The buyer of the Honolulu Star-Bulletin today criticized Gannett Co. as an "arrogant, legalistic, monopoly-loving eastern bureaucracy" that is trying to hamper his acquisition of the 118-year-old afternoon newspaper.
Accuses the Advertiser's parent,
Gannett Corp., of being an 'arrogant,
FULL TEXT OF BLACK'S SPEECH
By Rick Daysog
Firing an opening salvo in what's turning into a local newspaper war, David Black said that Arlington, Va.-based Gannett, which owns the rival Honolulu Advertiser, and the Star-Bulletin's current owner Liberty Newspapers Limited Partnership are trying to make life as miserable as possible for his company before the newspaper sale is scheduled to be completed on March 15.
"The competition has moved beyond petty to viciousness," Black said in a speech before the Honolulu Media Council at the Sheraton Waikiki. "Their game is to make life as miserable as possible and do everything they can to prevent the Star-Bulletin from competing."
Mike Fisch, the Advertiser's president and publisher, said that Advertiser and the Hawaii Newspaper Agency are operating under the transition terms approved by the federal court, which is overseeing the sale of the Star-Bulletin.
Fisch did not address specific charges raised by Black but said that the Advertiser and its business arm, the Hawaii Newspaper Agency, are looking forward to the new era of competition between the Star-Bulletin and the Advertiser.
Black, president of Canada-based Black Press Ltd., said Gannett has taken the Star-Bulletin's newsprint allocation from the afternoon newspaper for use on the mainland. Gannett also is "leaning" on mainland newsprint mills to stop shipments of newsprint to the Star-Bulletin, he said.
Black added that Gannett employees earlier this week made recruitment calls to six key staffers at MidWeek, saying Black plans to fire the community newspaper's management team. Black, who recently announced that he is purchasing MidWeek and its parent RFD Publications, said that MidWeek's executives have done a good job and that he is retaining the management team.
Liberty, meanwhile, is forbidding any contact between his company and the Star-Bulletin's staff, making it difficult to plan his takeover of the newspaper by March 15, Black said.
Liberty also has frozen hiring at the Star-Bulletin while the Advertiser is increasing its staff by hiring employees from the mainland and by recruiting Star-Bulletin staff, Black said.
Black said he plans to take his complaints to federal Magistrate Barry Kurren who is overseeing the court-supervised sale of the Star-Bulletin. He said that Gannett's tactics may force the Star-Bulletin to cease publication for a short while.
The Star-Bulletin and the Advertiser are currently operating under a modified preliminary injunction which forbids Gannett and Liberty from harming current joint operating agreement between the two papers but allows Gannett to market and expand the Advertiser.
The preliminary injunction was issued last year by U.S. District Judge Alan Kay after the state attorney general's office and a local community group Save Our Star-Bulletin filed an anti-trust suit to block Liberty's attempt to close the 63,500-circulation Star-Bulletin.
"I'm not knocking the Advertiser or the HNA," Black said. "They have a good staff and very, very good people. But this company seems to have a history and culture which strives and does everything possible to build a monopoly."
Diane Hastert, an attorney for Liberty, denied that Liberty has frozen hiring at the Star-Bulletin and said that the company this week hired a newsroom employee to replace a worker who recently left for the Advertiser. Liberty also will hire a new intern this week for the upcoming legislative session.
Hastert said that Black is "mistaken" when he says that Liberty is forbidding any contact between Black Press and Star-Bulletin staffers. If Black wants to meet with Star-Bulletin managers or its staff, he should contact her or Alan Marx, Liberty's mainland attorney, to set up a meeting.
"Were trying to transition with the least disruption as possible," Hastert said.
Thank you. I am very pleased to be here at your press council today. I was at a similar meeting in Vancouver last week. It is a vibrant part of the industry in Canada.
David Blacks speech
to the Honolulu
Sheraton Waikiki Hotel
Dec. 13, 2000
My wife, Annabeth, and I are delighted to be in this beautiful state, amongst such friendly people. You bring new meaning to the words welcome and hospitality. We now think of ourselves as Hawaii's newest neighbor island. There are 600,000 people on Vancouver Island, wishing the tectonic plates would push us south and west more quickly.
Before I start I'd like to introduce our new president for Oahu Publications, Don Kendall, my friend and consultant, Glenn Rogers, and my assistant, Ruth Currey.
Raising the level of journalism in HawaiiThe topic is raising the level of journalism in Hawaii. I would like to speak to three areas -- competition, new ideas and spirit.
Competition has been the driving force for innovation and improvement in all industries, including the newspaper business. Competition means editors and reporters are always looking for an edge, digging deeper, providing more substance and serving broader audiences.
Just keeping two newspapers alive in Honolulu will raise standards. The two newsrooms have competed during the JOA years, but they have been fettered by a business monopoly that set their budgets, staff sizes, news holes, times of publication, availability and prices.
For the last eight years, the Gannett-owned Advertiser has controlled the Hawaii Newspaper Agency and the Star-Bulletin has operated under the thumb of its morning competitor. In spite of this, the Star-Bulletin editorial writers have had the energy and skill to put out a hard-hitting newspaper. Imagine what they can do when the fetters are taken off and we go head to head, story-for-story, ad-for-ad, island-for-island, whenever and wherever it makes sense or we see an advantage. This can only improve both newspapers and how well they serve the community.
Until recently, not everybody saw the survival of the Star-Bulletin as a sure thing. We do. Our acquisition of MidWeek won over some doubters. MidWeek has massive island-wide reach -- 270,000 households every week. Combining that with the Star-Bulletin's paid daily circulation and our planned new Sunday edition -- well, the potential synergies are exciting. We hope local advertisers are rethinking their media budgets.
