A reader contacted me yesterday with questions about how the Star-Bulletin went from being targeted for closure to not only surviving but eventually buying Gannett’s much larger Honolulu Advertiser. Fair question. I’ll try for a relatively brief overview (I tried, but it isn’t as brief as I hoped).
First, the background.
In those old days of the 1960s and 1970s, afternoon newspapers were dominant. People wanted to get home and read what had made news during the day. It was no different in Honolulu, where the Star-Bulletin was financially healthy while the Advertiser was on the brink of financial collapse. At that time, if I recall correctly, both newspapers were still locally owned.
In the early 1960s, the two Honolulu dailies entered into a joint operating agreement. They created the Honolulu Newspaper Agency, which took over production, delivery, advertising, and business operations for both newspapers, which retained their editorial independence. So they competed for news, but didn’t compete for business, and they shared in the profits of their joint business.
The federal government finally recognized such joint agreements and provided a limited exemption from anti-trust laws via the Newspaper Preservation Act of 1970, which allowed these competing newspapers to survive in a number of cities for many years.
Then in 1972, the Star-Bulletin was purchased by Gannett, which was gobbling up newspapers in small and mid-size markets on its way to becoming the country’s largest newspaper chain.
It introduced a brand of corporate journalism complete with rules that had to be followed by reporters in all of its newspapers. The company’s approach was criticized for dumbing down the news, while its business approach was seen as using aggressive tactics to crush potential competitors for advertising dollars.
During the early Gannett years, Honolulu’s JOA raked in the profits, with the two partners reportedly splitting up to $50 million in profits during good years.
But all that started to change as social and demographic change kicked in. Television increasingly displaced newspapers as many people’s primary source of daily news, and as the pace of news increased with electronic forms of delivery, that coveted evening time slot no longer had the same draw. The result was a steep decline in circulation at newspapers delivered in the afternoon, which largely packaged news people had already heard of elsewhere. Even the Joint Operating Agreements were not enough to keep the p.m. newspapers afloat, and across the country JOA’s were dissolved and the weaker newspapers allowed to fail.
In 1992, Gannett abruptly bought out Honolulu’s morning newspaper, the Honolulu Advertiser, which by that time had a bigger circulation, more advertising, and brighter prospects than its smaller afternoon rival. At the same time, the Star-Bulletin was sold to Rupert Phillips, a small publisher who had done business with Gannett in other places. The newspapers continued to operate within the joint operating agreement, although its terms were rewritten to grab all operating control and the bulk of the profits for Gannett.
Then technological change began taking its toll. The emergence of the internet, and internet-based services, rapidly eroded the main sources of newspaper revenues as real estate ads, automobile ads, and job ads all moved online. Grim times in the news business.
Then Gannett made its move.
In September 1999, Gannett announced it planned to pay off the Star-Bulletin’s owner, dissolve the JOA, and close the S-B.
But Gannett’s plan to close the Star-Bulletin failed because of the intervention of the Newspaper Guild, the union which represented reporters at both Honolulu newspapers and at newspapers across the county. Guild attorneys and organizers had been trying to find ways to preserve newspaper jobs, keep struggling newspapers alive, and preventing owners from pulling the plug on JOAs.
In Honolulu, their strategy came together. Within days of the announcement of the planned closure, a community coalition, backed by the Guild and other unions representing newspaper employees, was formed to keep the newspaper alive. With backing from the Newspaper Guild and the ILWU, “Save Our Star-Bulletin” was able to draw considerable political support. The result was a pair of lawsuits, one brought by SOS and the other by the State of Hawaii, both seeking to block Gannett from proceeding with its planned shutdown of the Star-Bulletin.
In October 1999, Federal Judge Alan Kay ruled that the lawsuits were likely to be successful and issued a preliminary injunction blocking the plan from moving forward. Despite appeals by Gannett to the 9th Circuit, the injunction was upheld.
It was quite an extraordinary court ruling, perhaps the only time in U.S. history that a newspaper had been ordered to keep publishing against its owners’ wishes. Unfortunately, I haven’t been able to find a Kay’s ruling online, and links to the ruling in the Star-Bulletin archive no longer work.
The lawsuits were eventually settled when Gannett agreed to make a good faith effort to sell the Star-Bulletin before moving forward to shut it down. The sale seemed like a long shot. The Star-Bulletin had no printing press, and would have no newsroom. It had employees represented by the Newspaper Guild, but no way to produce a newspaper. Things looked grim.
Behind the scenes, though, Canadian publisher David Black was quietly putting together another deal that would eventually breath new life into the Star-Bulletin. He secretly negotiated the purchase of MidWeek, which owned its own press in Kaneohe capable of printing the Star-Bulletin.
It wasn’t until Black sealed a deal to buy the Star-Bulletin that he revealed his parallel deal for MidWeek.
So in March 2001, the Star-Bulletin began publishing under new ownership without missing a day.
Black ran the Star-Bulletin on a lean budget, and it reportedly kept losing money as the years went by. Gannett was unable to put its competitor out of business, not for lack of trying, of course.
Both companies were hard hit by the 2008 financial crisis, and many expected the Black’s Star-Bulletin to be the first to fold.
But in 2010, with Gannett facing losses across its chain of newspapers and its stock down more than 90 percent from its recent peaks, the company agreed to sell the Honolulu Advertiser to Black, who then merged it with the Star-Bulletin. The merged newspapers began publishing as the Honolulu Star-Advertiser, bringing us to where we are today.
The Star-Bulletin archive contains most of the articles chronicling events between the September 1999 announcement that the S-B would close, and its sale to David Black in 2001.
For some fine reporting on the politics of this period, see Burl Burlingame’s blog, The Honolulu Newspaper War, still available online and updated through 2010.
And if you’re interested in what it felt like in the S-B newsroom as these events played out, you can read through my “Newsroom Diary,” which began as an informal attempt to describe what we thought would be the last few weeks of this daily newspaper. The fight to save the Star-Bulletin, and my description of events from the inside, ended up lasting another 18 months, and the newsroom diary grew into this blog, iLind.net.
That’s probably more than most of you wanted to know. But I hope I answered that reader’s questions.