The state Attorney General will be reviewing the sale of the Honolulu Advertiser to the owners of the Star-Bulletin, but it does not appear likely that the state will step in to keep Honolulu a two-newspaper town.

When Advertiser owner Gannett Co. tried to buy out and shut down the Star-Bulletin 10 years ago, then-Gov. Ben Cayetano, then-Attorney General Earl Anzai and a citizens group filed a federal lawsuit to stop the closure. Some of the people involved in that effort in 2000 are starting to organize and rally support to keep both newspapers operating.

But Attorney General Mark Bennett said yesterday the newspaper business has changed over the last decade.

“;The economics of the newspaper business and the definition of relevant markets is just not the same as it was 10 years ago,”; Bennett said. “;The antitrust laws don't require someone to operate a business that can't make money.”;

  Labor leaders discuss Honolulu Advertiser/Star-Bulletin

 

Labor leaders met today to discuss their strategy about Honolulu Advertiser and Star-Bulletin's future.

[ Watch ]

 

Star-Bulletin majority owner David Black announced plans Thursday afternoon to buy the Advertiser from Gannett. The Justice Department has asked Black to put the Star-Bulletin up for sale to see whether there is a qualified buyer who would keep it going as a daily newspaper. Black and media observers consider a sale unlikely.

If no buyer steps forward, Black's purchase of the Advertiser would likely be approved, and the two longtime rivals would merge into a newspaper with a new name.

Bennett said he has been talking with the U.S. Justice Department and will review the offering and financial records to make sure there is a good-faith search for a buyer.

Black said the Star-Bulletin has been losing money, especially with the recession and the loss of ad revenue to the Internet.

Having only one paper in Honolulu should make the merged business sustainable, he said.

“;We will have a very stable business going forward and a very good daily in Honolulu that will last for the foreseeable future,”; he said.

The Advertiser has about 600 employees, and Oahu Publications Inc., which publishes the Star-Bulletin and MidWeek, has about half that number. When and if the papers are merged, layoffs will occur, Black said. However, it is not clear how many people will lose their jobs.

Black said he will not be able to look at the Advertiser's financial records until after the sale closes. Until then they will not know how many people will be needed to run a merged newspaper.

“;The papers have to stand on their own two feet. We can't keep subsidizing them,”; he said.

Unions representing workers at both papers met yesterday with Gannett Co. representatives to discuss the sale.

“;We had a lot of questions for the Gannett folks, and they had just as few answers as they did yesterday,”; said Newspaper Guild Administrative Officer Wayne Cahill.

Cahill said he has yet to meet with Black or Star-Bulletin Publisher Dennis Francis.

Richard Port, a former state chairman of the Hawaii Democratic Party, said he hopes to bring public pressure to bear again to keep both papers going. “;I think Honolulu is too great a city to have one newspaper,”; he said. “;We don't need a monopoly.”;

In an e-mail, Cayetano said he stepped in 10 years ago because at that time the papers shared press and business operations under an anti-trust exemption that allowed the Joint Operating Agreement.

“;The difference today is that the two newspapers have operated independently ever since Mr. Black bought the Star-Bulletin and no longer operate using joint facilities and so the federal preservation law does not apply. And so there is no legal reason to stop the sale,”; Cayetano said. “;Obviously it would be better to have two newspapers independent of each other. But the bad economy is probably the reason for the sale.”;

Black said he and the other owners of the paper considered closing the Star-Bulletin last year. Instead, the board of Oahu Publications decided to make an offer to Virginia-based Gannett Co. to buy the Advertiser.

If the papers are merged, Honolulu will join a long list of U.S. cities—most recently Denver, Seattle and Tucson, Ariz.—that have lost one of two daily newspapers in recent years.

Black said he informed Gov. Linda Lingle about the purchase before it was announced and told her he planned to keep running the Advertiser's editorial voice, along with the Star-Bulletin's editorial section, so there would still be a diversity of opinions in the newspaper.

“;She said, 'You know that's not really an issue.' She said, 'Think of all the editorial voices around because of the Internet,'”; Black said. “;I wasn't really thinking of it that way, but that's right. The average citizen has a wealth of editorial voices if they want to pursue that.”;