Tuesday, October 5, 1999

Star-Bulletin closing after 117 years

Journalism law expert: State lawsuit has merit

One says the only way to prove
the Star-Bulletin is failing is to
put the newspaper up for sale

By Gregg K. Kakesako
and Mary Adamski


A journalism law professor believes that a state lawsuit aimed at preventing the closing of the Honolulu Star-Bulletin has merit.

Stephen Barnett, a law professor at the University of California at Berkley, said: "I think they (state lawyers) have a good case because Liberty (the owner of the Star-Bulletin) did not offer it for sale."

Barnett said State Attorney General Earl Anzai also might have a good case for a temporary restraining order to block the shutdown of the afternoon paper planned for Oct. 30.

"I think the Justice Department has required papers to be placed on the market before such action (as closing the Star-Bulletin) was allowed ... it's strange that it's not happening in Honolulu."

Ben Bagdikian, retired dean of the graduate school of journalism at the University of California at Berkeley, added he believes a lawsuit by the highest legal officer in the state would be "fruitful."

Bagdikian added that he doesn't know of any other state where such an action has been done to prevent a paper from going under. "As far as I know no other state's attorney general has taken such an action."

Meanwhile, the unions that represent workers facing layoffs with the closing of the Star-Bulletin applauded the state's intention to intervene in court.

"Our hope was that the attorney general would look at it and come to the same conclusion we did," said council spokesman Wayne Cahill, administrative officer of the Hawaii Newspaper Guild. He said the unions provided information about the closing and the joint operating agreement between the Star-Bulletin and Honolulu Advertiser.

Anzai said yesterday the state will challenge the closing, announced Sept. 16 by Liberty Newspapers, because "we believe it is in violation of antitrust law." The state has not filed anything in court.

Liberty's principal investor Rupert Phillips told employees the company decided to end its 20-year agreement with Gannett Co., owner of the Honolulu Advertiser, after six years because the return on its investment was not satisfactory.

Barnett, who has studied the issues surrounding joint operating agreements similar to that enjoyed by the Star-Bulletin and the Advertiser, said the federal law allowing such agreements requires the failing newspaper to be placed on the auction block before it can be merged.

"The only way to show that it's a failing newspaper is to have it placed on the market," said Barnett, who is an authority on the 1970 federal newspaper preservation law that exempts newspapers from antitrust laws and authorizes joint operating agreements.

Bagdikian said Anzai's proposed action would let the justice department know that there was high-level state interest in the matter that goes beyond the concerns of the community.

"It would certainly attract more attention with justice than just a citizen's protest," Bagdikian added.

Under the agreement, Gannett will pay Liberty an undisclosed sum based on the savings Gannett could expect from being relieved of its obligations under a joint operating agreement between the two newspapers.

Phillips has not responded to inquiries for comment.

Cahill said: "We believe they broke the trust they had with the public when Gannett (owner of the Advertiser) paid them off for closing the Star-Bulletin."

The unions have sought additional severance benefits such as extended medical and dental coverage, severance pay for part-timers and early retirement options for the 150 people who stand to lose their jobs. Negotiations on effects of the closing began last week and will resume in the last week of October when a Gannett representative returns to Hawaii, Cahill said.

Star-Bulletin closing Oct. 30, 1999

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