed to modify terms of the injunction to allow the Advertiser to plan for the eventual head-to-head business competition with the Star-Bulletin.
Details of the modification were not immediately available.
The attorney general's office and SOS sued Gannett and Liberty for alleged anti-trust violations after Liberty, in September 1999, announced that it was closing the Star-Bulletin, prompting Kay to issue his injunction.
Black's purchase ensures that for the first time in nearly four decades Honolulu will have head-to-head business competition between its two dailies.
Since 1962, the Star-Bulletin and the morning Advertiser have worked under a joint operating agreement, in which both newspapers shared printing, advertising and circulation costs but retained separate newsrooms.
With Black's purchase of the paper, the joint operating agreement will end and both newspapers will be separate.
"I'm relieved and ecstatic because it looks like the Star-Bulletin will be here to serve Hawaii. I'm convinced that two newspapers are important to Hawaii," said John Flanagan, Star-Bulletin editor and publisher. "I'm looking forward to competing head to head."
Black said he was prepared to invest about $20 million in the Star-Bulletin to expand its operations and increase its daily circulation to about 100,000. He said the newspaper will hire more than 200 employees to handle circulation, printing, and advertising functions and will add a Sunday edition to the paper's six days-a-week coverage and greatly expand its neighbor island circulation.
Black said that he hopes to add the Sunday paper right after the transfer in March but that he is not sure if he can do that yet.
The Star-Bulletin is currently printed on the same presses as the Honolulu Advertiser. Black has said he plans to print the paper in Kaneohe at RFD Publications, publisher of the free weekly newspaper MidWeek.
Tom Brislin, a University of Hawaii journalism professor, said he expects both newsrooms to expand their coverage in areas where they are likely to target for growth, such as rural Oahu and the neighbor islands.
Brislin, a former Advertiser city editor, added that both newspapers will likely step up their in-depth coverage of local issues since much of their competition on Oahu will be in sales of single-copies at Honolulu's news stands.
"We believe that true competition can only improve the quality of both newspapers," said Jim Bickerton, an attorney for SOS. "My clients are happy not only because we'll continue to have the Star-Bulletin but because it will be an even better paper than it was before."
To be sure, the odds will be stacked against the Star-Bulletin. Not only will the newspaper face stiff competition from Gannett, the nation's largest newspaper chain, it must fight a trend of declining readership among afternoon newspapers.
Today's agreement is the result of weeks of tense negotiations between Black and Gannett that went down to the wire. Black delivered his final offer to Gannett this morning and gave Gannett until late this morning to reply so that the Star-Bulletin could break the story in its late edition.
"We think it's appropriate that the deadline we chose was determinate by Star-Bulletin's (news) deadline," Black said.
Earlier today, the deal hit a last-minute snag when Gannett asked him to indemnify Gannett or insure it from potential losses. According to Black, the losses are potentially unlimited and could be ruinous for a start-up. The issue appeared to resolved after Black and Gannett agreed to indemnify each other for the potential losses.
Liberty put the newspaper up for sale in April, postponing antitrust lawsuits by the state and SOS. The suits, which were consolidated, were in response to Liberty's announcement in September 1999 that it was closing the Star-Bulletin and would terminate its joint operating agreement with the Advertiser in exchange for a $26.5 million payment. The JOA was set to expire in 2012.
Russ Lynch contributed to this story.
Download the PDF of today's press release
Bulletin shutdown archive
Staff: NowNews of the Star-Bulletin's impending sale to Canadian publisher David Black came as the Star-Bulletin staff readied the final edition, but work stopped briefly for hugs, laughter and sighs of relief as the employees waited for confirmation that the sale went through.
we show what
we can do
Employees prepare for fightBy Treena Shapiro
Several employees said after months of waiting, it's hard to believe at this point that the deal is final.
Sports writer Paul Arnett said when he called his wife to tell her the news, she asked, "This isn't like Bush wins, is it?"
Many employees are preparing for a fight as the paper begins "real" competition with the Honolulu Advertiser.
"The phony war is over and the real war starts," said features reporter Burl Burlingame. "It's time to get out of the trenches and charge."
Copy editor George Steele was on vacation today, but came into the newsroom to await word of the sale. "Now the real work begins," he said after the announcement. "It's been a long 13 months and we're just now beginning."
"Now it's time for us to show what we can do and keep helping our readers as we've done for all these years," said features reporter Cynthia Oi. Photographer George F. Lee repeated what he's been saying all along: "Not dead yet, Baby!"
"I'm just glad there's been a resolution, that our fate has been decided," he said. "It gives us all a chance to plan for the future, whether it means having to look for new jobs or helping to build the newspaper up from scratch. I'm ready."
Stephanie Kendrick, assistant features editor and a member of the bargaining committee said she's waiting for more details, but looks forward to negotiating with Black. "Everything that he's said suggests his goal and the goal of the employees is the same and that is the continued publication of a strong, independent Star-Bulletin."
Big Island reporter Rod Thompson, in town today for the celebration, expressed interest in Black's intention to make neighbor island circulation part of the total package. Now that the paper won't have to be printed on Hawaii Newspaper Agency deadlines, "I would hope for stability in circulation on the Big Island," he said.
Ben Wood, who delivered newspapers during World War II, said, simply, "I feel good. I would have been terribly depressed if the paper went down."
Bulletin shutdown archive