April 1, Saturday

Employee buyout gets court approval!

In an unexpected move, attorneys representing Gannett and Liberty Newspapers have reportedly agreed to a buyout of the Star-Bulletin and its assets by an employee group. The existence of the surprise agreement was disclosed in confidential court documents filed in U.S. District Court late Friday, but obtained by the Newsroom Diary on April 1. The deal comes after more than a month of secret settlement negotiations ordered by a federal magistrate that have been cloaked by a strict gag rule.

Sources close to the negotiations described the purchase price as "nominal", and said the deal includes a three year subsidy with an estimated value of $40 million, which would be used to pay costs of publication of the Star-Bulletin during an interim period extending several years. The Star-Bulletin, now published as part of a Joint Operating Agreement with the Gannett-owned Honolulu Advertiser, will add an early morning edition once it begins publishing independently on August 1, as well as an expanded Internet edition.

The independent Star-Bulletin will initially lease office space and printing from Gannett's Hawaii Newspaper Agency at a reduced rate, under the terms of the agreement. Within two years, however, the paper would move to new facilities and contract for printing from a third party, sources said.

The employee group expects to reverse the newspaper's circulation decline of recent years, which has been attributed in large part to Gannett efforts to choke off subscriptions at its afternoon rival.

The Advertiser has reportedly agreed to hire any Star-Bulletin staffers who express a desire to move across the hall, but when someone asked during an impromptu newsroom gathering how many Star-Bulletin people wanted to work at the Advertiser, no hands were raised, sources said.

Representatives for the two papers declined to comment on the reported settlement, which would result in dismissal of two antitrust lawsuits now pending in federal court.

It could happen!

 

April 2, Sunday

Apparently not everyone fully appreciated being sucked in by yesterday's April Fools headline and entry. I've been called a few names overnight, but I'll survive.

And I also had my own moment of that old free-fall feeling when I found this message waiting for me yesterday afternoon from Star-Bulletin web master Blaine Fergerstrom:

Congratulations on the story, Ian.

They were able to salvage at least part of the home delivery press run with an extra edition. I attached a copy of the front page.

We're working on updating the Web site. Nobody knew!

Not to worry, they gave you the byline.

TV guys should have heavy coverage by the 6 o'clock news.

CONGRATULATIONS TO ALL OF US!!!!

See you Monday.

Blaine

 

There was just a moment where I started to leap towards the front door to see whether my paper and its replated headline had arrived, but the impulse was quickly replaced by a pretty good laugh.

But after those moments of levity, we're back to the grind, watching for the outcome in San Francisco, speculating whether the Dept. of Justice is playing an active behind the scenes role here, and wondering why there are no signs of discovery proceedings in the antitrust litigation here.

 

April 3, Monday

Another negotiation session is scheduled for today between Gannett and the unions representing employees at the Star-Bulletin, Honolulu Advertiser, and the Hawaii Newspaper Agency.

Just in case anyone has been confused by Gannett's claims of financial suffering which have been heard repeatedly, first in the antitrust cases now pending in federal court, and now in the contract talks, the company's latest annual report filed with the the SEC last month have a couple of interesting items.

Gannett reported record operating earnings for 1999, with newspapers contributing 86% of the company's revenues and 83% of its operating income. The newspaper division also had record earnings of $1.3 Billion during the year, up 16%. Newspaper earnings were aided by lower newsprint prices which, on average, were 12% lower than in 1998, the company reported.

Gannett execs probably don't realize that company directors (we're talking directors, not full time officers or employees) are paid more than most of the reporters at its newspapers across the country. According to the proxy statement filed along with the annual report, directors (including Hawaii's Stuart Ho, who has been a director since 1984) are paid a $45,000 annual fee, along with $1,500 for each board meeting, and $1,000 for each committee meeting attended. Board committee chairs also receive an additional $5,000 payment.

Two committees met 5 times each during the year, one committee met three times, and the final committee met just once. Get out your calculators.

In addition, Stuart Ho and several other directors are covered by a special retirement plan which will pay them 100% of their highest annual compensation, with full vesting at 100% after just 10 years of service. Not a bad deal for part-time work.

 

April 4, Tuesday

[An unusual early schedule, including a 6 a.m. run to the airport, means I won't be able to add today's entry this morning. Please check back later.]

