Bulletin faces
more challenges
in future
The Star-Bulletin
faces stiff competition
from the AdvertiserBy Rob Perez
Star-BulletinIn the frantic final days before the official start of Hawaii's newspaper war, Honolulu Star-Bulletin editors trying to overcome one problem after another on a new computer system said it would take a miracle to get a paper published today.
Saga could have national implications
Here is the miracle.
The Star-Bulletin yesterday left its old newsroom and a 39-year-old joint operating agreement with the rival Honolulu Advertiser to begin publishing under the ownership of David Black, who bucked a national newspaper trend to ensure that Hawaii's oldest daily didn't shut down.
Today's morning edition is the first under Black's stewardship -- and the first morning edition for the 119-year-old afternoon paper. The Star-Bulletin will now publish mornings and afternoons.
"We're so pleased it has come together today," Black told Star-Bulletin staffers yesterday.
"It's a great day for the Star-Bulletin and a great day for Hawaii," said Don Kendall, president of Oahu Publications, which publishes the Star-Bulletin and MidWeek, the free weekly mailed to about 280,000 isle households.
Yesterday marked the closing of a November sales agreement that Black, president of Victoria, British Columbia-based Black Press Ltd., signed to acquire the Star-Bulletin.The sale was orchestrated to settle antitrust lawsuits brought by the state and Save Our Star-Bulletin, a citizens group, against Liberty Newspapers LP, the paper's previous owner, and Gannett Co., owner of the Advertiser. Gannett in 1999 agreed to pay Liberty $26 million to end the JOA and close the Star-Bulletin. The state claimed that was an antitrust violation. Gannett and Liberty denied the charge, but the litigation came to an end yesterday.
Black's decision to purchase the Star-Bulletin represents a more than $20 million gamble -- his investment in the operation -- in an era when afternoon newspapers are disappearing. The Star-Bulletin's own circulation has steadily declined in recent years and now totals around 60,000, compared with the Advertiser's roughly 110,000 daily.
But Black expects the Star-Bulletin's circulation to jump to roughly 100,000 almost right off the bat, thanks mainly to sales from the new morning edition.
Gannett likewise expects its circulation to jump to about 150,000 to 155,000 within the next three months, partly because of the launch of a new afternoon edition that debuts today.
Although some people are skeptical about whether Oahu can support two daily papers with two editions each, Hawaii will be the clear winner in the newspapers' costly fight for readers and advertisers, people inside and outside the industry say.
"The readers and the community are going to benefit. They're going to get more stories, deeper stories, more photos," said Mike McKenna, a Kailua auto dealer.
The transition to the new Star-Bulletin has been a rocky one, punctuated by technical and operational snafus and disgruntlement among some staff members.The newly modified presses at the Kaneohe plant where the Star-Bulletin now is printed were just completed last night, meaning the Star-Bulletin wasn't able to do any dry runs. That's akin to putting on an elaborate stage production without having a dress rehearsal.
In addition, the Star-Bulletin redesigned the paper, added the morning edition, is debuting a Sunday edition April 1, moved into a new newsroom and installed a new computer system -- all in the span of a few months. Any one of those tasks alone typically would take a newspaper months just to plan.
"We're going to have some glitches," Black said.
With the newspaper war entering its first day, Black already raised questions about a new Gannett offer to give Sunday-only Advertiser subscribers its new afternoon edition or the morning one each day at no extra price for the next 24 weeks. Black said that seemed like predatory pricing.
But Michael Fisch, Advertiser publisher, said the practice was essentially no different from the Star-Bulletin offering a free Sunday paper to subscribers who prepay their daily subscriptions for certain periods.
Kendall, though, said the prepaid subscribers essentially get a seventh paper at a discounted subscription, which is different from paying only for Sundays and getting the rest of the week, too.
"They're turning into a free paper," he said.
Todd Miller, a Washington, D.C., antitrust lawyer who helped the SOS group, raised similar questions, especially considering the Advertiser is offering its existing morning edition, which is not a new product, as part of the package.
"It really does strongly suggest that Gannett's motive is to snuff out the new Star-Bulletin before it gets its feet firmly on the ground," Miller said.
