Posted on: Thursday, March 15, 2001
Star-Bulletin's sale marks end of joint operation
By Frank Cho
Advertiser Staff Writer
After months of wrangling and a messy court fight, the sale of the afternoon Honolulu Star-Bulletin was completed yesterday, ending a joint operating agreement that had linked it with the morning Honolulu Advertiser for 39 years.
The sale to Canadian newspaper publisher David Black ends nearly 18 months of litigation and dissolves the Hawai'i Newspaper Agency, which had handled the advertising, printing and distribution operations for the two papers since 1962. The agency's roughly 700 employees will transfer to The Advertiser's payroll today.
"All of us are happy to have this chapter closed," said Mike Fisch, publisher of The Advertiser.
With plans by the afternoon Star-Bulletin to publish a morning edition, Honolulu will have two morning newspapers for the first time since The Hawaii Herald competed in the 1950s.
Black arranged to purchase the Star-Bulletin last November for $10,000 from Liberty Newspapers Ltd., which announced in September 1999 that it planned to close the 117-year-old paper because of declining circulation.
But lawsuits filed by the state attorney general's office and community coalition Save Our Star-Bulletin said the deal, which also ended the joint operating agreement, violated federal antitrust laws. The suits temporarily stopped the closure and forced Liberty to seek a buyer.
A federal judge ruled at the time that the agreement by Gannett Pacific, The Advertiser's parent company, to pay Liberty Newspapers $26.5 million to end the joint operating agreement was tantamount to it buying out the competition. Gannett has denied the charge. A trial on the charge had been scheduled for later this year and now — with the completion of the sale of the Bulletin to Black yesterday — will be canceled.
"We are very happy with the outcome," said former Lt. Gov. Jean King, a member of Save Our Star-Bulletin. King said the group plans to continue monitoring the situation between The Advertiser and the Star-Bulletin and may take legal action again if it feels one side is competing unfairly.
U.S. District Judge Alan Kay yesterday signed the order dismissing the lawsuits.
"Absolutely, this ends all pending litigation related to this matter," Lisa Munger, attorney for Gannett Pacific, said yesterday.
Gannett will pay Liberty Newspapers about $22.4 million for the value of the remainder of the joint operating agreement, which was to run through 2013.
While attorneys signed the final sale documents in a downtown conference room yesterday, dozens of Star-Bulletin workers, led by a pipe and drum band, paraded down South Street to their new offices in Restaurant Row.
"It was a very emotional day for us," Black said.
The Star-Bulletin had been published by Liberty Newspapers since 1993. Starting today, it begins publishing a morning edition, as well as an afternoon edition, from its new offices. Frank Cho can be reached by phone at 525-8088, or by e-mail at fcho@honoluluadvertiser.com.
