Honolulu to become one newspaper town


Media critics in Hawaii have been railing against the TV shared services arrangement between Raycom and MCG Capital. But that’s nothing compared to the media consolidation that’s now been announced.

Gannett has agreed to sell The Honolulu Advertiser, the city’s largest daily, to Oahu Publications Inc. (OPI), the company that acquired the Honolulu Star-Bulletin in 2001 to keep it from shutting down. To comply with federal antitrust regulations, OPI will put the Star-Bulletin up for sale in the unlikely event that anyone else is willing to keep the #2 newspaper operating. Otherwise, the Star-Bulletin will be merged with the Advertiser.

Both newspapers publish morning editions, although the Star-Buleltin had traditionally been an afternoon paper. It has a daily circulation of approximately 55,000, compared to 130,000 for the Advertiser.

OPI said it had already been in discussions with the US Department of Justice (DOJ) and the Attorney General of Hawaii about the planned purchase. Financial terms were not disclosed.

OPI is controlled by Black Press, based in Canada. David Black has been a contrarian, expanding in the newspaper business as others have been fleeing.

“We are pleased to be able to purchase The Advertiser, a strong and excellent newspaper. We will endeavor to continue the tradition of good Hawaiian newspaper stewardship as exemplified in modern times by Twigg Smith and Gannett,” said Black.

In a letter to readers published in Friday’s Star-Bulletin, Black called it a “leap of faith” when he and a group of local investors purchased the newspaper, only to be hit by a dramatic downturn in the economy that only increased losses for the paper. “Unfortunately, our community can no longer support two daily newspapers. Even significant operating cost cuts could not stem the financial bleeding,” he wrote.

Black said the search for possible solutions began about a year ago, with possibilities including either closing the Star-Bulletin or buying the rival Advertiser. “As believers in Hawaii, despite taking on an additional financial risk, we felt a rational market consolidation was warranted,” he and his partners concluded. They went to the DOJ and won agreement that OPI qualified for an antitrust exemption as a “failing company” and then began negotiations to acquire the rival newspaper.

RBR-TVBR observation: It may be a bitter pill for public critics to swallow, but media outlets have to operate in the black to continue operating. Antiquated media ownership rules are going to have to be revised to reflect reality.