Star-Bulletin publisher Dennis Francis immediately announced that under antitrust laws, the Star-Bulletin will be put up for sale. If no one buys the daily -- the smaller of the two papers -- it will be consolidated with the Advertiser, the Associated Press is reporting.
In a statement, Gannett noted that the sale is subject to regulatory approval, including from the U.S. Department of Justice, which could block or modify the deal on anti-trust grounds. "Because the Star Bulletin and The Honolulu Advertiser are daily newspaper competitors," the statement says, "OPI has discussed the purchase of the Advertiser with the Department of Justice and the Attorney General of Hawaii."Assuming Gannett and Oahu overcome those regulatory hurdles, Gannett said it expects the deal will close in the second quarter.
Recalling trouble in Tucson
Regulatory approval isn't guaranteed. The Obama Administration could press antitrust concerns, arguing that the deal would limit competition. The Justice Department, for example, could demand evidence that Gannett made a good faith effort to bring in an owner other than Oahu. Gannett ran into similar obstacles when it tried to close the Tucson Citizen last year. Ultimately, GCI was allowed to close the print edition, but it maintains a skeleton website.
Still, the Advertiser has been losing millions of dollars since at least October 2008, when a union representing employees there confirmed the daily was running in the red. The paper has suffered as Hawaii's tourism-based economy collapsed amid the housing bust, the credit crisis and, finally, the deep recession. Under these circumstances, Gannett could argue that it had just two choices: Sell to Oahu, or shutter the paper to avoid more losses.
The Advertiser is the biggest daily in Hawaii. Its daily circulation is 115,278; Sunday is 125,922.
GCI bought paper for $250 million
Gannett has a complicated history of newspaper ownership in Hawaii's state capital. It owned the Star-Bulletin from August 1971 until January 1993, when it stunned its employees by selling the afternoon paper for an undisclosed sum to Liberty Newspapers. Gannett then bought the competing Advertiser for $250 million.
The Advertiser and the Star-Bulletin were published under a joint operating agency (JOA), where business operations were combined, but the two newsrooms remained separate.The Star-Bulletin's new owner was controlled by Florida investor Rupert Phillips, according to the daily's history on its website. "The paper's life was nearly cut short in 1999, when Phillips reached a deal with Gannett to close the Star-Bulletin in exchange for a $26.5 million payment,'' the paper says. But the deal was scuttled amid community opposition and anti-trust lawsuits brought by federal and state authorities.
The paper was put up for sale. David Black, CEO of Black Press Ltd., a majority owner of Oahu Publications, bought the paper in March 2001. The JOA was dissolved, and Black has operated it as the scrappy upstart ever since.
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[Images: today's papers, Newseum]
Lucky for Honolulu!
ReplyDeleteThere goes my dream job. LOL!!
ReplyDeleteSounds like Honolulu will wind up with one paper -- a lot of people will lose their jobs -- but perhaps that one paper will be stronger and profitable. It will be rough for those employees, though. Good luck to everyone there.
ReplyDelete@ Anonnymouse i believe you , see the fact is that changes do occure the only chanllenges they will be facing is if those workers lost hope in life by relying on Honolulu for their only survivor, they shuould see it as an opportunity to rise to the next level of life. Good luck to them all.
ReplyDeleteThe Star-Bulletin has more Gannett advertising management experience than The Advertiser. They knew more about Gannett's inner workings and tendencies than The Advertiser's management team.
ReplyDeleteSmart move on Gannett's part. They need to do more of this. Sell tanking newspapers to highest bidders. Of course, they should have begun doing this five years ago at the top of the market, but we are talking about a bunch of dufuses running the place.
ReplyDeleteAnd if it goes thru, then Gannett has a nice chunk of Honolulu real estate to sell as well, since the PR says the building wasn't part of the sale.
ReplyDelete