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Experts mixed A Canada-based newspaper chain's pending purchase of the Honolulu Star-Bulletin may help save other afternoon U.S. newspapers from closing, some industry observers say.
on industry impact
of Bulletin deal
The Justice Department
Top Advertiser editor to retire
appears to be taking a closer look
at joint operating agreementsBy Tim Ruel
Star-Bulletin
The court-supervised sale came under the scrutiny of the U.S. Justice Department, which may be rethinking how it enforces a 1970 law that allows newspapers to form joint operating agreements, said Mike Hoyt, executive editor for the Columbia Journalism Review magazine. Renewed scrutiny from the department may prevent other newspaper owners from prematurely terminating their agreements to close their competition, he said.
But Ben Bagdikian, retired dean of graduate journalism at the University of California at Berkeley, thinks it's too late to save other cities from losing a competing newspaper.
"When we consider that 99.9 percent of all papers are monopolies ... there's not much of an impact to be had," said Bagdikian, author of "The Media Monopoly."
The Star-Bulletin and the morning Honolulu Advertiser have shared a joint operating agreement since 1962, even before the 1970 Newspaper Preservation Act took effect. Under a JOA, competing newspapers can share circulation, production and advertising operations, but maintain separate editorial departments.
Last year, the Star-Bulletin's owner, Liberty Newspapers Limited Partnership, announced it was ending its JOA and closing the Star-Bulletin effective Oct. 30, 1999. In exchange, Liberty would receive $26.5 million from Gannett Co., owner of the Advertiser and the Hawaii Newspaper Agency, which handles the business functions of both papers.
A community group and the state attorney general's office separately sued to block the closing of the Star-Bulletin, arguing the deal violated antitrust law.
The suits, which were later combined, eventually kept the paper open under a court injunction that was supported by a so-called "friend-of-the-court" filing by the Justice Department. Florida-based Liberty and Arlington, Va.-based Gannett agreed in April to put the Star-Bulletin up for sale in return for the combined lawsuits being put on hold.
On Thursday, David Black of Victoria, B.C.-based Black Press Ltd. reached an agreement in principle with Liberty and Gannett to buy the Star-Bulletin for $10,000. If Black meets a couple of conditions involving newsprint and union contracts by the end of the month, Black Press will own the Star-Bulletin beginning March 15.
If the sale goes through and the Star-Bulletin survives on its own, Hawaii could help set a precedent, said Stephen Barnett, a Berkeley law professor and an expert in joint operating agreements. "It could put a brake on the dismantling of JOAs in other cities."
In the previous two decades, joint operating agreements were terminated -- and a newspaper was closed -- in St. Louis, Miami, Pittsburgh and several other cities, big and small. Meanwhile, the number of afternoon papers nationwide has been sliced almost in half to 781 as of 1998 from 1,388 in 1980, according to Editor & Publisher magazine. There are about a dozen JOAs still operating in the United States.
While the Star-Bulletin's situation and the Justice Department's interest is unusual for the industry, there have been at least two other cases where the department and the courts have been involved in stopping a newspaper's closure.
In 1983, the Newhouse media empire agreed to close its afternoon St. Louis Globe-Democrat in return for a share of the profits of the paper's morning competitor, the St. Louis Post-Dispatch. The Justice Department stopped the deal, forcing Newhouse to shop for buyers, and supervised the paper's sale to Jeffrey Gluck. The Globe-Democrat, weakened by suburban competition and a long strike, died in bankruptcy two years later, however.
The department has been traditionally lax in policing newspaper joint operating agreements, Barnett said. But its recent scrutiny in Hawaii and San Francisco show that Justice is stepping up its efforts, he said.
Earlier this year, New York-based Hearst Corp. sold the afternoon San Francisco Examiner to publisher Ted Fang so Hearst could buy the larger San Francisco Chronicle for $660 million and end a JOA between the two.
As part of the deal, Hearst is giving Fang a three-year, $66 million subsidy.
The Justice Department, which had been probing the case, said it ended its investigation after Hearst said it had found a buyer for the Examiner and would not close the paper as it had originally planned.
"You're getting more scrutiny by the Justice Department of newspapers nationwide," said Beverly Keever, professor of journalism at University of Hawaii-Manoa.
Bagdikian, however, maintains that the Star-Bulletin's sale won't have a far-reaching impact because it is so unique. For one, its readers don't usually buy outside publications to get local news, leaving them with fewer alternatives, he said. Also, an afternoon paper in Hawaii's time zone can report the day's business news and stock quotes.
Still, Eric Newton, historian for the Newseum news museum in Arlington, Va., argues that Hawaii and San Francisco are like other cities in a more general way: Both are ethnically diverse, pro-union, progressive and more likely to back a newspaper's survival.
"The newspaper of America is really a creature of its locality. It's totally up to each community," he said.
Communities that fight to keep a second editorial voice have a better chance of winning, while places with citizens who don't care are more likely to lose competing papers, and Honolulu and San Francisco fought, Newton said. "It's true that we get the news we deserve."
One question that remains unanswered, however, is the impact of this year's as-yet undecided presidential election on future investigations by the Justice Department into violations involving the Newspaper Preservation Act.
"Historically, you would expect a Republican administration to be less aggressive," Barnett said. But he noted that the department forced the sale in St. Louis under the Republican watch of President Reagan. Overall, both parties have been lax when it comes to newspapers, he said.
"You never know. It could be tighter or more lenient," he said.
Bulletin closing archive