But Stephen Barnett, a University of California law professor, said such a practice clearly is allowed by antitrust law.
"That's competition. If Mr. Black doesn't like competition, he should go back to Vancouver," Barnett said.
Yesterday's sale ended months of uncertainty for the Star-Bulletin, dating to the September 1999 announcement by Liberty executive Rupert Phillips to close the paper.
Phillips declined comment except to say, "We're very happy the last year and a half is over."
With the ending of the JOA, Gannett still must pay Liberty about $23 million.
Moving, losing loved ones and changing employment are three of life's big stresses. Nostalgia marks
By Leila Fujimori
move to Bulletin’s
new home
Star-BulletinHonolulu Star-Bulletin staffers got hit with all three yesterday.
What was to be a day of jubilation began as a day of mourning.
Tears flowed freely as staffers hugged beloved colleagues who were not joining the staff at the new Star-Bulletin.
Some were forced to retire. Others were not hired.
Honolulu Newspaper Agency employees and Associated Press personnel filed through the newsroom bidding old friends goodbye and good luck.
"We wish you guys well," said an HNA employee. "Kick some butt."
"That's been the most touching thing, to have all the people from the different departments come and give us hugs," said reporter Mary Adamski. "I've worked in this building since 1962, and all the faces in the back shop and downstairs are friends."
Despite the sadness, Adamski said: "We're not walking out to the unemployment line. We're marching to the new Star-Bulletin."
Some got nostalgic over leaving the historic News Building on Kapiolani Boulevard, home to the Star-Bulletin for 39 years.
"It was the only place I've ever worked in Hawaii," said features writer Tim Ryan.
But reporter Pat Omandam felt differently.
"It feels actually exciting, exhilarating to get out of this building that has meant doom and gloom for the past 18 months," he said. "We've got a fighting chance to live, and we're going to make the most of it."
The transition means a change of ownership and a change of employer. "It will feel like starting a new job, except it's my old one," said reporter Gordon Y.K. Pang.
As the employees walked down the old News Building staircase and out the front door, HNA and Honolulu Advertiser staffers applauded and waved, moving some to tears.
Star-Bulletin staffers left their old home at the News Building at noon yesterday in a march to the new newsroom at Restaurant Row, led by bagpipers.
New Star-Bulletin employees and supporters, including members of the Save Our Star-Bulletin, also joined the march.
They were greeted by dozens of cheering Oahu Publications Inc. employees, its president, Don Kendall, and owner David Black and his wife, Annabeth. The Rev. Dr. Kaleo Patterson blessed the new location.
Bulletin sale archive
The newspaper you are reading right now represents "a reversal of what's been happening for more than 30 years in American cities," according to Ben Bagdikian, retired dean of the University of California at Berkeley Graduate School of Journalism. It’s independence day
Insiders say events here
By Erika Engle
could have far-reaching effects
Star-BulletinThe number of cities with two daily newspapers has shrunk to the lowest level in U.S. history, he said.
"I think that an independent buyer has bought a competing newspaper in a large city is an interesting and important step in American urban journalism," Bagdikian said earlier this week.
The Honolulu Star-Bulletin was to have been closed by former owner Liberty Newspapers Limited Partnership at the end of October 1999, citing declining circulation and revenue.
The Star-Bulletin and The Honolulu Advertiser had been publishing under a joint operating agreement administered by the Hawaii Newspaper Agency. Under the JOA the papers shared circulation, printing and advertising, but maintained separate editorial operations. Both the Advertiser and HNA are owned by Virginia-based Gannett Co. The Hawaii Newspaper Agency was dissolved at midnight, with all operations now under The Honolulu Advertiser company name.The shutdown announcement spurred government- and grassroots-sponsored litigation aimed at keeping the Bulletin open. Today the Star-Bulletin has published its first edition under new owner David Black, of Canada-based Black Press Ltd.
Bagdikian said that if the newly independent Star-Bulletin succeeds in its mission, "other similar enterprises" may also be encouraged.
University of Hawaii at Manoa journalism professor Beverly Keever agrees.
