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Friday, December 22, 2000



SOLD!

Star-Bulletin
buyer to add
morning edition

It will debut on March 16
when he takes ownership and
will circulate on Oahu and
the neighbor islands


By Rick Daysog
Star-Bulletin

The buyer of the Honolulu Star-Bulletin said today that he will publish a morning edition that will compete head-on with the rival Honolulu Advertiser.

One day after the Advertiser announced plans for a new afternoon edition, David Black, president of Canada-based Black Press Ltd., said he will add an a.m. edition to complement the Star-Bulletin's afternoon product.

The new morning edition, which will circulate on Oahu and the neighbor islands, is part of a plan to boost the Star-Bulletin's daily circulation to about 100,000 from the current 63,500, Black said.

"We will publish as good a newspaper as we can," said Black. "We believe that there is room in the market for two separate newspapers and we hope the people of Hawaii will support us."

Black, who recently acquired Midweek, a 270,000-circulation weekly newspaper, said the morning Star-Bulletin will be available on March 16 -- the date he is scheduled to assume ownership of the 118-year-old newspaper.

He said he doesn't expect to add additional staff for the new edition.

Black, who will also add a Sunday edition to the Star-Bulletin's six-days-a-week coverage, said he had been planning a morning edition for several months in anticipation of moves by the Advertiser's owner, Arlington, Va.-based Gannett Co. Black said it was "ironic" that Gannett will have an afternoon edition, when a year ago the company said there was no market for an afternoon daily in Honolulu.

In September 1999, when the Star-Bulletin's current owner, Liberty Newspapers Limited Partnership, announced it was shutting down the paper, Liberty and Gannett argued that the Star-Bulletin was losing money. Attorneys for Gannett later said the Star-Bulletin was losing $10 million a year.

Black believes that Gannett's foray into the afternoon market is a predatory move, given the company's previous statements about the Star-Bulletin's financial condition. "Clearly, they're not doing this because they believe they can earn a profit," he said. "This is simply predatory behavior and a continuation of their monopolistic approach."

Mike Fisch, the Advertiser's president and publisher, disagreed with Black's remarks. Fisch said the costs of an afternoon edition are less than those of an afternoon-only newspaper.

Fisch said the addition of a p.m. edition is warranted, given the new competition that the Advertiser will face starting March 16. On that date, Black will take over the Star-Bulletin and the joint operating agreement with the two dailies will terminate, forcing the papers to compete head on for readership and advertising.

Under the JOA, which has been in place since 1962, the Advertiser and the Star-Bulletin share advertising and circulation functions but retain separate editorial voices.

According to Fisch, the afternoon edition will help the Advertiser increase its circulation to the current combined circulation of the Star-Bulletin and the Advertiser -- about 160,000 readers daily.

Fisch said the company plans to increase its news staff but declined to specify how many jobs it plans to add. He also declined to project the cost of the new edition but did say the Advertiser plans to spend about $5 million to promote both of its editions.

Richard McCord, a Santa Fe, N.M.-based writer and author of "The Chain Gang: One Newspaper versus the Gannett Empire," likened the Honolulu situation to what Gannett is trying to do in Green Bay, Wis.

McCord said the Gannett-owned Green Bay Press-Gazette recently announced plans for a morning edition in an attempt to shut down the smaller, independently owned Green Bay News-Chronicle. Gannett, he said, is attacking the afternoon slot in Honolulu in an attempt to preserve its monopoly.

But McCord said Black's plans to begin a morning edition follows a similar strategy.

"What you have is very open competition and that's what it's supposed to be about," McCord said. "It's much better than the hypocrisy of shutting down the Star-Bulletin so Gannett can make more money."

John Morton, president of Morton Research, a Silver Spring, Md.-based media consulting firm, said both companies face considerable costs in operating separate morning and afternoon editions. Morton, who previously represented an investor who expressed an interest in the Star-Bulletin when it was put up for sale, said the additional editions will likely reduce profit margins for the Advertiser and the Star-Bulletin.

"There's a very large question whether there is a market for two newspapers in Honolulu, and without question there isn't a market for four," said Morton.

"But having committed themselves, I think neither side is willing to back off."



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