Final Days? A Newsroom Diary
by Ian Lind, Star-Bulletin reporter
Final Days? A Newsroom Diaryby Ian Lind, Star-Bulletin reporter
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Here it is, the 16th of another month, another full month has gone by since Rupert Phillips' September 16th shocker that the Star-Bulletin would be closed. Ten months, and counting. Suddenly it's looking like it will all be hitting the fan again in the midst of the holiday season. Initial proposals are due to be submitted by Aug. 14, but there's probably little hope that a first round proposal will be both viable and acceptable, given the unrealistic constraints in the current offering (such as the condition requiring the Star-Bulletin to vacate the building immediately on closing of the deal).This means that unless the process breaks down completely and dumps us all back into the antitrust case, there will most likely be another extension during which there will either be negotiations with one or more bidders deemed closest to a real deal, or there will be another round of court battles in an effort to remove the deal-killers from the conditions of sale, followed by yet another "deadline" for bids.
Then there's the little problem of engineering the Star-Bulletin's transition to a new press, a new sales and marketing department, a newly designed newsroom, and a new distribution network. All without an interruption in publication, since any break would be deadly.
Either way, now you're into September before any hope of an agreement in principle, then some time, perhaps only a short time, to nail down the legalese before a final contract can be inked. Then another delay before the deal would finally "close", and then months of reengineering.
So we'll be sitting here in October or November, still trying to understand what the heck is going on, and what it means for each of us, our families, and our futures.
Cheers.
Looking over yesterday's entry, another interesting thing is Rupert Phillips' absence from any public role in these events over the last 10 months. He hasn't made another visit, as far as we know. There haven't been any missives from him as head of Liberty Newspapers. And although Rupert's attorney has made several visits to the islands, he hasn't showed his face in our newsroom. Ol' Rupert's just laying low.I'm starting to believe what was said earlier, that the only think Rupert is interested in is the money he was promised in this deal.
It makes me wonder whether the interests of Rupert and his partners, and those of Gannett, might be diverging. After all, Rupert has a fallback position. If the attempt to close the Star-Bulletin proves unsuccessful, or too costly, he can retreat into the current JOA and just collect those checks for another 12 years or so. If things bog down in court, or if the antitrust litigation is pursued aggressively, the allure of the quick payoff promised by Gannett for closing down now may begin to fade.
Gannett, on the other hand, doesn't really have an easy fallback. For them, it's all or nothing.
So if there is an actual or potential rift, where would evidence of it begin to appear?
It's Monday, 5 a.m. No news from this end yet. Just musings.
Another staffer hits the road. It's the last day for News Editor Curt Brandao, who is taking off for another warm climate. He'll be joining the Virgin Islands Daily News, or so rumor from the other end of our newsroom has it.Curt's been supervising the newsdesk operation since 1998, after gaining experience with several other papers on the mainland. He also came armed with a B.A. in journalism and a Masters Degree in Communications.
"I don't have the ties others do," Curt told Asian Week last year following the big September announcement. "Most more than want to stay; they need to stay. The area is such a part of their lives. It's real heartbreaking. This organization was like a family."
It is probably going to be impossible to recruit someone of Curt's caliber until our situation is resolved, so his departure is really going to hurt. Some very special circumstance could come up that delivers an experienced editor able to step in for a temporary stay, but that would be a long shot. It will probably mean doing the job with some kludged combo of existing staffers. It will have to work for now, but it probably won't work right.
Status quo. No new information, no white knights, no surprises. Just cake for a departing colleague, topped with unanswered questions and deferred expectations.There were brief heart palpitations when a television camera crew was sighted entering the building. It's amazing how quickly possible scenarios can cycle through the imagination with just a minor spark of provocation. But as far as I know, whatever was going on wasn't related to our case.
Judge Kurren's order finally emerged after more than a week of behind the scenes legal bickering and appears to reflect serious problems in the underlying process of marketing the Star-Bulletin as an independent daily newspaper. It's one more "fix" imposed by the court to remove yet another unnecessary roadblock thrown up by Gannett.Peter Wagner, who sits next to me in the newsroom, has been tracking this order since it was first rumored, and did a great job in getting the story in yesterday's paper. The order sets out a cumbersome process for obtaining financial data, with initial requests to the broker followed by written requests directly to the judge, if necessary.