"Honolulu has shown that it can be done," she said, proving that "the why for doing it is to maintain diverse editorial voices for readers, better advertising rates for businesses and jobs for citizens."
Keever says Honolulu's test case has already had a ripple effect, "It alerted San Franciscans to block the closing of the Examiner."
She also said a new JOA just established in Denver will have stricter conditions to prevent another attempted "Honolulu-type" closure, in which Gannett was to pay Liberty $26 million.
The San Francisco Chronicle and the San Francisco Examiner until recently published under a JOA.
The Hearst Corp. which founded the Examiner, bought the Chronicle, and late last year sold the Examiner under anti-trust pressure from the government. Publisher Ted Fang purchased the Examiner and will receive a $66 million dollar subsidy for three years from Hearst.
Bruce Brugmann, publisher of alternative weekly newspaper The San Francisco Bay Guardian, has long been a vocal critic of the so-called "corporate" newspaper scene and has written colorful editorials on JOAs and their large players.
"There is nothing more important to the health and welfare of a community than a vigorous, competing local press," he said, "with two daily papers competing head-on and a strong alternative weekly paper."Perhaps, for once," he said, "the crybaby millionaire publishers in a JOA city have been stopped in their drive to become crybaby billionaire publishers in a one-newspaper town."
Events in Honolulu may prove important for the newspaper industry as a whole, according to University of California at Berkeley law professor Stephen Barnett.
"I think the effort in Hawaii looks like the most substantial effort made so far to establish real competition in the ashes of a JOA," he said.
Barnett said Black's effort will "ignite real competition -- because the Star-Bulletin is a strong paper and because Black has significant resources and is no newcomer to newspapers."
Barnett also said the purchase of MidWeek publisher RFD Publications makes it all the more likely that the Star-Bulletin will succeed for the printing, advertising sales and circulation resources the transaction provided.
Still, Bagdikian says the Star-Bulletin is in for an "uphill battle."
"One can't assume that the competitor is going to lie in bed comfortably without a reaction." He said advertisers in Honolulu may expect attempts at coercion, "for which Gannett in other places has been rebuked by the courts."
Mike Fisch, president and publisher of the Honolulu Advertiser, took exception to Bagdikian's comments.
"We take our legal responsibility very seriously," he said, "from the standpoint of how we conduct ourselves in the marketplace."
"We have no intention of breaking any laws, but we do intend on competing vigorously -- with all of the media offerings that exist."
Bagdikian has seen cases where Gannett has killed its competition.
"There have been cases in Salem, Oregon, and Santa Fe, New Mexico, where they did it in ways that a court decided was improper -- by intimidating advertisers," Bagdikian said. Where Gannett's had to compete "by straightforward journalism," he said, "it has not always succeeded."
Fisch calls the characterization "unfair."
"Those are 15-year-old issues, and from my point of view do not reflect how we operate here in Honolulu," he said.
"All of our employees are really excited about the future, and we look forward to vigorously competing in the marketplace for readers and advertisers," Fisch added.
Bagdikian said if the Star-Bulletin "gets the circulation, it'll get the advertising -- it's a twin battle, they go side by side."
"I think to make it work," he said, the Star-Bulletin "has to have, number one, good local news, because even though that's the most expensive kind, it is the primary attraction to people in a city."
Newspaper wars are fought in many trenches, on many fronts, but the overall winners are the readers, and the advertisers, Bagdikian said. "Having two voices in Honolulu when all of the conventional wisdom said it wouldn't happen is a significant and hopeful sign."
Bulletin sale archive
Comments from community leaders about the Star-Bulletin's continued existence: Community leaders
Star-Bulletin staff
react to Star-Bulletin’s
new beginning>> Jean King, former lieutenant governor and a member of Save Our Star-Bulletin: "We rejoice that we're going to be a two-newspaper town. We're in for exiting newspaper days ahead. The genuine competition should mean an ever-improving quality of news coverage for readers plus a good deal for advertisers."
