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Hawaii's Afternoon Daily Bites the Dust The Honolulu Star-Bulletin goes under after 117 years, silencing a strong watchdog in the Aloha State When Liberty Newspapers announced last week it would close the Honolulu Star-Bulletin at the end of October, the news wasn't actually news anymore. Afternoon dailies have been dropping dead for decades. Americans have been turning instead to morning newspapers and television, then to radio or Internet news later in the day. And daily circulation of the 117-year-old Star-Bulletin had declined to 67,000 from a peak of more than 100,000 a few decades ago. Florida-based Liberty decided it coud get better returns elsewhere. But this closure is a tough one to swallow for Hawaii. It's not so much the loss of some 90 jobs. But over the past three years, the Star-Bulletin has been the top media watchdog for the state, going after everyone from powerful union leaders to the political mandarins running the $10 billion Bishop Estate (a nonprofit Hawaii educational trust) to gouging gasoline wholesalers. In fact, it may offer a worst-case scenario for what happens when competition goes out of the newspaper business, especially in smaller communities such as the Aloha State. Liberty is expected to get a $30 million payout from Gannett Corp. in exchange for shuttering the Star-Bulletin. Gannett owns the competing morning paper, the Honolulu Advertiser, for which it paid an estimated $250 million in 1992. EXOTIC BREED. The Advertiser and the Star-Bulletin have been locked into a joint operating agreement that had them sharing many business functions, including printing and sales. These agreements came about as part of the 1970 Newspaper Preservation Act, a federal law that exempted newspapers from antitrust laws and allowed them to share costs in order to ensure the survival of multiple editorial voices. The Hawaii joint agreement, however, was an exotic breed that gave Liberty Newspapers a guaranteed 12% annual return on its investment -- compounded -- regardless of the paper's performance. The only real cost Liberty incurred was in staffing a competing newsroom. "That was the beauty of the deal for them. They got a guaranteed amount. In return, Gannett said we would give you space in the building, and we will pay for your computers. It was something of an annuity for Liberty shareholders," says Floyd Takeuchi, a former editor at the Star-Bulletin and current publisher of Hawaii Business magazine. The Hawaii Newspaper Guild is crying foul, asking why the paper was not put up for sale. "Our immediate goal is to slow this thing down," says guild leader Wayne Cahill, who says he's looking into legal action aimed at stopping the deal. NO BUYER? The union's anger is understandable, considering that Liberty Media is receiving nearly double its reported initial purchase price of the Star-Bulletin of $15 million, despite what it claims to be declining performance. In San Francisco, the U.S. Attorney General has insisted that Hearst Corp., which purchased the morning daily San Francisco Chronicle this year, put its afternoon paper, the San Francisco Examiner, on the market. But so far, the Justice Dept. has made no such request of Liberty or of Gannett to try to find a buyer for the Star-Bulletin. Liberty managing partner Rufus Phillips says no one would buy the Star-Bulletin -- an assessment seconded by many in the news business. "I think they positioned themselves so it would be virtually impossible for another daily newspaper to be economically successful," says Star-Bulletin publisher John Flanagan of Gannett and the 1993 agreement. To be sure, Gannett gets a monopoly lock on the Hawaii market, which some analysts have said is one of the country's most lucrative in terms of profits per subscriber. Currently, some 13 joint operating agreements are in effect around the country, down from 28 in the late 1970s, according to the American Journalism Review. The number of afternoon dailies around the country is down by about 50% over the same time period. The reasons for the decline of afternoon papers are myriad. Getting papers to the stands and mailboxes in midday traffic or out to distant subdivisions became increasingly expensive and pushed deadlines earlier, leaving the afternoon papers looking like old morning papers with virtually the same news. WEB-LESS. Many in Hawaii now fear that with the Star-Bulletin gone, the Advertiser will fail to pick up the slack. This is an even bigger problem in Hawaii, which has no suburban dailies and where coverage by national media is scant at best. Advertiser Publisher and President Michael Fisch has announced that he'll expand news coverage and add a new, separate business section as well as additional features. And he hopes to hire some Star-Bulletin staffers and columnists to build a stronger paper. But some critics question Gannett's commitment to Hawaii. The paper has seen a rash of turnover as top reporters have left for television or public relations jobs. And the Advertiser doesn't have an Internet site for news delivery. Perhaps the most ominous sign of all: The Advertiser didn't even carry news of the Star-Bulletin shutdown until two days after it was announced. By Alex Salkever in Honolulu
EDITED BY DOUGLAS HARBRECHT
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