Later--The most frequent question heard in the newsroom today was still: "What do you think about San Francisco?" We're like the last car in the roller coaster, continually snapped this way or that by the momentum of the cars ahead.

After checking out the Justice Department's press release of March 30 in which they announced that antitrust concerns with Hearst's Chronicle-Examiner deal had been "resolved", I noticed documents from another newspaper case with some relevance to us.

Community Publishers, Inc. v. Donrey Corp.,892 F. Supp. 1146 (W.D. Ark. 1995), later upheld by the 8th Circuit Court of Appeals, is an antitrust suit prompted by the purchase of the Northeast Arkansas Times newspaper by NAT, a partnership 95% owned by the Stephens family. The Justice Department opposed the deal because the Stephens family group also owns Donrey Corp., which owned another newspaper in the same market.

Stephens, of course, controls a majority interest in the Liberty Newspaper Limited Partnership, although a corporation controlled by Rupert Phillips is the General Partner. And, through its ownership of Donrey, Stephens also owns both newspapers on the island of Hawaii, the Hawaii Tribune Herald and West Hawaii Today.

Plaintiffs won the Arkansas case and forced a recision of the already completed sale to the Stephens-controlled partnership. The various legal documents are tough to wade through, but they contain substantial discussion of the manner in which the Stephen's family conducts its businesses, including what the District Court described as "the noncompetitive manner in which the Stephens family does business together".

I gave myself a headache first trying to skim this stuff, and then trying to painfully wade through it section by section. But I can't shake the feeling that there are clues here to how Gannett-Phillips-Stephens managed the 1993 Star-Bulletin deal.

 

April 5, Wednesday

Does anyone know where we can find a video or DVD of Deadline U.S.A., the 1952 film described as a fictionalized account of the final days of Joseph Pulitzer's "The New York World". As he listens to threats against his life but proceeds with orders to run the presses with their final expose, Bogart, as the paper's editor, drops one of those classic lines: "It's not just me anymore. You'd have to stop every newspaper in the country and you're not big enough for that job. People like you have tried it before. With bullets, prison, censorship. But as long as even one newspaper will print the truth, you're finished." Just what the doctor ordered for stressed-out denizens of the Star-Bulletin newsroom. The web site, Journalism Movies, puts this at the top of its list. So where do we get a copy?? If you can help, send a message to me at ian@ilind.net.

The San Francisco Bay Guardian has a good summary of issues in the San Francisco newspaper battle in a current story. I'm not sure how long this link will remain good, so I'll try to remember to check it later.

 

April 6, Thursday

Yesterday was uneventful. Newsroom was calm. Unfilled positions starting to have ripple effects as we try to cover the essentials. There's a job notice up on the bulletin board with openings for reporters, editors, etc. Not sure if there are many inquiries coming in.

Under it all, though, Star-Bulletin folks are coping remarkably well, despite a startling lack of communication. Even after almost 7 months, we've not had a newsroom staff meeting to discuss these events, deal with staff questions and concerns, or even simply motivate the troops under these difficult times. Wait--I had better qualify that. Staff were called together when an announcement was made about how the city desk would be organized following the departure of Dan Woods. Apart from that, however, only brief comments have been made when staff gathered for some other reason. I have a hard time understanding why our management hasn't made more of a broad effort to bring the staff together, instead of the one-on-one approach of dealing with specific questions as they arise.

The prospect of a full-blown trial within a month to settle the fate of the SF Examiner certainly has drawn a lot of interest. And it is only 5 weeks before the scheduled hearing here on a motion by Gannett to dismiss the antitrust suits and let them proceed. They've already said in court documents that another attempt to close the Star-Bulletin will be necessary.

I wonder whether others will want the next five weeks to drag on endlessly, or whiz by quickly. That's probably the kind of personal question that would be good on a psychological test. I'm sure we all differ, which means folks are reacting differently to the realities of being in legal limbo where things remain unsettled for an indefinite period of time.

 

April 7, Friday

Rumor mill says there was an early morning conference call yesterday between Save Our Star-Bulletin leaders and their antitrust lawyers at the D.C.-based Baker & Miller. No hints yet as to the substance of the call.

A little here, a little more there, and pretty soon you're talking about real money. Gannett executives have been lining up since the beginning of the year to cash out their stock options for little bits of change. Their accumulated take so far is about enough to run the Star-Bulletin for a year. Check it out.

