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Friday, December 1, 2000



SOLD!

Bulletin buyer Black to acquire MidWeek

The two transactions will
give the Canadian executive
a significant local publishing
and advertising presence


By Rick Daysog
Star-Bulletin

One day after he completed his purchase of the Honolulu Star-Bulletin, Canadian publisher David Black said today he is purchasing RFD Publications, which owns the 280,000 circulation MidWeek newspaper.

Black, president of Victoria, British Columbia-based Black Press Ltd., will buy RFD from New York-based Trans Capital Corp., which recently acquired the local company from media-giant Newhouse Group.

The sale price was not disclosed.

The deal is expected to close early next year and Black said he will retain all 140 RFD employees. RFD chief executive officer Ken Berry will continue to head the Kaneohe company.

The transaction, when combined with the purchase of the Star-Bulletin, will give Black a significant local publishing and advertising presence to compete head-on with the Honolulu Advertiser.

In addition to RFD's printing plant in Kaneohe, Black will acquire the company's advertising, distribution and circulation staff that would serve as the backbone of the Star-Bulletin's business operations.

Black's purchase of the Star-Bulletin includes the company's editorial functions but does not include printing presses, office facilities or its distribution and circulation networks.

Those business functions were handled by the joint operating agreement between the Star-Bulletin and the Advertiser. The JOA terminates when Black takes over the Star-Bulletin on March 16.

RFD Publications had been owned by Newhouse since 1986 when it purchased the company from Portland native Richard Dickey. MidWeek is a free weekly newspaper that is mailed to Oahu homes.

The RFD deal gives Black significant advertising revenue since many of Hawaii's largest grocery store chains, such as Safeway Stores, advertise heavily in MidWeek.

It also allows Black to cross-promote the Star-Bulletin and MidWeek to subscribers of each publication.

"You have the makings of a newspaper war," said Stephen Barnett, an antitrust law expert at the University of California-Berkeley's Boalt Law School.

Black announced yesterday afternoon that he has finalized his purchase of the 118-year-old Star-Bulletin.

Under the Nov. 9 sale agreement with the seller, Liberty Newspapers Limited Partnership, and Gannett Co., which owns the rival Advertiser, Black had the option to back out of the Star-Bulletin deal yesterday if he was unable to secure an adequate supply of newsprint or if he was unable to come to terms with the newspaper's union.

On Tuesday, the Star-Bulletin's unionized staffers voted 54-7 to approve a five-year contract with Black.

Black said he has not obtained all of the newsprint he needs but that he is hopeful that he can find enough by March 16.

So far, Black has secured about 5,000 metric tons of newsprint a year from a British Columbia-based paper mill, which is about the amount that the Star-Bulletin currently uses. Black said he needs an additional 5,000 to 7,000 metric tons of newsprint to add a Sunday edition and expand the Star-Bulletin's daily circulation from the current 63,500 to about 100,000.

Black, whose company owns 80 newspapers in western Canada and Washington state, has said he plans to invest as much as $25 million in the Star-Bulletin.

He said he is looking at leasing office space at Restaurant Row to relocate the Star-Bulletin's newsroom.

Both the Star-Bulletin and the Advertiser currently work out of separate offices in the same Kapiolani Boulevard building.

"We're going full speed ahead," Black said.

Liberty put the Star-Bulletin up for sale in April, postponing antitrust lawsuits by the state Attorney General's Office and a local community group, Save Our Star-Bulletin.

The suits were in response to Liberty's attempt last fall to close the Star-Bulletin and terminate its JOA with Gannett in exchange for a $26.5 million payment.



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