Local investors buy into Bulletin
By Dan Nakaso
Advertiser Staff Writer
Five local business leaders are buying a minority stake in the Honolulu Star-Bulletin and MidWeek publications run by Canadian publisher David Black, Black announced yesterday.
Terms of the deal were not disclosed but the investment represents the first time the Star-Bulletin will have local shareholders since the 1970s.
The five business leaders are Colbert Matsumoto and Franklin M. Tokioka of Island Holdings Inc.; Duane K. Kurisu, partner in local real estate investment firm Kurisu & Fergus; and the families of Warren K.K. Luke and Jeffrey Watanabe.
As part of the deal, Kurisu, Luke, Watanabe and Matsumoto will become directors of Oahu Publications Inc. and MidWeek Printing Inc., owners of the Star-Bulletin and MidWeek. Black will retain majority control. Tokioka's interests will be represented on the board by Matsumoto.
A board comprising the new directors will replace the old one that consisted of only Black and his wife, Annabeth, Luke said. The Blacks matched the investments made by the new directors and will both join the new board, Black said.
Luke said his interest rests primarily in having local investors becoming shareholders in the Star-Bulletin, not in taking control of its operations.
"I know nothing about running a newspaper," Luke said. "I thought it was intriguing that ownership could come back to the Islands. That was my reason for getting involved. ... He also runs a family business. I run a family business. We like that setting."
Kurisu also is chairman of PacificBasin Communications LLC, a locally owned media company with publications including Hawaii Business and Honolulu magazine and radio stations including KCCN; Watanabe is a partner in the law firm of Watanabe, Ing & Kawashima, which represents the Star-Bulletin; Luke is president and chief executive of Hawaii National Bancshares; Matsumoto is president of Island Holdings, the parent company of Island Insurance Co.; Tokioka is chairman of Island Holdings.
For this year, the Star-Bulletin had budgeted to make $2 million, but Black said yesterday: "I don't know that we'll do that well. If we don't, that's OK with me. I'm not a short-term investor and neither are any of these folks. It's all long-term investment. These are patient people."
Employees not affected
Black said that no further capital investments are planned and the investment will not affect the publications' employees.
There have been no discussions to provide either cross-promotion or block advertising arrangements between the Star-Bulletin, MidWeek and PacificBasin's KCCN-AM radio station or its magazines, Black said.
But, he said, "Obviously those things will be on the table."
While declining to reveal the value of the investment, Black said it will retire all of the company's debt. The investment won't affect the bottom line, he said, but retiring the debt "gives you a better feeling going to bed at night."
Wayne Cahill, administrative officer for The Hawaii Newspaper Guild, which represents the Star-Bulletin's journalists, said erasing the debt means union officials will seek a meeting with Black representatives next week to restore the pay level that was reduced when employees took a 11.5 percent cut in November.
Union members agreed to the cuts "after reviewing the books, knowing that the company needed financial assistance," Cahill said. "Certainly if they're going to retire all of the debt, they can restore all of the wages."
Gannett Co. Inc. owned the Star-Bulletin until 1993, when it bought The Honolulu Advertiser and sold the Star-Bulletin to Liberty Newspapers. Black took over the Star-Bulletin last year after buying it from Liberty Newspapers LP, which announced in September 1999 that it planned to close the paper because of its declining circulation.
Bought RFD in 2000
In 2000, Black purchased RFD Publications, owner of MidWeek, the state's largest weekly newspaper.
The Star-Bulletin, like newspapers in general, has suffered since Sept. 11, Black said.
"Certainly the bottom line isn't what we expected," he said. "...We could certainly use more advertising."
About a month ago, Black said he asked Star-Bulletin President Don Kendall how the operations were going and was told they would probably lose about $100,000 that month. They would probably also lose another $100,000 the following month, Kendall told Black.
Black said he wasn't worried because he is invested in the Star-Bulletin for the long haul.
According to the most recent official circulation figures released last October by the Audit Bureau of Circulations, the Star-Bulletin reported its average Monday-Friday circulation at 64,305 for the six months ended Sept. 30. It reported its Saturday circulation at 62,380. The Advertiser reported an average daily Monday-Saturday circulation of 152,098.
For its Sunday edition, the Star-Bulletin reported average circulation at 64,344. The Advertiser reported average Sunday circulation of 173,336.
Reach Dan Nakaso at dnakaso@honoluluadvertiser.com or 525-8085.