It is also interesting to note that Frank Vega, one of the key figures in the Detroit newspaper wars, was reported to be in the islands several weeks ago. No word on whether he was vacationing, or stopping by to put his spin on Gannett's negotiating strategy in the current contract talks. Here's one summary of the roles played by Vega, along with Gannett lead negotiator John Jaske, in the events leading to the Detroit strike.

 

April 8, Saturday

Another gray, drizzly day here in Kaaawa on the windward coast of the island of Oahu. A day that leaves the cats crashed and the people restless. Yesterday's zinger was the press release announcing Donrey Media's acquisition of www.Hawaii.com, which they plan to develop "to serve as an in-depth community site for current and former Hawaii residents."

Donrey, which was mentioned here earlier in the week, owns the Hawaii Tribune Herald and West Hawaii Today newspapers, where it took an aggressively anti-labor posture during the last round of contract negotiations, Cutbacks, harassment of union leaders, and other nasty tactics were the order to the day, under the direction of Alan Marx, the same attorney now representing Liberty Newspapers Ltd. Partnership in the attempt to shut down the Star-Bulletin.

Donrey is owned by the Stephens family of Arkansas/Clinton fame, which also owns a big chunk of Liberty Newspapers and the Star-Bulletin, so we're sort of country cousins in the media world.

Donrey plans to model Hawaii.com after its Lasvegas.com site, the company brags that it now controls "the premiere, intuitive Internet domain names in two of the world's major tourism markets."

The Hawaii.com move might not have anything at all to do with us. On the other hand, I hate coincidences, and Donrey's increased activity in the midst of our legal battle sets off my natural alarms. Is this, for example, a move to preempt and upstage the possible future spinoff of an independent Starbulletin.com? Or is it simply an opportunistic move that further legitimates the economic viability of the highly successful Star-Bulletin site? Perhaps when the sun comes out I'll be better able to ponder the possibilities.

Newsroom musings on Friday wandered into speculation about the viability of the current September trial date for the antitrust challenge to the Star-Bulletin. At this point, with no discovery visibly underway and a looming July cutoff, can anyone be serious about a precedent-setting trial? It doesn't look that way at this time.

What does this mean? Are the parties assuming (a) a settlement is near, (b) the trial will be postponed, or (c) the case will be dismissed next month or dropped if the state backs out? It was pointed out that the state's antitrust suit against the gasoline companies was bumped back 7-months when it fell behind schedule. The possibility of an indeterminate stay in this legal limbo left us feeling feeling wrung out and vulnerable.

 

April 9, Sunday

In case you missed it, there was a "soft" launch this week of Star-Bulletin video. No fanfare, just a little video essay by Dean Sensui. But you can be sure there's more to come.

And you probably also missed the original movie poster for Deadline U.S.A., the newspaper film mentioned on Wednesday, which was listed for auction on ebay. The auction ended yesterday without a bidder willing to put up the $250 initial asking price.

 

April 10, Monday

Time is passing quickly, or so it seems. Saturday will mark 7 full months since the September 16, 1999 announcement by Rupert Phillips that the Star-Bulletin was to be closed. As this drags on, I wonder if Rupert will show his face here again? That would certainly make for an interesting scene.

Speaking of Rupert, it's interesting to check his Journal Newspapers , which now claim a greater online presence. Just where does the Star-Bulletin fit in his little empire?

The Hawaii Newspaper Guild has a new site with links to the current contracts for our JOA as well as the other Guild papers in the state, including the Donrey papers on the island of Hawaii. They make interesting browsing.

 

April 11, Tuesday

I'm trying to find a theory that fits these data: There are two pending antitrust lawsuits to block the closure of the Star-Bulletin which have been consolidated for trial. One was filed by the State of Hawaii, the second by a group calling itself "Save Our Star-Bulletin", backed by the Newspaper Guild. Defendants in both cases are Gannett and Liberty Newspapers Limited Partnership, which owns the Star-Bulletin. The cases, now consolidated, are scheduled for a September trial. Court mandated confidential settlement talks started earlier this year and may still be underway. A motion to dismiss the suits is set for a May 15 hearing.

Here's the odd part. There is a protective order shielding confidential business information released in discovery from public disclosure without court approval, but there is no discovery-related activity discernible in the court file. Several checks over the past two months confirmed the absence of discovery.