That sounds reasonable enough, except when viewed within the tight timeline which cuts off the due diligence period in just over two weeks.
"For people who are conducting due diligence, a process that's burdensome translates into discouragement," Josh Wolf-Powers, who represents the Star-Bulletin ESOP, told Peter.
Gannett's Mike Fisch responds in an Advertiser story this morning by Walter Wright:
"We have provided a great deal of historical, financial and operational information and are considering requests for expanded information. The interested parties have the full financials, including line-by-line operational data and historical financial data."Was this said with a straight face? There's obviously some serious disconnect between Gannett's world view and the daily experiences of potential bidders.
Roadrunner seems to be back up and functioning, although they restored this page from a backup done last Sunday. I reloaded the current version this morning, and I'm hoping all is now ok.Local businessman, Mike McKenna, has split from the investor group originally associated with former Congressman Cec Heftel and is gathering together his won group, according to Peter Wagner's latest reporting.
Chicago-area attorney Mark Eissman is identified as one of McKenna's partners. Eissman is a former reporter turned lawyer/writer. He's a specialist in media law, and has been attorney for the National Press Photographers Association, although I'm not sure whether he's still serving in that capacity. He was writing for APBOnline before it ran out of money earlier this year.
Martindale-Hubbel serves up very little in the way of useful information.
MARK PAUL EISSMAN
1 Northfield Plz.
Northfield, Illinois
(Cook County)
ADMITTED: 1983
LAW-SCHOOL: DePauw University (J.D.)
COLLEGE: University of Illinois (B.A.)
BORN: 1958And I can't seem to locate references to any involvement in prior business deals of this kind.
So it goes on a humid Friday morning in Kaaawa.
There was a buzz in our newsroom Friday morning after the following correction was spotted in the morning's Advertiser:U.S. Magistrate Barry Kurren on Wednesday ordered that potential bidders for The Honolulu Star-Bulletin can appeal to him if the broker doesn't grant their requests for photocopies of confidential operational and financial newspaper documents which have been provided only for reading in a secure data room. Because of an editor's error, Kurren's order was described in other terms in a story on Page B4 of yesterday's Advertiser.Here's the original description as it appeared in Thursday's story:
McKenna's renewed interest in the Star-Bulletin was revealed as U.S. Magistrate Barry Kurren, who is supervising the sale of the newspaper, issued an order saying that potential buyers who have qualified for the process can make a case to him to seek expanded information from the publishers.The source of the correction isn't evident, although one staffer, imagining a call from Magistrate Kurren, pined over a lost opportunity: "Wouldn't you want to have been there for that call?"
The Star-Bulletin case hit the Poynter Institute's online feature, Jim Romenesko's MediaNews, for the first time on Friday with a link to Peter Wagner's latest story on Kurren's order.
There are now only 10 business days until the end of the due diligence period, not much time to trigger the information seeking process spelled out in Judge Kurren's latest order.As the deadline closes in on us, there hasn't been any news about the players. News hasn't been leaking out of the ESOP committee, so the rest of us are in the dark about discussions, if any, with other potential bidders. These next two weeks will feel long indeed.
But there are rumblings about a staff party next weekend. We're not dead yet! Better believe it. Stay tuned.
On a more mundane subject, I ran into a very useful forum by Digital Photography Review while searching for info on the problem with my camera. Lots of good information here, and the experience level of contributors seems well above average.
SaveStarbulletion.org earlier this month noted the sale of the Santa Barbara News-Press to a local owner rather than a chain. The sale price wasn't disclosed, but articles about the deal estimated it in the $80-100 million range. The newspaper was reported to have a circulation under 50,000, but a dominant position in the Santa Barbara-area market.In light of that sort of transaction, paying a fire sale price for the Star-Bulletin, even with the necessary infrastructure investment, might indeed be a cost effective way to gain a significant share of the statewide market here in Hawaii. There's certainly more than the usual amount of risk involved, but a buyer with newspaper experience might be able to make quite a score.