>> Gov. Ben Cayetano: "I'm excited by the competition between our two major dailies. I don't think the Advertiser would invest $70 million in a new printing plant in Kapolei if they didn't see the Star-Bulletin as a serious competitor. And with three former New York Times journalists joining the Star-Bulletin, Hawaii's newspaper readers will see an increase in the quality of journalism."
>> Richard Port, former state Democratic Party chairman and member of Save Our Star-Bulletin: "There's a certain feeling of elation in being able to celebrate the continuation of the Honolulu Star-Bulletin. I think the mission of SOS appears to have been successful. And all of us hope that there will be a fair playing field for the two newspapers so we can continue, as Mr. Black has himself commented that this community wants and deserves two statewide daily newspapers.
"In getting signatures for petitions, even going out to Aloha Stadium to get signatures, what we found was that nobody refused to sign. I've never been involved in a petition effort like that. People were outraged at the shenanigans being pulled to close down one of Hawaii's daily newspapers. I'm very pleased.
"Now, this is only chapter six or seven -- it's not the end of the book yet. That's why we, SOS, have agreed to stay in existence."
>> Mayor Jeremy Harris: "The last year has been a tough one for all those associated with the Honolulu Star-Bulletin, but you have persevered and come out stronger as the new Star-Bulletin ... ready to compete on all levels. We look forward to the fresh, expanded version of the Honolulu Star-Bulletin and congratulate publisher David Black, Oahu Publications and the talented Bulletin staff on your debut, March 15."
>> David Black, owner of the Star-Bulletin: "I look forward to competing with Gannett. Our definition of winning is to have two long-term, quality daily newspapers in Honolulu."
Bulletin sale archive
A brief timeline
Key dates in the Star-Bulletin's brush with death:
>> Sept. 16, 1999: Liberty Newspapers Limited Partnership announces it will shut down the Star-Bulletin on Oct. 30 because of declining circulation, the sluggish Hawaii economy and better investment opportunities on the mainland. Star-Bulletin circulation is 67,124.
>> Oct. 13, 1999: District Judge Alan Kay issues a preliminary injunction in federal court ordering Gannett Co. and Liberty Newspapers from taking further steps to close the Star-Bulletin.
>> Oct. 20, 1999: Liberty and Gannett file a notice of appeal with the 9th U.S. Circuit Court of Appeals in San Francisco to overturn Kay's preliminary injunction. The newspaper owners argue that the First Amendment gives the paper the right to publish or not to publish.
>> Nov. 15, 1999: A three-judge panel with the 9th Circuit upholds Kay's preliminary injunction.
>> April 22, 2000: Liberty and Gannett agree to put the Star-Bulletin up for sale, under a court-supervised process approved by Judge Kay. The sale is supervised by Federal Magistrate Barry Kurren.
>> May 5, 2000: Kurren approves Liberty's hiring of brokers Dirks, Van Essen & Murray to market the Star-Bulletin.
>> Sept. 1, 2000: Three groups submit formal bids for the Star-Bulletin. They include Black Press Ltd., which operates 80 community newspapers in Western Canada and Washington state; Hadland Communications Inc., which owns five weekly publications in the Los Angeles area; and a local group that includes former Congressman Cecil Heftel, Kauai publishers Peter and Jane McClaran and Kauai investor Jeff Lindner.
>> Sept. 27, 2000: Magistrate Kurren approves Black Press Ltd. as the sole qualified bidder for the Star-Bulletin.
>> Nov. 9, 2000: The federal court approves Black Press Ltd.'s purchase of the Star-Bulletin. The order comes after Black Press reaches agreement with Liberty and Gannett over the terms of the Star-Bulletin's takeover.
>> Dec. 1, 2000: One day after completing his purchase of the Star-Bulletin, Black announces he is purchasing RFD Publications, which owns the 280,000-circulation MidWeek newspaper.
>> March 14, 2001: The last Star-Bulletin under Liberty -- and under the 38-year-old JOA -- rolls off the presses.
>> March 15, 2001: The Honolulu Star-Bulletin begins a new era at its Waterfront Plaza offices, launching its inaugural edition and a new morning issue under Oahu Publications, a new local company formed by owner David Black.
Bulletin sale archive
