April 16, Sunday

This morning's walk was a race with the rain that gathered on the horizon and then began a long, slow, quiet but relentless drift towards shore. It made the walk a bit of a race to get down to the far end of the beach and back home before the rain caught up. I made it, barely. That's a lot how things feel at the Star-Bulletin these days. The storm is out there, slowly, quietly and relentlessly moving our way, and we're just hoping we can make it to safe ground before it hits. My prediction: a deal will be announced before the scheduled May 15 hearing on Gannett's motion to dismiss the antitrust lawsuits. No insider info, just an assessment that it makes the most sense in light of San Francisco, etc. It's not a long wait to see this prediction tested.

 April 17, Monday

The AP story on the suit against Gannett by the former editor of the Cincinnati Enquirer has an interesting factoid absent from the account I referenced a few days ago. According to a tidbit buried down at the bottom of the story, defendants in the case, along with Gannett, are four of Gannett's lawyers, two from their in-house corporate staff, and two from the Washington law firm Nixon Peabody LLP. One of those, Robert Bernius of the Nixon firm, has been appearing on behalf of Gannett in the Honolulu antitrust cases.

Yesterday's Honolulu Advertiser account by reporter Tanya Bricking of the state of the Star-Bulletin ran from insightful to infuriating. Ironically, Bricking was in the process of being hired when the Sept. 16, 1999 announcement of the plan to close the Star-Bulletin was made, and dropped into Advertiser newsroom in the midst of the upheaval it caused.

Among the comments testing my blood pressure was the passive voice in which she reported several things, including: "When news of the Star-Bulletin's demise was announced last fall, thousands of subscribers shrugged and switched to the morning Advertiser." To be more accurate, they were switched by HNA, and many remained stuck with morning Advertisers even after it was clear that the Star-Bulletin would continue publishing. It may be true that some shrugged and went where they were told, but that was an active diversion of subscribers and not a passive fact of social nature. Others fought, spit and kicked their way off the Advertiser subscribers list, but report that it took more than a small effort.

"But what we're trying to do is take the high road," Gannett's Mike Fisch is quoted as saying. Give us all a break, please.

The pattern of consistent delays in getting the Star-Bulletin off the press has been sabotaging street sales. With distribution delayed an hour or more as much as several times a week, those sales can fall 40%, I've been told.

There's also a story going around that a functioning Star-Bulletin news rack finally returned to the U.S. District Court in Honolulu only after HNA supervisors learned its absence had been featured in this diary, which first reported its absence back in December, and then reported the box had returned but without any papers placed in it. There had been various excuses up to then, but suddenly it was immediately repaired after they "discovered" it had become a matter of controversy. Small victories, long war.

 

April 18, Tuesday

Conversation in the newsroom yesterday was dominated by sniping at the Advertiser's Sunday story. There were no positive comments to be heard. Comments ranged from the polite ("written by someone with an agenda") to the very impolite (not printed here).

In between, several substantive criticisms were repeated, in addition to those mentioned in yesterday's entry.

• Although the pending lawsuits were mentioned, the substance of the antitrust issues--already upheld on appeal--did not appear. The importance of the shift in Justice Department attitude was missed. This allowed Mike Fisch, speaking for Gannett management, to get away with dismissing critics as a union-political fringe. It further underscores Gannett management's lack of understanding of community attitudes.

• The story failed to mention the complete or partial loss of several major advertising accounts, which provide evidence of a broader negative reaction to Gannett's plans. These advertisers were reacting both to Gannett's "take it or leave it" attitude, and the related fear of a Gannett monopoly in a post Star-Bulletin world.

• There were a lot of comments heard about continued circulation problems, despite Fisch's claim that its all a natural process. Gravity is a natural process if you're pushed off a cliff, and it all depends on whether you focus on the push or the fall. Gannett's sleight of hand would keep all attention on the fall.

Of course, it's unfair to expect that writers on the other side of the hall can write more critically of their management and its decisions than we can of our own. Sad to say, the Star-Bulletin's own reporting on the continuing controversy has been shallow and tentative, with an awful lot of questions unasked.

Tanya Bricking, the reporter who wrote the story, comments:

"It was an uncomfortable story to have to report and write, but I'm sure you understand all about that."