At least it's a thought that gives a positive spin to the beginning of the week.
Here's a colleague's comment from a longer message received over the weekend:
Been reading your website on a daily basis, by the way. It's a good read and it's missed when the site's down. Don't worry about what others from the operation across the hall might think. After all, it's a personal viewpoint; a diary. Not a news report or editorial. Perhaps the ones who made the negative comments missed that point somewhere along the way. The rest of us visitors probably feel fortunate enough to be able to look over your shoulder and get a personal insight into this long evolution.
According to the newsroom's rumor mill, partnering up with Mike McKenna and Chicago lawyer Mark Eissman is former Chicago Sun-Times co-owner Robert Page, who now owns three community newspapers in the San Diego area, the Rancho Santa Fe Review, the Del Mar Village Voice, and the Carmel Valley News. It isn't clear what this means, except that he brings a lot of newspaper acquisition experience to the McKenna group. [Apologies to CarmelValleyNews.com up north in Monterey County, which I initially confused with Page's newspaper published down south in San Diego. Similar name, different product.]Page was with UPI for twenty years (1960-1980) before being signed up as Rupert Murdoch's assistant in charge of acquisitions, according to a 1996 interview by Richard Harnett:
I left UPI in 1980, went initially to work for Hearst in San Antonio, editor of the San Antonio Light. I stayed six months and Murdoch hired me away to go across the street as general manager of the San Antonio Express-News. I was there for about a year and half and then he brought me to New York and made me president of about every subsidiary company he had that he didn't want to fiddle with, news bureaus, the (London) Times newspapers USA, the literary guide he put out. I was doing all this stuff, and he also put me in charge of acquisitions. The first paper we found and we tried to buy was the Buffalo Courier-Express. Rupert wanted to buy the Buffalo Courier Express. We wanted to negotiate a labor contract with the Guild. The Guild refused to accept what we wanted. What we said to the Guild in Buffalo was that we wanted 90 days to choose who we wanted to keep in the newsroom, without regard to seniority, and "if you give us that, we will sign a deal and we will buy this paper from Cowles." And the Guild refused, and so we went back to New York, and Cowles shut it down, and all those jobs were lost, they disappeared. Three months later I talked Hearst into selling Rupert the Boston Herald. And that time the Guild agreed with us. Hearst had told them, "If you don't deal with the Murdoch people this paper will close." The Herald is still alive 14 years later. So then I was publisher of the Herald for a year after this, then Rupert bought the Sun Times and I went to Chicago. Two and a half years after he bought the Sun Times I put a group together and bought it from him.In testimony during the recent San Francisco newspaper trial, where Page appeared as a expert witness, Page described his history this way:
Well, Mr. Murdoch recruited me and asked me to leave the San Antonio Light and join the Express News, which I did in the Spring of 1981. And I was general manager there, I believe, until sometime during the Summery of 1982 when he brought me to New York and made me a vice president of the parent company and I said, among other things, he essentially had me looking for newspapers to buy.Murdoch bought the Chicago Sun-Times in 1984, and installed Page as president and publisher. Two years later, Page and a group of investors bought the paper for $145 million. Page sold his share in 1989, and bought the California papers.
Former Sun-Times reporter Jon Ziomek provided this pretty jaded version of the Murdoch-Page era in a 1992 Columbia Journalism Review article:
The Sun-Times's image began to crumble back in 1984 when Rupert Murdoch bought it, then sold it two year later to his publisher, Robert Page, and a New York-based leveraged buyout firm, Adler & Shaykin. The sales started, then accelerated, a miserable downward slide for the paper, which used to be considered one of America's best tabloids. Through its newsroom came a series of editors who were unable either to work with Page or to breathe some fire into the newspaper (see "Hard Times at the Sun-Times," CJR, July/August 1988). As morale and circulation sank, dozens of staff members quit.Another interesting description of the reaction in the Sun-Times newsroom to the Murdoch takeover appears in the third part of a 1991 interview with Lois Wille, former editorial page editor at the Sun-Times and, later, the Chicago Tribune.
