Thursday, October 28, 1999

Several media
companies back
shutdown of
the Star-Bulletin

They ask to be heard in
the appeal seeking to
carry out the closing

By Susan Kreifels


Star-Bulletin closing after 117 years Several large newspaper companies are supporting an appeal of a federal judge's order delaying the shutdown of the Star-Bulletin.

Eight media conglomerates, along with the Associated Press and the Newspaper Association of America, filed a friends of the court brief yesterday with the 9th U.S. Circuit Court of Appeals.

The brief supported arguments by Honolulu Advertiser owner Gannett Pacific Corp., Star-Bulletin owner Liberty Newspapers Limited Partnership and the Hawaii Newspaper Agency, which filed papers yesterday in the San Francisco court.

Gannett and Liberty asked the court to reverse a decision by U.S. District Judge Alan Kay, who granted a preliminary injunction Oct. 13 temporarily halting plans to close the Star-Bulletin.

Gannett and Liberty said Kay erred when he prohibited them from amending their newspaper Joint Operating Agreement, or JOA. They said the amendment is exempt from antitrust scrutiny because the 1970 Newspaper Preservation Act stated it was not unlawful to amend a JOA entered into before the act was passed -- as long as the amendment was filed with the Department of Justice and did not add a newspaper to the agreement. The Advertiser and Star-Bulletin formed their JOA in 1962.

The brief also said Kay's reliance on antitrust laws to justify the continued publication of the Star-Bulletin violates the First Amendment.

Kay said the agreement between Gannett and Liberty went against the intent of the Newspaper Preservation Act, which granted antitrust exemption to newspapers run under JOAs as long as they maintained separate editorial voices.

Media analysts said it was not surprising that the media companies, some of which are involved in joint operating agreements themselves, would file a supporting brief against Kay's ruling.

"It puts limits on what JOA publishers can do," said Stephen Barnett, a law professor at the University of California at Berkeley. "It's not surprising that JOA publishers dislike that result."

The companies were Hearst Corp., E.W. Scripps Co., Advance Publications Inc., Media General Inc., MediaNews Group Inc., Thomson Newspapers Inc., Cox Enterprises and Pulitzer Inc.

The supporting brief said the authors "share a common interest in the role of the First Amendment in preserving and protecting press autonomy, interpretations of the Newspaper Preservation Act, and application of the antitrust laws to the publishing industry."

The brief said Kay's "unprecedented order compels a newspaper that wishes to close, to continue publication. That order directly conflicts with the Supreme Court's repeated holdings that forced speech violates the First Amendment."

An expert on media monopolies said, however, that the newspaper industry is inconsistent in its arguments. Ben Bagdikian, former dean of the graduate school of journalism at UC-Berkeley and author of "The Media Monopoly," said newspapers years ago were clamoring for the government and courts to intervene in the free market to keep publications open by passing the Newspaper Preservation Act.

"Now they're saying government has no business interfering in the maintenance of a paper," Bagdikian said. "They spoke very passionately in 1970 about wanting to give communities two voices. Now they're paying to give communities only one voice.

"They can't have it both ways."

The state attorney general asked Kay for a restraining order to preserve the newspaper's operations and prevent further erosion until the court can consider the merits of the state's lawsuit challenging the termination agreement -- the amendment to the JOA -- between Liberty and Gannett.

Kay said Liberty made no effort to sell the Star-Bulletin before entering the termination agreement with Gannett, which is to pay Liberty $26.5 million. According to the JOA amendment, the Star-Bulletin was to close Saturday.

The friend-of-the-court brief filed by the newspaper organizations said the First Amendment protects newspapers against compelled publication. Kay's action was "the very kind of editorial management that the Constitution reserves to publishers," the brief said.

The brief also said that an amendment to the joint operating agreement cannot injure competition or violate antitrust laws because the Advertiser and Star-Bulletin have not been competitors since 1962, when the two newspapers created their JOA and a single agency was formed to set advertising and subscription rates for both newspapers. The papers agreed on how much each would be paid out of the profits.

Shutdown announcement
Kay issues preliminary injunction
Text of injunction halting shutdown
Text of refusal to lift injunction
Emergency stay denied

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