"I hope people don't try to read more into it than it was meant to say."

Fair enough.

And on the next coast, the nonjury trial to settle whether the San Francisco deal to sell the Examiner can proceed is scheduled to start May 1. We'll be watching with far more than normal interest.

 

April 19, Wednesday

Monday's estimate of the impact of press delays is not supported by sales data, I was told yesterday. If you recall, I passed on an estimate that an hour delay can cut single copy sales by 40 percent. Just not correct, I learned yesterday.

Sales data compiled by HNA don't show anything approaching a 40% dip in weeks where delays have been a problem. Those dips, at most, don't even hit 10%, and there's no way to attribute the entire shortfall to the delay factor. Where we've been hammered has not been street sales, according to the data, but home delivery subscriptions, despite our concerns about the absence of those sales racks. It isn't clear yet whether these losses stem from the post-Sept 16 "confusion" over subscriptions, or, as Gannett contends, a continuation of the long-term slide. This info from a trusted source.

The grumbling over Sunday's Honolulu Advertiser portrait of our newsroom continued yesterday, at times descending to the level of "Who said? He said, she said..." nattering. Time to move on.

 

April 20, Thursday

If rumors were currency we would have felt rich yesterday, as several different stories were making the rounds.

Former S-B city editor Dan Woods was reportedly spotted next door at the Columbia Inn huddled with Gannett/Honolulu Advertiser management in what had the appearance of a recruiting session. Dan was reportedly among those who got offers earlier, but couldn't accept because of the injunction, which prevents Gannett from disrupting Star-Bulletin operations. Now that he's no longer with the Star-Bulletin, the injunction no longer applies to his situation. His interest in a possible move is understandable, and most of us wish Dan the best, but the image still rankled some in the newsroom and is hard to reconcile with memories of his leadership and efforts to boost newsroom morale during the difficult weeks last fall when it appeared the paper faced imminent closure.

In the last week or so, Advertiser staffers were also introduced to Elizabeth Kieszkowski, editor of the Honolulu Weekly, who will be moving to the Advertiser next month as assistant feature editor. Congrats to Liz, who has earned the job.

Lots of things across the hall appear to be coming together in mid-May. Perhaps to coincide with a public announcement of a deal to settle the antitrust litigation, along with resurrected plans for a "new" Advertiser?

Along the same lines, another of yesterday's rumors was a story from a source with access to Gannett management, who reportedly commented that it looks like the Star-Bulletin will be given at least another three years of publishing life. Three years? "Better than a poke in the eye with a sharp stick," one reporter commented.8i

Hypothetically, what would happen in the wake of such a deal? With the injunction dropped, the Advertiser would presumably be free to make additional offers to key Bulletin staffers, stripping us of key human assets. Some might resist, but it would be a very, very hard choice for most.

 

April 21, Friday

News flash: Rumor has it that an announcement is forthcoming early next week regarding a settlement of the lawsuits that have been keeping the Star-Bulletin alive. Unfortunately, I've gotten no further clues as to the content of the pending settlement. Timing this for the Easter weekend certainly adds an interesting flavor.

Another missive from the Hawaii Newspaper Agency management was stuffed in the envelopes with paychecks delivered yesterday. This one is a hoot.

At the top of side 1: "Happy Easter Everyone!...We hope you're enjoying this newsletter as much as we enjoy creating it!" Immediately below is another letter from Mike Fisch regarding current contract negotiations.

After describing the initial exchange of proposals and counterproposals, Fisch writes: "An initial review of the proposals clearly show how much work has to be accomplished. In fact, we cannot afford to let his opportunity for change go by without making significant change in our cost structure and how we do business." Bam! Right to the point.

After some mindless chatter about changing times, industry upheaval, and staying ahead of the competition, Fisch signs off by returning to this year's double edged theme: "I believe we can make the changes we need to without making major changes in the standard of living you currently enjoy." [emphasis added]. And a Happy Easter to you, too.

There was word of another special Save Our Star-Bulletin meeting scheduled for yesterday afternoon, which added a bit of fuel to hints of a deal in the works to settle the antitrust lawsuits. Everyone is anxious for some hard news. Our status as spectators rather than participants continues to rankle.