Tuesday wasn't a good day.Dave said he hopes to return if his health takes a turn for the better, and it could happen. But there was a cold feeling, concealed behind public masks, that said it probably won't happen, and certainly not soon enough to see us through this transition, whatever it is going to be.
It was late morning when we got a staff message asking everyone to gather at the city desk for an announcement.
A bit of reassurance was added. "Don't worry, it's not about the sale of the Star-Bulletin."
Without fanfare, managing editor Dave Shapiro announced that after two weeks of leave, he had decided that it would be best for his health, and the paper, to go on an extended leave.
Dave is a popular editor, an example of someone who survived years of Gannett-ization and emerged as a skilled editor and a wise person. He was teacher and mentor to many, and could be trusted to listen and make fair decisions.
My career as a reporter, such as it is, I owe to Dave, so I'm perhaps less than objective. But he put out a damn good newspaper, and we're really going to miss his presence, at many levels.
When supporters of the Star-Bulletin
took to the streets last year, Dave was
there to show his appreciation, despite the
risk of offending Gannett and our owners.Offers of support and friendship filled the public spaces of the room, but privately, those who understood what was happening struggled with their grief.
After hearing that some had interpreted Dave Shapiro's decision to go on an extended leave as his resignation, Rod Thompson, our man in Hilo, quipped that, "if we need to, we will tie David to his horse like El Cid and send him into battle against the infidels." It was in jest, of course, but it reflects the feeling that Dave's been a key leader and we all hope he'll be back, and however awkwardly we phrase our feelings, that's what we've tried to convey.Interestingly, I've had several recent but delayed reactions to the criticism from an Advertiser staffer last month (June 30). I've been asked if I know who the writer was. The short answer: yes. The somewhat sharp criticism came as a signed note, and I verified that it was authentic. It was my decision not to include the writer's name. So it wasn't an underhanded, unsigned attack, but a straightforward, honest critique, and I accepted and respected it as such. Accepted, not necessarily agreed. Enough said.
A correction: Tuesday's entry originally linked to CarmelValleyNews.com, published by AmericanServer.com in Monterey, instead of the Carmel Valley News in the San Diego area owned by Robert Page. I'm sorry for the confusion, and the links have been corrected and updated.
Yesterday started badly and got worse.It rained during our early morning walk. Then Meda dropped and chipped a beautiful and almost antique earring, and was unable to find the piece that broke off despite an exhaustive search.
And at 1:07 p.m. Hawaii time came the first flash about the decision that had just been issued in the San Francisco newspaper case, which has been linked with the Star-Bulletin's case over the past year.
Partial descriptions trickled in from AP and Bloomberg, and soon the entire decision was available for downloading off the Internet.
It is not good news for us. At least that was my initial sense following a quick skim of the decision. On our side of the newsroom, where I sit along with writers from business and features, and a hallway from the editorial offices, there was immediate debate over both the overall impact of the decision, and the applicability of specific arguments or findings to our pending litigation.
The mood was somber, although there was an underlying desire to read something positive into the text, between the lines, or in the politics reflected in the decision. Others managed to do so, despite the long reach, but I couldn't.
The first telephone calls from Advertiser writers trying to get comments came even before anyone had waded through the full decision. I didn't answer my phone, or respond to a message on my cell phone. Sorry, Walter.
Peter Wagner got it right in his story in Starbulletin.com's Breaking News section, where he predicts the decision will embolden Gannett in its attempt to shut us down. It certainly weakens or removes the leverage potential bidders might have had to seek concessions or subsidies from Gannett in order to complete the sale of the Star-Bulletin. It seems to me that the SF decision pretty much blows those chances away.
There are certainly some differences in the underlying factual situation to distinguish the Hawaii situation from that of the San Francisco newspapers. The isolation of this market, and the lack of any other potential daily competitor, are certainly distinct from the crush of dailies in the Bay Area. But whether that's enough of a difference to turn the legal tide isn't at clear.
