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The Honolulu Advertiser
Posted on: Tuesday, April 20, 2010

Inouye urges review of newspaper sales

BY Rick Daysog
Advertiser Staff Writer

U.S. Sen. Daniel K. Inouye plans to send a letter to the U.S. Justice Department, urging a careful review of the sale of the Honolulu Advertiser and the Honolulu Star-Bulletin.

The letter comes about a week before Star-Bulletin owner David Black is expected to complete his purchase of the larger Honolulu Advertiser on Sunday. Black is required to put the Star-Bulletin up for sale to satisfy the Justice Department's antitrust requirements.

The senator wants to ensure that the newspaper deals are conducted in accordance with federal antitrust laws, said Peter Boylan, spokesman for Inouye.

"The sale of these properties could leave hundreds of workers and their families without a job and every effort needs to be made to ensure the transaction is above board," Boylan said in an e-mail yesterday.

Star-Bulletin Publisher Dennis Francis had no comment on Inouye's letter.

In the past, Star-Bulletin officials have said the purchase of the Advertiser and sale of the Star-Bulletin are being conducted according to guidelines established with the Justice Department .

Inouye agreed to contact Justice officials after meeting recently with Wayne Cahill, administrative officer of the Hawaii Newspaper Guild, and Suzanne Roig, the Guild's president.

Cahill said the union is worried about the antitrust implications of Black's purchase of the 115,000-circulation Advertiser and its nondaily publications.

When combined with his ownership of MidWeek which reaches more than 270,000 readers a week, Black will have a monopoly in the local print advertising business, Cahill said.

The Guild also is concerned about the short amount of time in which Black is offering to sell the Star-Bulletin, he said.

Under the sales procedure approved by the Justice Department, Black agreed to list the newspaper for sale for 14 days.

The process provides bidders another 21 days to provide an initial nonbinding bid, conduct a site visit to review the Star-Bulletin's printing facilities and offer a final bid for the Star-Bulletin.

"You can't even sell a car in two weeks," said Cahill. "How can you sell a newspaper in two weeks?"

Black has said that he doesn't expect to sell the Star-Bulletin due to the newspaper's losses, which, he said, averaged about $13.3 million a year.

If he is unable to sell the Star-Bulletin, Black said he will consolidate the two papers, in a move that will likely result in the loss of at least 150 jobs at the Star-Bulletin.

The number of jobs that may be lost at the Advertiser has not been disclosed but industry experts said the Advertiser's job losses could exceed those at the Star-Bulletin.

Two potential buyers of the Star-Bulletin Texas private equity investor Brian Ferguson and state Sen. Sam Slom and Internet publisher Malia Zimmerman have emerged in recent weeks.

The two groups yesterday submitted final offers for the Star-Bulletin, which will be reviewed over the next several days by Black, the Justice Department and the state attorney general's office.

Zimmerman said yesterday that she has asked Black's company, Oahu Publications Inc., for a one-week extension, saying they have not been given enough information about the Star-Bulletin's assets.

"We haven't been given a complete list of assets being sold, such as the the newspaper's vehicles, computers and cameras," she said.

"And we haven't been allowed to bring a consultant for a second site visit to assess the quality and value of the Star-Bulletin's printing press."