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The Honolulu Advertiser
Posted on: Friday, February 26, 2010

Black undeterred by challenging Isle market

 •  Bulletin owner buys Advertiser


By Rick Daysog
Advertiser Staff Writer

Hawaii news photo - The Honolulu Advertiser

David Black bought the Honolulu Star-Bulletin in 2001, but was unable to achieve profitability as the Internet took off.

ADVERTISER LIBRARY PHOTO | Nov. 6, 2000

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Hawaii news photo - The Honolulu Advertiser

David Black

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When David Black emerged as a top bidder for the Honolulu Star-Bulletin nine years ago, he ran into obstacles to his attempted purchase of the state's No. 2 newspaper.

The afternoon Star-Bulletin's readership had been in decline, the newspaper was being offered without a printing press and Gannett Co., the Advertiser's owner, was making it difficult for the British Columbia-based publisher to complete the purchase.

"He's had to overcome a lot of adversity," said Colbert Matsumoto, chairman of Island Insurance Co. and a director of the Star-Bulletin's parent Oahu Publications Inc. "I think he definitely has been very committed to this community."

Yesterday, Black stunned the local business world when he announced that he was purchasing the rival Advertiser, its Web site and its nondaily publications and would put the Star-Bulletin up for sale.

The deal, which requires approval from the U.S. Justice Department, will give Black control over the largest daily newspaper in Hawai'i and the largest news Web site in the state to go along with his ownership of MidWeek Inc., the state's largest weekly newspaper.

Gerald Kato, a University of Hawai'i-Mānoa journalism professor, said Black's purchase of The Advertiser is a tribute to his persistence.

Black took over the Star-Bulletin on March 15, 2001, just six months before the Sept. 11 terrorist attack sent Hawai'i's tourism economy and the local advertising market plummeting.

SHIFT TO DAILIES

Over the years, profitability remained elusive for the Star-Bulletin due in part to increased use of the Internet.

Kato said that Black's purchase of MidWeek, also in 2001, helped him keep the Star-Bulletin. The profitable MidWeek kept the Star-Bulletin afloat and provided a printing press for the daily newspaper.

"I give the guy high marks for tenacity," Kato said.

"I've always thought that any bottom line-oriented businessman would have pulled out of this market long ago."

Black's purchase of the Star-Bulletin proved to be a stepping stone into his expansion in the daily newspaper business.

Prior to his purchase of the Star-Bulletin, Black Press Ltd. owned about 80 newspapers in Canada and Washington state. But only one of them the 19,000-subscriber Red Deer Advocate in Western Canada was a daily newspaper.

In 2006, Black Press acquired the Akron Beacon Journal from McClatchy Co. for $165 million.

Last year, he joined a group led by Beverly Hills-based Platinum Equity in purchasing the San Diego Union-Tribune newspaper.

John Flanagan, former editor and publisher of the Star-Bulletin, said Black's business model centers on clusters of weekly newspapers that share printing and distribution functions.

The purchase of The Advertiser follows a similar model, he said. The deal will allow Black Press to consolidate printing and distribution of the Advertiser and MidWeek at The Advertiser's Kapolei plant, he said.

Black Press has said that it plans to offer its Kāne'ohe printing operations as part of its planned sale of the Star-Bulletin.