Isle groups buySeveral isle business leaders are acquiring a minority stake in the Honolulu Star-Bulletin and MidWeek.
stake in Bulletin
Newspapers' ownerWho the players are
praises local investors
By Rick Daysog
Real estate and media investor Duane Kurisu, banking executive Warren K. K. Luke and his family, attorney Jeffrey Watanabe and his wife, Lynn, and Island Holdings Inc., which is represented by Colbert M. Matsumoto and Franklin M. Tokioka, have reached an agreement to acquire an interest in the two local newspapers.
The financial terms were not disclosed and the deal is not expected to affect the daily operations and the editorial contents of the two companies, which employ about 480 people.
The new ownership group means that members of the local business community will be involved in running the Star-Bulletin for the first time since 1971.
David Black, whose Black Press Ltd. owns the Star-Bulletin and MidWeek, described the new partners as "long-term patient investors" who "want to ensure that two dailies remain in Honolulu forever."
"These are business people whose track records speak for themselves," said Black. "I think it's important for a major daily to have local ownership."
As a result of the deal, Jeffrey Watanabe, Luke, Kurisu and Matsumoto will serve as directors of MidWeek Printing Inc. and Oahu Publications Inc., which is the parent of the Star-Bulletin.
Black -- who will retain a majority interest in the two newspapers and will be represented on the boards of the companies -- said he is talking to one or two additional investors, whom he declined to identify.
Proceeds from the deal will not go into Black Press but will be used to pay off the newspapers' debt, Black said.
Black, who invested more than $20 million in both newspapers when he acquired the Star-Bulletin and MidWeek last year, said he will match the amounts invested by the local families.
Black said he had always intended to bring in local shareholders when he bought the 65,000-circulation Star-Bulletin and 270,000-circulation MidWeek last year.
He said the local shareholders will give the Star-Bulletin and MidWeek a competitive advantage in its circulation war with the Gannett Co.-owned Honolulu Advertiser.
Black said he expects his Hawaii operations to make a $2 million profit this year, despite the tough competition from Gannett. He noted that the Star-Bulletin currently has 35 percent to 40 percent share of the local advertising market.
"We have a new-found credibility as of today," Black said.
"One of the benefits of having tough financial investors buy in is that it signals that they have seen the books."
The move also will go along way in calming concerns fanned by the Star-Bulletin's competitors about its long-term future, added Don Kendall, president of Oahu Publications and MidWeek.
Last November, the Star-Bulletin and MidWeek laid off 19 noneditorial employees due to declining ad revenues after the Sept. 11 terrorist attacks. Employees at both papers also took significant pay cuts.
"No matter what we said or did, there was always some question as to how long we were going to be in Hawaii," Kendall said. "This should put a stop to that."
Mike Fisch, president and publisher of the Advertiser, congratulated the Star-Bulletin's new investors, saying he looked forward to the continued competition with the daily newspaper.
"I think it certainly provides some local involvement that hadn't been there," Fisch said.
The deal means that members of the Hawaii business community will be involved in running the Star-Bulletin for the first time since 1971, when local financier Chinn Ho sold the Star-Bulletin to Gannett.
Founded in 1871 as the Evening Star, the Star-Bulletin is the state's oldest newspaper and its second-largest behind the Advertiser.
Black took over the Star-Bulletin last year after the newspaper's previous owner, Rupert Phillips, announced plans to shut it down after the Advertiser agreed to pay him $26 million to end the 37-year-old joint operating agreement between the two newspapers.
Phillips was forced to sell the paper after Attorney General Earl Anzai and a local citizens group, Save Our Star-Bulletin, sued to stop the closure.
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The Star-Bulletin's new investors include several kamaaina families that play a big role in Hawaii's business community. Here's a snapshot of the local shareholders:
Warren K. K. Luke is chairman and chief executive officer of Hawaii National Bank and its parent Hawaii National Bancshares. He also is a director of Aloha Airlines, a former director of Federal Reserve Bank of San Francisco and is a past president of the Western Independent Bankers Association. The Luke family company, Loyalty Enterprises Ltd., is a major landowner in the Mapunapuna area.
Jeffrey Watanabe is chairman of the executive committee of the Watanabe Ing & Kawashima law firm, which represents the Star-Bulletin. He also sits on the boards of Hawaiian Electric Industries Inc., Grace Pacific Corp., First Insurance Co., Punahou School and the Sesame Workshop.
Colbert M. Matsumoto is president of Island Holdings, which has annual revenues of $100 million and owns Island Insurance Co. He also serves on the board of CB Bancshares Inc., the parent of City Bank. Between 1996 and 2000, Matsumoto served as the court-appointed master of the Kamehameha Schools and initiated many of the key reforms of the $6 billion charitable trust.
Franklin Tokioka is chairman of Island Holdings Inc., which was founded by his father, Masayuki Tokioka. He also is a director of ANA Hotels Hawaii Inc., Atlas Insurance Agency, Nitto Hawaii Inc. and Oceanic Cablevision. Tokioka was one of the early investors in Oceanic Cable, now owned by AOL Time Warner Inc.
Duane Kurisu is chairman of PacificBasin Communications LLC, which publishes Honolulu magazine and Hawaii Business magazine. Kurisu also is a co-founder of the Hawaii Sports Network and is chairman of Hawaii Winter Baseball. Earlier this week, he acquired radio station KCCN. Kurisu is a partner in the commercial real estate firm of Kurisu & Fergus, is part-owner of the San Francisco Giants and is a member of the University of Hawaii Board of Regents.
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