When an earlier motion to dismiss was filed, SOS attorney Jim Bickerton said he would need to take several depositions in order to defend against that motion, and filed a notice of the first deposition, which appears in the record. Gannett quickly agreed to drop its motion in exchange for canceling the deposition. That was the last discovery-related item in the court record.

Meanwhile, plaintiffs earlier sought permission to take up to 30 depositions in preparation for trial, while the defendants argued for a much smaller number. The outcome of that dispute has not been disclosed. Meanwhile, a July deadline for completing all discovery is rapidly approaching.

But why the protective order if there's no discovery underway?

Here's goes my attempt to account for the data. What if the protective order covers documents being disclosed in the settlement talks, rather than in normal pretrial discovery? If they are trying to craft a scenario for selling off or spinning off the Star-Bulletin that would be acceptable to both sides, it would require Gannett and Liberty turning over enough business information to allow evaluation of the proposals being considered. This might include financial data on alleged "losses" by the Star-Bulletin, Gannett and Hawaii Newspaper Agency profits, circulation data, the Honolulu market, etc. And if this were being done as part of the settlement talks, it would not appear in docket or the court file.

This could be way off base, but it would account for what appears in the public record and what does not.

 

April 12, Wednesday

I ran across several items on the Gannett front, in addition to this week's announcement of record corporate profits. From Detroit, there's the latest newsletter (and several back issues) put out by the Metropolitan Council of Newspaper Unions. Some interesting vignettes, and some names that will be familiar to folks here at HNA.

Also found in my wanderings, these comments from former Gannett employees reported by The Newspage, which features evaluations of newspaper working conditions by current and former employees. It's amazing how consistent these are with anecdotes drifting from across the hall at Gannett's Honolulu Advertiser.

Top management usually stays around four years at any paper. How they play the News 2000 game dictates their career. Don't expect your editor to challenge the status quo. These numbers are the holy grail. Each Gannett paper I've been at has made reporters rewrite stories to add meaningless people just because of their skin color , if we have their picture, or last name. Reporters who stay around tend to be shoved into editing positions in place of actually looking for someone outside the paper who might have edited before. Interesting thing is that other newspapers are recruiting from Gannett sites, using their well known policies against them. • • •

If you're an investor, I guess this chain is great. If you're a reporter, well, you'd have to be insane to work for these people. It's sad they have picked up papers in some wonderful places to live, but believe me, it's not worth it. A chain dedicated to lunatic rules and micromanagement from the silver towers in Arlington, Va. It's a riot to watch local management scurry around like scared children when word gets out the corporate bosses are coming to town. A lunatic devotion to including quotes from minorities in every story possible -- and even some not! -- and I felt like a fool and a bigot chasing down the one black child in a class full of white kids for a quote in a school story just so I can record it on my monthly scoresheet of minority quotas (No, I'm not making that up, it's a real score sheet they kept!!!) There is so much wrong with this chain it's hard to know where to start, but it begins with mandatory minority score sheets and includes stuff like "no-jump" rules, mandatory "if you go" boxes for almost everything, holding news for a day or two because the next day's "centerpiece" is already scheduled, and for that matter scheduling everything through a series of budget meetings, monthly budgets, quarterly budgets, etc. A bunch of lulus! It's funny, the happiest person I knew at this chain used to work for tv news. That should tell you something.[ gannett , former employee]

• • •

This was once a great newspaper that produced excellent investigative packages -- until Gannett Co. in all its wisdom forced out the executive editor and brought in a hand-picked, "community journalism" guy who quickly appointed several inexperienced editors under him. The results have been devastating. Gone is the hard-edged, watch-dog journalism and in its place is a run-and-gun attitude for fluffy 'news events' or just simply breaking news. Often reporters are told late in the day that "that story you're working on? We need a picture for that now" and off they scramble. The staff, which is quickly fleeing, is dedicated. But the tension is high.[Pensacola News Journal (Pensacola, FL.), current employee]

 

 April 13, Thursday

I got back to the newsroom just before 4 p.m. yesterday and found things apparently normal, but with a generalized background rowdiness and celebratory mood, with lingering hoots 'n hollers still ricocheting down the halls. I wasn't sure what to expect, but a reprieve in the form of a court victory was at the top of my list.

And it was a reprieve of sorts. When I got to the City Desk, a slew of awards were displayed on the counter. It had been a good day for the Star-Bulletin in the annual competition sponsored by the Hawaii Publishers Association.