 

April 22, Saturday

Dawn arrived with two personalities, perhaps symbolic of the ambiguousness of the Star-Bulletin's future. In one direction, heavy, dark clouds, a sense of foreboding, storms to come. Turning in just a slightly different direction, bright sun, promise of a new day.

News flash: Today's Star-Bulletin announces an agreement has been reached to offer the Star-Bulletin for sale. Not a lot of details are available as I write this at 8:45 a.m., but an announcement is being made in the newsroom right about now. I was able to confirm early this morning that a deal would be made public next week, and things moved rapidly after I called the tip in to the city desk. 

11:15 AM. The headline says it all--"Star-Bulletin for sale". The story is unfolding here in a mostly empty newsroom, with just our normal tiny Saturday staff at work. After my tip this morning set things in motion, managing editor Dave Shapiro came in and announced that Judge Alan Kay has approved a plan to make an aggressive effort to sell the Star-Bulletin during a 65-day window. Unknown to us, the announcement of the deal had been deferred until Monday by mutual agreement among the parties to allow our employees to be notified and to give us a break on the story. My tip forced the issue , after receiving clearance from Judge Kay, we went with the story today.

	Dave Shapiro (right) and Guild staffer Wayne Cahill (second from right), gather at the city desk to check proofs of today's front page with its headline announcing an agreement to seek a buyer for the paper.
	By noon, word had spread across town and television news crews had arrived on the scene. Several lined up to get interviews with Shapiro, and pleaded for comments from staffers. I tried to help. We're still sorting out both details and feelings. Both will obviously evolve over the next few days.

 

April 23, Sunday

This dog don't hunt.

After a second reading of the court-approved sales agreement and the conditions it spells out, it's hard to see much possibility of a buyer emerging in response to this offer. There are no sweeteners attached. Gannett and Liberty make no financial concessions. No subsidy, no loan, and actually nothing with a cost attached.

Gannett offers up just two things, both of which will be paid for by any buyer: a contract to print an evening Star-Bulletin, and an offer to sell news racks and a few used vehicles.

Absolutely no break for the buyer.

No subsidy. No piece of the JOA. No transition period where they could operate out of the existing newsroom, or in any other way make it easier for a buyer starting a newsroom from scratch.

No break on contract printing prices mentioned.

Nothing that would be a cost item for Gannett.

Just buy the paper and clear out of the building by the closing date, and the rest is up to the buyer.

The buyer pays severance to employees laid off, if any.

The buyer bears all costs except the broker who will beat the bushes.

And presumably Gannett has a book of numbers to show prospective bidders that shows we are bleeding money,whether true or not, since that is what they steadfastly maintain in court.

When I read through the agreement, it looks pretty dismal.

Someone would have to be out of their minds to bid on us under these terms.

And the agreement requires the buyer to produce a daily newspaper of general circulation, so it isn't possible to spin off the Internet operation on its own.

Do I smell toast burning?

 

April 24, Monday

A day of relative rest is usually good for a little perspective, and yesterday was no exception. Maybe things are not as grim as they look. The agreement to offer the Star-Bulletin for sale is a loser, will be hard on our nerves, and will contribute to more than a few sleepless nights over the next 60 days, but it is not the end of the line.

Kaaawa, Hawaii 4/24/00

Keep in mind its origin: it is the product of the two months of settlement negotiations directed by a federal magistrate. The agreement on the table now may reflect Gannett's refusal to budge one inch in the settlement talks. They apparently haven't been willing to give up anything, except under strong pressure from the judge to finally agree in principal to a sale, although with conditions that make any transaction unlikely.

If they really wanted out from under the litigation, they could easily sweeten the deal with some portion of the $100-150 million that they expect to save over the next 12 years if the Star-Bulletin is eliminated. They are gambling that a lack of buyers will add legal weight to their next attempt to have the case dismissed.

On the other hand, attorneys for the plaintiffs must be gambling that the settlement judge will play an active role in reviewing the positions of any potential buyers and, in the process, press for concessions from Gannett in order to encourage qualified buyers to submit workable proposals.

And if no buyers emerge, they'll be back in court seeking real discovery in order to defend against the motion to dismiss. So far, Gannett has avoided discovery like the plague. Whether they will give anything up when there is no other way to avoid that first round of depositions is anybody's guess.

