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.
Resources
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.
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With more and more people turning to online news sources, what can the Star-Advertiser do to increase or at least try to maintain circulation?
One possible path toward financial reward would be to deliberately tell the news, or, perhaps, fail to tell the news, in a way that promotes and protects the means to achieving population growth on Oahu so as to increase the size of the pool of potential new readers.
But would the Star-Advertiser do this? Perhaps not. After all . . . its only money.
I can tell you how the paper is trying to pump up the circulation numbers. We had originally ordered the weekend delivery package – Friday, Saturday, Sunday. Somewhere along the way they added to that, I think, Monday and Wednesday, at no extra charge. Then a week or so ago we got a letter saying that they were “upgrading” us to seven days a week, at no extra charge. So, it looks like they are willing to basically give away the paper to prop up circulation numbers in an apparent attempt to retain advertising revenues.
I can’t see this as a viable long term business model. It would seem, at best, a holding action to postpone the inevitable demise.
Just as another path to continued financial reward, for those behind the Freeway Lobby, could be to mount a cynical and tiresome disinformation campaign and concoct endless conspiracy theories, under the guise of reasonable community inquiry and debate, to foment fear and obstruct competition from modern public tranportation alternatives that are long overdue.
Would freeway huggers really do this? Without a doubt.
“Just as another path to continued financial reward, for those behind the Freeway Lobby, could be to mount a cynical and tiresome disinformation campaign and concoct endless conspiracy theories . . .”
If your assistance is available, I’d like to rule something out.
For the sake of argument, let us say that you are correct and there is a disinformation campaign against this rail project being orchestrated by the “freeway huggers.”
Are you of the belief that protest of government wrongdoing and suspicion of news media complicity can automatically be rendered invalid as a consequence of the conduct of third parties such as oil companies, auto manufacturers, tour bus operators and taxi drivers? Is it acceptable to you for government to lie to the people provided someone opposed to government’s stance has also lied to the people? Does it become ethical for journalists to overlook the lies of government provided someone opposed to government’s stance has lied to the public as well?
Are the people caught in the middle who have lied to no one to be left with no recourse?
For the record, I am open to the idea of an elevated or partially elevated rail system that would travel through the urban core between the airport and UH Manoa, which is also where I feel future growth should occur.
Even if we build the rail that is currently planned, traffic between country and town is expected to increase as thousands of new homes are built. Why increase the number of cars traveling through congested traffic between West and Central Oahu and town if that entire leg of travel can be skipped by thousands of people by allowing them to live in town where their jobs are?
Perhaps more people would be willing to put up with the discomforts attendant to public transportation if the trips were shorter in-town to in-town trips as opposed to much longer journeys in from West and Central Oahu.
Perhaps we should keep the country, country by keeping the city in the city where live-work-play is more assured of success.
Interesting. I was wondering why I was offered 2 years daily delivery for $30.00. The paper is tilted so far left I wrote it off, but for less than a nickel a day I get crossword, sports news and comics. It cover/prints very little national political/controversial news and of course the dreaded “under review censor” is there to assure nothing negative or “boat rocking” is printed about “The Amateur” and other SA darlings or favorite topics. By contrast, I have never had a comment on a Civil Beat article deleted, only perhaps challenged or explained by the staff or other commenters, which adds to the discussion. Not so with the SA. Not allowing the other side just turns off a segment of readers.
Two notes:
** The money you pay for home delivery does NOT essentially pay for the paper, it pays for the cost of delivery. With delivery people on salary instead of being private contractors, it’s a wash.
*** Gannett failed in Honolulu because of sheer incompetance. They thought they were dealing with a backwater Third World country. (How dumb were they? The URL HonoluluAdvertiser.com was registered by ME and it took Gannett three years to figure that out. They spent tens of thousands of dollars assembling a legal challenge before contact lay me to seize the URL, and I confounded them by immediately selling it for a $25 profit, cash right now, there on the table, but also refusing their demand for no disclosure of terms. Obviously!)
Important question:
How much will YOU PAY to advertise in a newspaper that is handed out for FREE to ANYONE?
Answer:
Look at the Honolulu Weekly.
The case is already rested. Some people will refuse that to admit until their paper is RIP.
In fact, I will bet $1000 that once the SA ceases publication, someone will swear up and down that the SA will publish again, and nothing has changed. Flat Earth Society still exists.
I’m intervening here to stop these comments from deteriorating into personal attacks. I’ve removed the latest in this train of comments. Back to the high road, please.
Uh Hey T, there ya go again. What a hilarious and sorry but dumb question. Ever heard of MidWeek??? How much do they charge? How many INCHES of advertising is in it each week. Keep the barbs coming, you’re funny at least. Oh and since you are so bold at predicting the SA’s demise, just what date and year do you see that happening?? I noticed the SA is HIRING new positions in the help wanted section.
Black Kettle,
Do you actually see the SA still publishing as a daily newspaper 10 years from now?
so that’s your bet??? 10 years?? no comment on MidWeek readers not paying a red cent yet they are pretty successful?? Revenue from subscriptions isn’t now and has never been a big part of newspapers financial success. it’s reach to readers my friend, print/digital/whatever. reach. remember that. lesson over.
keep reaching. the lesson is continuing, but the newspaper publishing game is ending:
The American Society of News Editors released its annual newsroom census today (06/2013) and found an unexpected acceleration of job losses. Roughly 2,600 full-time professional editorial jobs at newspapers disappeared in 2012, a 6.4 percent decline compared to 2011?s total, leaving industry news employment at 38,000.
That brings the number of reporters, editors and other journalists down almost one-third from a peak of 56,400 in 2000 and down 30.9 percent since 2006. The greatest losses — 13,500 in all — came in the recession years of 2007-2009. But a modest stabilization in 2010 and 2011, when losses slowed to 900 jobs over the two years, now appears to be over.
The census began in 1978 to track progress in making newspaper staff and leadership more diverse. As in recent years, the percentage of minority news staffers held steady at 12.4 percent — essentially showing minorities losing newspaper jobs at the same rate as others.
The census covered calendar year 2012, but the cuts have clearly continued this year. Recently, the Chicago Sun Times dismissed its entire 28-person photo staff. The Cleveland Plain Dealer and the Oregonian are cutting print newsroom staff, as parent Advance Publications did at The Times-Picayune in New Orleans last year.
…
Historically Gannett has been a very strong supporter of ASNE’s diversity initiative. But besides the absence of USA Today, several other large Gannett metros — The Arizona Republic, Indianapolis Star and Cincinnati Enquirer — didn’t report results.
Other prominent papers not reporting include Poynter’s Tampa Bay Times, The Miami Herald, The Times-Picayune, the New York Post and The Richmond Times-Dispatch.
With 978 of 1,382 dailies responding, however, the basic finding of a bigger job decline seems solid.
So again: Do you actually see the SA still publishing as a daily newspaper 10 years from now? Try to answer the question.
Yes., I do. Even 30 years from now. No question. Things change and evolve I’m certain the SA and many papers like it will be different than perhaps it is today but what business won’t be?? Will malls still be around I’m 10 tears?? Can’t everyone buy everything that’s in the store on-line?? [comment slightly edited.]