Unless a bidder unexpectedly embraces the current Gannett/Liberty offer, which appears to include several obvious deal killers, I would expect the attempt to sell the S-B to be abandoned and the litigation to resume with a motion to dismiss by Gannett. I'm not a lawyer and I could certainly be wrong, and its obvious that such a motion could fail again, but it sure looks like that's where we're headed.
Discussion and debate about the decision continued at home, adding tension to the evening. And to top things off, our cat Hiwa, who has been struggling to survive a chronic liver infection since early last year, managed to eat a good meal but threw it up within minutes. It pretty much summed up my feelings about the day.
The mood in the newsroom today will probably continue to be darkened by the long shadow of Judge Walker's decision, although the search for a silver lining will be in full swing.
Speaking of silver lining, here's a bit from today's sunrise in Kaaawa. Always good for the psyche.
"Are we toast?"
"Well, we're in the toaster," said George Steele, "but it ain't plugged in."That sums up the newsroom reaction yesterday to the news out of San Francisco. The specifics of the judge's decision in the SF case don't look good for us, with the ruling that Hearst was free to shut down the Examiner when no buyer stepped forward with a positive purchase price.
But the ruling did recognize that standard antitrust criteria apply, and that these required Hearst to offer the paper for sale. Applying that to our case would indicate that Gannett and Liberty could not back out of the current sale process, and would be required by antitrust law to sell if a bidder emerges by the deadline in mid-August or whenever the court directs.
Peter Wagner scored again yesterday with what appears to be good news for the Star-Bulletin. Mike McKenna, who has emerged as a spokesman for one group of potential buyers, told Peter the issue of a subsidy from Gannett is not crucial to the deal.
Unlike the Fang family, which has said it needs a $66 million subsidy to operate the Examiner, McKenna said his group is capable of running the Star-Bulletin without help.But a subsidy would expand possibilities, he said.
"We have operating capital; that's not a problem," he said. "But you never have enough operating capital for a new business starting up. A subsidy would give us a lot of different avenues, like buying a press and things like that."
Stay tuned!
"Everybody was remarkably cheerful." That was Meda's assessment of the gathering of a couple of dozen Star-Bulletin staffers last night.
Coming on the heels of the San Francisco court decision, and just before the due diligence cutoff here in Honolulu, there was the obvious potential for weighty concerns to put a drag on the evening.
But the bottom line is that we're not giving up,
That's famous photographer George Lee (right) exerting his calming influence on the assembly. Everyone had a good time and remained under control, although we headed back to Kaaawa before 10 p.m. and missed any serious late-night revelries.
Gluttons for punishment can click on the pictures below for a closer look.
Several different attitudes towards the dark side were evident at Saturday night's party. There are some Star-Bulletin staffers who take this whole experience personally and now hate Gannett and the Advertiser, as well as their news product and most of those involved in it apart from front line reporters. Then there are those with a somewhat more detached view who have simply come to hate Gannett's approach to the news business, but don't blame those who are just following corporate orders. And out on the other side are a remaining group of "realists" who dislike what's been done to the Star-Bulletin but who have few qualms about going to work at the Advertiser if it ends up as the only newspaper in town. There may even be a few who secretly would prefer to make that move sooner rather than later, but who are blocked by the terms of the current court order, which prohibits Gannett from raiding our newsroom.Interestingly, little of the hostility is aimed at Liberty Newspapers, the actual owner of the Star-Bulletin, which virtually everyone recognizes as a shill simply doing Gannett's business as directed.
It's been bittersweet at home, as we're trying to enjoy our last few days with Buster, our senior male cat. The cancer on his face is growing rapidly, obviously causing increasing discomfort, and forcing us towards the point of final decision.
Meanwhile, we're still waiting to see whether tropical storm Daniel (fka hurricane) will be more than a token presence in our area. If it does bring heavy rain, we could have a bit of trouble getting home tonight as there are several stretches of road where flooding is relatively common.
Since 11/2/99