We are left with the hope that there's a bit more fight left in our team, and the disquieting realization that we don't really know.

Since few people were working on Saturday, this morning will be the first time most have had a chance to talk over the new sale agreement. The range of reactions will be interesting to see.

 

April 25, Tuesday

The week started with a staff meeting in the aisle fronting the Star-Bulletin's city desk, with congratulations to everyone for hanging together through a very tough period and maintaining a viable prize-winning newspaper that will provide value to potential buyers.

There were a few questions and comments about the deal announced on Saturday, but staffers were pretty reserved. I think everyone's hoping for the best, but not at all sure what to hope for.

Discussion continued through the day about potential buyers. The sense is that major chains are pretty much out of the picture, but that there may be several local groups interested. Some talk drifted through the halls of an employee buyout, but there seems no focal point for such an effort. A comment attributed to attorney Alan Marx suggested that these sales can result from strange connections, like a person in the Midwest who has some money and always wanted to live in Hawaii.

Some folks were trying to predict the worst case. If no buyers emerge and Gannett refuses to sweeten the deal, would the court case move quickly? Do we have at least several months? Does this move strengthen their argument to dismiss the case? These are all questions we can't answer, but that reverberate continually through our side of the building.

In truth, about all we can do is wait and see what happens, and hope that our colleagues don't give up yet.

In an expected move, former S-B city editor Dan Woods made it official by announcing his resignation from Pacific Business News. Dan will be taking a new position at the Honolulu Advertiser. That's two of our former key players who have been picked up by the Advertiser in their quest to become a better newspaper.

Perhaps it was coincidence, but on the other hand it could have been a clue that something was happening on Friday when a staff message went out announcing that the Hawaii Newspaper Agency's family picnic, scheduled for May 7, was being postponed indefinitely. This after weeks of hype, prize notices, and other inducements to get people there. Friday, of course, was when our local management were informed of the "agreement to sell".

 

April 26, Wednesday

Is this how it goes for the next 60 days? It was the beginning of wild ride in a strange, low key, slow-motion sort of way as staffers tried to come to terms with the probabilities while envisioning the possibilities.

The realization is spreading that even a successful sale will inevitably mean downsizing and layoffs, so survival of the Star-Bulletin won't mean continued employment for all of us. It also means it will be a fight, and will take more open communication in the newsroom, to keep folks on board in the months ahead. I can feel some wavering as people quietly and individually attempt to compare the possibilities of continued life with the Star-Bulletin to their other options. Everyone is aware that the clock is ticking, and decision time is getting closer.

There was also active speculation on potential bidders. Yesterday's most active was former Hawaii Congressman Cec Heftel, whose Heftel Broadcasting owned Honolulu's KGMB-TV during a period when its news programming was tops in the ratings. Heftel was featured last year as one of the 100 who made a difference in the islands.

Heftel Broadcasting later built a network of Hispanic radio stations in key markets across the mainland and became the nation's largest Spanish-language broadcaster. The company was sold in 1996 for a reported $218. I'm still looking for information on Heftel's share, but he appears to have held the largest share of the company's stock prior to the sale, according to a 1996 proxy statement. At the sales price of $23 a share, Heftel's over 3.6 million shares would have been valued at about $83 million, which appears to give him the financial and managerial resources to successfully pull off a deal.

There's a longer list of suspects, of course, and other candidates will be floating to the surface over the next several weeks, I'm sure.

As one S-B staffer commented after several rounds of speculation, "it's not much of a fantasy, but its better than not having any fantasy at all."

 

April 27, Thursday

At another time it might have been funny. Yesterday it just seemed in bad taste, with images that don't help our cause. Staffers in the Star-Bulletin newsroom were stunned by the advertisement appearing in our own pages yesterday, featuring a black and white photo of a urinal, a toilet stall, a pair of legs and crumpled pants visible under the door of the stall, and an extension cord running in. The caption urged readers to "quit stalling" and get online news from starbulletin.com.

We don't know if it was created in house by HNA, or by an agency working for us. Whatever the case, it wasn't what we wanted to see. If you've got other reactions, let me know.