Here's the breakdown as reported in the Star-Bulletin:

The Honolulu Star-Bulletin was named tops in 10 categories and collected a total of 21 trophies in the annual Hawaii Publishers Association Pa'i awards presentation.

The afternoon newspaper swept the "excellence in design" division and took first-place awards for editorial series, editorial column, sports reporting, business and industry reporting, arts and entertainment, feature photography, essay photography, informational graphics and for its Web site.

Awards presented today at the Hawaii Publishers Association annual luncheon at Hilton Hawaiian Village also included two first places and a total of nine trophies to the Honolulu Advertiser, two first places among three awards won by the Hawaii Tribune-Herald and one first place among five awards to Maui News.

The best staff message to make the rounds summed it up: "It already is a one newspaper town...and we're it!"

Overstated? Yes. Enthusiastically embraced? Yes, although a couple of staffers who attended the awards lunch were embarrassed by the obvious riches flowing to the Star-Bulletin and tried to make a quick and inconspicuous exit, only to see the backs of the Advertiser's management fleeing ahead of them.

It isn't nice to gloat. So we won't do it for long. Promise.

Meanwhile, I can't help a cautious but growing sense of optimism about the future. Just the sense that the odds of a relatively positive outcome have increased in recent weeks, and that the Star-Bulletin could survive it all.

 

April 14, Friday

The joking continued yesterday.

First S-B staffer: "I heard we picked up three times as many awards as the Advertiser."

Second staffer: "Yeah, almost."

First staffer: "Wow, I didn't know they were that good."

And it continued in the same spirit much of the day.

Meanwhile, the Advertiser appears to be preparing a follow-up story on what has happened at the Star-Bulletin since the the original closing date. At least one former staffer has been contacted for an interview, along with current staff. It would be nice to think that the timing reflects some insider knowledge of an impending break in the court case, but I doubt that's the case. More likely it coincides with the 6-month mark since the originally scheduled October 31, 1999 shutdown date.

On top of all our other troubles, the Star-Bulletin has been hit by "cyber squatters", a business group in Honolulu that has moved in to improperly occupy valuable cyber-turf using the name Starbulletin.net, preparing to use our name for their commercial purposes. It's happened to other companies, but that doesn't really matter when it happens to you.

According to the domain search engine BetterWhois.com, the domain Starbulletin.net has been registered as follows:

Registrant:

Peter Yamaguchi (STARBULLETIN2-DOM)
2408 Burbank St.
Honolulu, HI 96817
Domain Name: STARBULLETIN.NET
Administrative Contact, Technical Contact, Zone Contact, Billing Contact:
Yamaguchi, Peter (PY368) peter@JOBSHAWAII.COM
Internet Concept Solutions, LLC.
2408 Burbank St.
Honolulu, HI 96817
808-595-3737 (FAX) 808-595-5222

These are the same folks who operate enewshawaii.com, a pseudo-news site that uses the published work of others without attribution.

Both domains, enewshawaii.com and starbulletin.net, were registered on September 22, 1999, less than a week after the Sept. 16 announcement of the S-B's planned closure. Maybe cyber vultures is a better label for those behind the move.

 

April 15, Saturday

So here we are, seven months after we first learned of Rupert's plans to close the Star-Bulletin. If you were there, you remember it like yesterday. It was a Wednesday afternoon when the word first leaked out, although official confirmation didn't come until Thursday morning, September 16. It was not a pleasant 24 hours.

The premature obituaries brought out some of the best perspectives and great writing. My favorites were columns by John Flanagan and Dave Shapiro, both of which appeared on September 18.

Back to the present. Gannett was hit with a lawsuit yesterday by Lawrence Beaupre, former editor of the The Cincinnati Enquirer. Beaupre alleges Gannett made him a scapegoat for the Enquirer's series about Chiquita, in which a reporter relied on illegally obtained tape recordings of voicemail messages from within the Chiquita phone system. The Enquirer was forced to retract the series, and the reporter has been convicted for his role.

Beaupre's suit alleges Gannett ``kept the focus of the criminal investigation on the conduct of line employees at the Enquirer, and away from its publisher (Harry Whipple), the newspaper division executives and Gannett itself.''

Gannett, in a statement, continues to say it was obviously Beaupre's fault.

 

[Back to top of page]

 

Search this site,
courtesy of the folks at Atomz.com

Since 11/2/99