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Wednesday, September 6, 2000

Star-Bulletin closing after 117 years

L.A. publisher
joins ranks of
Bulletin bidders

Hadland Communications
joins Black Press Ltd. as
one of the bidders

Visiting Black outlines some of his plan

By Rick Daysog

A Los Angeles company that owns five weekly newspapers has submitted an offer for the Honolulu Star-Bulletin, making it the second mainland publisher to bid on the 118-year-old afternoon daily.

Steve Hadland, president of Hadland Communications Inc., confirmed that his company turned in a bid for the 63,000-circulation Star-Bulletin on the Friday court-imposed deadline to newspaper broker Dirks Van Essen & Murray.

Hadland -- whose offer is backed by several outside investors he declined to identify -- said he is prepared to make a substantial investment to beef up the Star-Bulletin's circulation and its news coverage.

Hadland declined to go into specifics but noted that Honolulu is ripe for competition between two independent dailies.

"This is an exciting and vibrant market," he said.

Hadland Communications, through its Coastal Community Newspapers division, owns five weekly newspapers in the Los Angeles area with a combined circulation of more than 70,000. The publications include 16,000-reader Culver City News, the 25,000-circulation Santa Monica Bay News, the 15,000-circulation Los Angeles Tribune, and the Westchester and Playa del Rey News with a combined weekly readership of about 16,000.

Hadland Communications also operates a commercial printing operation in Los Angeles.

The Los Angeles company's proposal is separate from a bid submitted by Canadian publisher Black Press Ltd.

Black steps forward

David Black, president of the British Columbia-based company, yesterday said he plans to invest "tens of million of dollars" in the Star-Bulletin to compete with Gannett Co., which owns the 104,000-circulation Honolulu Advertiser.

Black, whose company operates 80 community newspapers in Canada and Washington state, declined to discuss details but he confirmed that his proposal calls for a Sunday edition to go along with the Star-Bulletin's Monday through Saturday coverage.

Typically, a Sunday edition generates about 35 percent of a newspaper's advertising revenues, Black said.

He noted that Gannett, the nation's largest newspaper publisher, is a tough competitor so he would have to be aggressive to succeed.

"The objective is to save the Star-Bulletin," said Black. "You can't do that with one hand tied behind your back."

Black, who is in Honolulu this week, also told local television station KITV that he plans to add 200 to 300 new employees. The Star-Bulletin currently employs 97 editorial staffers but under the terms of the sale, the Star-Bulletin would have to build its own circulation and advertising staff.

McClaran-Heftel hui

In addition to Black and Hadland, Kauai publisher Peter McClaran said today that his group and a group that includes former Hawaii congressman Cec Heftel have submitted a combined bid.

Under the terms of the court-supervised sale of the Star-Bulletin, the bids will be turned over to U.S. Magistrate Barry Kurren, who has set a Sept. 15 deadline to review and select a buyer.

The Star-Bulletin's owner, Florida-based Liberty Newspapers Limited Partnership, put the paper for sale in April after the attorney general's office and a community group, Save Our Star-Bulletin, filed antitrust lawsuits in U.S. District Court.

The suits were in response to Liberty's announcement last September that it was going to close the Star-Bulletin and terminate its joint operating agreement with the Advertiser's owner Gannett Co. in exchange for a $26.5 million payment. Under the JOA, both newspapers share printing, advertising and distribution costs but retain separate editorial voices.

Under an agreement between Gannett and Liberty, if the Star-Bulletin is sold, Liberty Newspapers would receive about $25 million from Gannett to end the joint operating agreement.

Both Black and Hadland declined comment when asked if they plan to operate the Star-Bulletin as an afternoon or morning newspaper.

At least one local advertising executive believes that there is room in Honolulu's ad market to support two daily newspapers.

Martin Schiller, president of the Schiller Group, said the Star-Bulletin can compete head-to-head with the morning Advertiser but only as an afternoon newspaper.

"From my perspective, the Star-Bulletin has to market itself stronger for delivering today's news today," said Schiller.

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