No news but lots of talk of the search for a buyer. All we can do is wait, and folks aren't happy about it. That was something I heard throughout the day yesterday. Being left dangling, and treated as if we're not relevant to the process, makes me angry, and others seem to share that reaction. Our award-winning staff should be a selling point, but I'll bet the broker eventually chosen to beat the bushes won't include us in the sales pitch.

I suppose we could freelance and send a special squad of key staffers to pitch the paper to potential buyers. There's nothing precluding us from doing that. At least it would be doing something.

I've got a cat with skin cancer to pick up from the vet early this morning. He's coming home with a couple of stitches on his forehead and a new hole in his ear, where the biopsy took out a small chunk. And I've got a story that's proving harder than I thought to carve out of a mountain of documents. And the background anxiety of a newspaper (and our employer) on life support. What a day.

 

April 28, Friday

Report for the feline oriented: Cat mission accomplished. Buster got home, a bit worse for wear. He's got a couple of stitches over his right eye, and a hole big enough to hold a pencil in his right ear. He wasn't feeling very photogenic this morning, and this was the best picture I could get on short notice. A few older photos of Mr. Buster available as well. He's definitely a "designer ear" cat, and already had an ear job on the other ear. That was last year's adventure. Now his ear will probably whistle during a good run. There have moments, during the course of these couple of weeks, that we've been feeling just about as beat up as Mr. Buster, and without his ability to retreat into 16-hour per day naps.

 

In the newsroom, even stalwart, "down with the ship", last man standing types are starting to consider how a Star-Bulletin sale, if successful, would affect them personally and they're starting to toy with alternatives, including the possibility of jumping ship early. That's a change in atmosphere, in mood. These are still early indicators, but the stepped up level of anxiety seems real. Personal fears, effectively repressed for 6 months, are rising to consciousness once again.

There's an interesting story in today's San Francisco Chronicle describing political pressure by Mayor Willie Brown during the negotiations over the fate of the Examiner. This follows a Chronicle story yesterday on the broader political currents. Good reporting and fascinating reading.

 

April 29, Saturday

Out of control! And proud of it. The Star-Bulletin is characterized in an upcoming "60 Minutes" report as the one thing in Hawaii's political environment that the influential Bishop Estate couldn't control. Our teaser on the broadcast, which ran on Thursday, highlighted a comment by former estate trustee Henry Peters. Peters said the Estate should have bought the Star-Bulletin back in 1992, when Gannett sold the S-B in order to buy the morning Honolulu Advertiser. We ended up as the only thing they couldn't control. The segment is scheduled for broadcast tomorrow.

Peters' comment elicited a surge of newsroom pride ("We can't be controlled!") as well as a surge of relief that we didn't end up as the mouthpiece for the powerful estate.

Then came a more somber reflection on our current circumstance as someone recalled the fate of the Virgin Islands Daily News, which was owned by Gannett when it won a Pulitzer in 1995 for its investigative reporting on local corruption. Two years later, Gannett sold the paper to an ally of the governor, who then proceeded to dismantle its award winning staff. Executive editor Penny Feuerzeig was quickly demoted, then, according to a blurb in E&P, resigned after the new owner wrote an editorial critical of officials pushing for cuts in telephone charges. The paper's new owner also owns the telephone company.

Ironically, a key player in the drama was former Advertiser editor & business manager Mike Middlesworth, who returned from retirement to take Feuerzeig's place as executive editor.

April 30, Sunday

Pacific Business News has a doom-and-gloom story about the Star-Bulletin's odds of survival in its edition this week, which should be online soon at www.bizjournals.com/pacific. The story concludes that the costs of shifting the Star-Bulletin to independent publication outside of the JOA would be too high for any new buyer, especially in the initial years. More importantly, staffing the business side from scratch in a small community will be difficult if not impossible. Experienced staff in areas ranging from advertising sales to press operators are probably not available.

One unknown is the Justice Department's degree of interest in the Hawaii case. The SF Chronicle's analysis last week noted that there were seven DOJ attorneys focusing on the Examiner-Chronicle case. How many are still tracking the Hawaii situation? That could make a big difference in terms of the potential for Gannett and Liberty sweetening the deal in the weeks ahead.

 

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