The mainland newspaper chain that owns the Honolulu Advertiser has reached agreement to sell the daily to the owner of its small rival, the Star-Bulletin. There may not be two dailies on Oahu when this is done.
Gannett, owner of more than 80 newspapers including USA Today, has stayed profitable in a dismal recession for newspapers by slashing staff. In getting out of Hawaii, it quits the only market, so far as I know, where its local paper does not enjoy a monopoly. Gannett advertising revenue has been down 18% over the past year, partly because of recession, but some of the decline is probably permanent as more people get their news from electronic media including the Internet.
Canadian newspaper publisher David Black, the majority shareholder of the Star-Bulletin, has been more willing to endure the hurly-burly of Honolulu media saturation, but the money-losing Bulletin and its profitable sister publication MidWeek have been hamstrung by an aging printing facility that puts out smudgy color. The Advertiser built a state-of-the-art printing plant in Kapolei in 2004.
Black could have announced a merger of the two newspapers and a combination of the two staffs, but instead he said he would put the Star-Bulletin up for sale and close it if there is no buyer. There are reasons to do it this way. Even though almost no U.S. cities have enough ad revenue to support two rival dailies any more, it would still be considered a possible antitrust violation if two dailies here were to merge. On the other hand, if Black trades up from the smaller paper to the bigger one and can%u2019t find anyone to buy the Bulletin, the Justice Department is unlikely to consider that his fault, since he kept the Bulletin going through years of losses.
This is deja vu all over again. Chinn Ho sold the Bulletin to Gannett in 1971, then, years later, Gannett acquired the larger Advertiser as well, maintaining the two papers under separate editorial management. Then, almost a decade ago, it decided to sell or fold the Bulletin, clearly expecting to fold it, until Black showed up and bought it. Black stuck it out even after the Advertiser, in a controversial move, hired most of the circulation contractors who had been distributing both newspapers during the joint operation.
The move has the potential to bring local owners into control of the state%u2019s largest newspaper. Black took in local partners after acquiring the Bulletin, including attorney Jeff Watanabe and his wife Lynn; Duane Kurisu of Pacific Basin Communications, publisher of Honolulu magazine and Hawaii Business magazine; retired Bank of Hawaii Chairman Larry Johnson and his wife Claire; Island Holdings, the parent company of Island Insurance, the agency built by Colbert Matsumoto and Franklin Tokioka; Dan Case; and C.S. Wo & Sons.
On the mainland, publishers who obtained rival daily newspapers and then shut the less popular paper down, always made the argument that there was still competition from small suburban dailies. In Hawaii the argument didn%u2019t work when Gannett wanted to close the Bulletin because there weren%u2019t any suburban dailies, only newspapers like the Maui News on other islands. Federal officials blocked the shutdown of the Bulletin and gave David Black his opening to acquire the Bulletin.
The importance of newspapers in today%u2019s journalism is, I think, often misunderstood. It is not competition. It is depth and care. We don%u2019t need two newspapers for competition, or even one. Our TV stations provide that. KHON, KITV and HawaiiNewsNow duke it out every way. Our networks compete with each other and with public broadcasting%u2019s substantial news operations. But radio and television operations cannot compete with newspapers for depth and care. Print reporters who don%u2019t have to go on the air every hour can spend all day working a handful of stories. They can interview sources at length. Most of what radio and television reporters know, they learn by reading newspapers. You don%u2019t necessarily need two newspapers for this, but you need one, and that one had better be good. There is some competition for in-depth journalism from other media, including the long-form programming on PBS Hawaii.
Investigative journalism, as opposing to covering the issues and events that happen in public, is a slightly different situation. A newspaper that can%u2019t afford to let a reporter spend a couple days poring through records or tracking down hard-to-find sources won%u2019t break many stories, and the risk increases that people will get away with shenanigans. The Advertiser and Bulletin have been competitive, but I think it is fair to say, not to the same degree as was the case 20 years ago. The real competition on investigative reporting has sometimes come from bloggers like Ian Lind and Larry Geller and reporters at Hawaii Public Radio and Pacific Business News.
This is a financial issue, not a talent issue. Both the Advertiser and the Bulletin employ reporters today some of whom are as good as any who have worked for these papers. But a good reporter can%u2019t uncover a scandal or even explicate a complex issue unless she or he is given time to do it.-->
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Great back story - good one Howard