It won't be easy. Gannett is the biggest newspaper company in the country. It enjoys a long list of comfortable, highly profitable monopoly markets. No doubt it wants to return Honolulu to that list.
Gannett is already working hard to make it difficult for us. Its "partner," Liberty, has forbidden contact between the Star-Bulletin staff and us until the handover on March 15. (Ironic, isn't it, for a newspaper company to be against free association.) Unless the judge gives us some relief, this tactic will slow us and may even close us for a while.
Liberty has also frozen hiring at the Star-Bulletin while the Advertiser is ramping up the size of its newsroom, bringing in fresh troops from the mainland and recruiting from the Star-Bulletin staff.
Gannett continues to exploit its current monopoly by launching new Advertiser-only sections with discounted ad rates. It is offering Star-Bulletin subscribers special subscription deals aimed at switching them to the Advertiser and it is delivering free samples of the Advertisers to our subscribers. Under normal circumstances, we could respond. At the moment, while they control both publications, it is unethical and unfair.
Empty Star-Bulletin news racks are becoming increasingly common, while HNA circulators on Star-Bulletin routes tell us they are instructed to keep Advertiser racks fully charged. The good news is the Star-Bulletin has more home subscribers as a percentage of total circulation than any other paper in the country. The bad news is that Gannett accomplished this by practically eliminating single copy sales.
The competition has moved beyond petty to viciousness. Gannett began taking their Star-Bulletin newsprint allocation to the mainland, rather than let us use it. Now they are calling newsprint mills, leaning on them to stop shipments of newsprint to us.
A few days ago I was over in Kaneohe at MidWeek. I was meeting the staff for the first time and telling them, amongst other things, that management there won't change. We think Ken Berry and his executives have done a tremendous job building strong products and a first-class employee group. That day alone, six of MidWeek's key people were called by Gannett. Each call alleged that we were firing the management group. The allegation didn't change and the recruiting calls continued all day long, even though we thoroughly gave each caller and the Advertiser newsroom the facts.
The really scurrilous part of this is that anyone recruited now to HNA is apt to be laid off in the near future. With only one-half the current revenue, Gannett will have to downsize.
Gannett is competing with only themselves, at the moment. We cannot wait until March 15th to get our licks in. We hope Honolulu will join us in teaching an arrogant, legalistic, monopoly-loving eastern bureaucracy a good lesson.
We have some ideas that we hope will help us put out a better paper. One, which you might have read about, is the 'virtual newsroom.' Newspapers are in the information business, but most haven't taken advantage of many of the possibilities of modern information technology. News gatherers ought to be where news is happening, not tied to a desk in an office, so we plan to put mobile computers, digital cameras and cell phones to work, spreading our workforce around the island. We think this has benefits for our staff, for the paper and for readers. Another has been to change our incentives. Our new contract with the Guild includes bonuses payable when our daily circulation reaches 90,000 and when our new Sunday edition hits 100,000. We think setting goals like these will insure the whole company works together.
We're also establishing an employee-ownership plan under which our people will own five percent of the company, each with an equal share. The key point is to encourage people to work together, knowing that when any one does well, everyone succeeds.
Over the years, salary scales for Honolulu's two dailies have discouraged hiring bright young people from Hawaii's journalism schools. Cub reporters are virtually extinct here. The minimum scale for beginners with no experience whatsoever is $830 per week, while experienced staffers at top scale get about $1,080. Few editors are willing to take chances on beginners, no matter how promising, when proven veterans can be had for 30 percent more.
The result? Too many of Hawaii's new talents go to the mainland or stay out of print journalism entirely while our newsrooms are disproportionately staffed with mainland imports. Compared to the community we cover, our newsrooms are also much older -- 73 percent of the Star-Bulletin's full-time news employees are over 40.
Experience is valuable, of course, but there can be too much of a good thing. Energy, new ideas, understanding what younger readers want to read are also vitally important to a good newspaper.
Our new contract allows editors to take chances and bring new people with potential on board at $550 per week, a respectable, competitive entry-level wage. These beginners can learn on the job while moving rapidly up the pay scale.
We'll be working closely with the University of Hawaii, Hawaii Pacific University and other journalism programs to use our internship programs and entry-level journalism jobs to open career paths for Hawaii's young people.
Many people in this room were part of S.O.S., Save Our Star-Bulletin. That combined community effort was a key reason for the Star-Bulletin's survival. It saved an essential daily voice in Honolulu, but the work doesn't end on March 15. It's just the beginning.
We want to preserve the spirit of working together for the Star-Bulletin cause. So, we built into our new labor agreement a concept we call Ho'okupono S.O.S.
Ho'okupono can be loosely translated as 'doing the righteous thing' or just 'do the right thing.' It's about setting aside old rules and restrictions and working together to get the job done, regardless of jurisdiction, job title, bargaining unit status or salary classification.
The idea is to build on the spirit of Save Our Star-Bulletin and to work together as efficiently as we can, pulling together toward a common goal: a great and successful newspaper. We've agreed to set aside petty concerns about who writes headlines and who takes pictures, for example, and empower our people to do whatever needs doing , whenever it needs to be done.
Cross training will be part of our Ho'okupono program and we expect it will make working at the Star-Bulletin more interesting and satisfying at the same time that it improves our paper.
The job ahead of us is huge. Assembling the people and systems to give our writers the support they need to compete effectively in less than 90 days is an immense task. With the help of the community and a lot of hard work, we think we can do it.
Thank you sincerely for your support.
A question and answer period followed.
Bulletin shutdown archive