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Community Group Files Suit to Block Shutdown of Honolulu's Star-Bulletin: Gannett Shutdown Scheme is
A group of newspaper subscribers and readers in Honolulu today filed an antitrust lawsuit in U.S. District Court seeking to block the threatened shutdown this month of one of two Honolulu daily newspapers, the 117-year-old Star-Bulletin.
The group, Save Our Star-Bulletin, or SOS, is being assisted by The Newspaper Guild- CWA, which has been a leading voice for newspaper accountability and responsibility, and which also represents workers at the Star-Bulletin as well as at the other daily, the Advertiser. SOS includes community leaders and activists, former elected officials, advertisers and employees of the newspaper.
Hawaii's Attorney General, Earl Anzai, also announced he is filing an antitrust lawsuit over the threatened shutdown and said he has been in contact with the Justice Department concerning its investigation.
SOS is charging that the Star-Bulletin closing is illegal and violates both federal and state anti-trust laws. Seeking a permanent injunction against the shutdown, the group wants the federal court to bar Star-Bulletin owner Rupert Phillips and his company, Liberty Newspapers Limited Partnership, from closing the Star-Bulletin in exchange for $30 million from the Gannett Co., Inc., which owns the competing paper, the Advertiser. "There is a dangerous probability that the Advertiser and Gannett will obtain a monopoly in the market for daily newspapers" unless this action is blocked, the complaint notes. Liberty announced it intends to close the paper as of Oct. 30, 1999.
Donald I. Baker, the former head of the U.S. Department of Justice antitrust division, is representing the Honolulu community and SOS in the fight to keep an important community asset.
"This is the most blatant example to date of a shutdown-for-pay agreement in the newspaper industry," he said. "There have been ever more instances lately where two competing daily newspapers in a community, publishing under a Joint Operating Agreement, work out some deal by which one paper arranges with the other to stop publishing and abandon the community. The surviving paper ends up with a monopoly, the shutdown paper's owner gets a pile of money, and the community suffers a big loss of independent news and editorial voices. It is hard to imagine how Gannett and Rupert Phillips could claim that they are doing something legitimate. The fact that Hawaii's Attorney General is also bringing suit is good news for everybody, and I hope that the U.S. Department of Justice will itself follow through on its announced investigation," Baker said.
Linda Foley, president of TNG-CWA, applauded both the Justice Department and the state of Hawaii for taking a stand against Gannett's "blatant opportunism," stating, "it is inconceivable that one newspaper can simply pay a competitor to shut down, but that's what seems to be happening in Honolulu."
"We believe this deal directly violates both anti-monopoly laws and the intent of the Newspaper Preservation Act, which is to preserve the quality and competitiveness of editorial voice and news in our communities," she added.
"Despite profits of 12 percent last year, Phillips and Gannett are trying to carry out this shutdown scheme and haven't allowed any other group to make a bid for the Star-Bulletin," Foley said, stating, "shutting down the Star-Bulletin not only deprives newspaper readers of differing perspectives in news and editorial content, but also limits advertisers seeking to reach the different audiences served by these two newspapers."
The deal also has drawn the attention of Hawaii's congressional delegation. In a letter to the Justice Department's antitrust division, Hawaii's delegation applauded the Justice Dept.'s investigation into the situation. "Many members of the Hawaii bar have suggested that the closure of the Star-Bulletin upon promise of a payment by the Honolulu Advertiser may be a violation of antitrust law," they wrote.
Since 1962, the two newspapers have been publishing jointly, with a revised Joint Operating Agreement adopted in 1993 that is scheduled to remain in effect until 2012. The Star-Bulletin was owned by Gannett until 1993 when the chain sold it to Phillips and Liberty because it wanted to acquire the Advertiser.
Phillips has a long history of dealings with Gannett in brokering and buying newspaper properties, often with the result that competing newspapers have been shut down, TNG noted, adding that this deal just adds to the list. Gannett has pledged to pay Liberty $30 million for closing the Star-Bulletin and ending the JOA, even though the Star Bulletin is a profitable and well- regarded newspaper and investors have been earning a 12 percent profit, TNG pointed out.
The two newspapers are the only general circulation daily newspapers serving Oahu, and account for more than 70 percent of all daily and Sunday newspapers published and sold in the state.
Competition between the two papers has given readers in Honolulu a higher quality of reporting and access to editorial and other content that will end with the closing of the Star Bulletin, the SOS group noted. The only other daily newspapers of general circulation available for home subscription are USA Today, a Gannett-owned publication, and the New York Times. "Neither of those papers contains as timely or extensive coverage of Hawaiian news and politics as the Star- Bulletin or the Advertiser, the court filing pointed out.
President Brian McWilliams of the International Longshore and Warehouse Union said: "On behalf of the mailers and delivery workers at the Honolulu Star-Bulletin who are represented by the ILWU, we join the SOS coalition in expressing our outrage at Gannett's blatant and illegal attempt to buy a newspaper monopoly in Hawaii, destroying many good union jobs and depriving the people of Hawaii of independent media voices."
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The group, Save Our Star-Bulletin, or SOS, is being assisted by The Newspaper Guild- CWA, which has been a leading voice for newspaper accountability and responsibility, and which also represents workers at the Star-Bulletin as well as at the other daily, the Advertiser. SOS includes community leaders and activists, former elected officials, advertisers and employees of the newspaper.
Hawaii's Attorney General, Earl Anzai, also announced he is filing an antitrust lawsuit over the threatened shutdown and said he has been in contact with the Justice Department concerning its investigation.
SOS is charging that the Star-Bulletin closing is illegal and violates both federal and state anti-trust laws. Seeking a permanent injunction against the shutdown, the group wants the federal court to bar Star-Bulletin owner Rupert Phillips and his company, Liberty Newspapers Limited Partnership, from closing the Star-Bulletin in exchange for $30 million from the Gannett Co., Inc., which owns the competing paper, the Advertiser. "There is a dangerous probability that the Advertiser and Gannett will obtain a monopoly in the market for daily newspapers" unless this action is blocked, the complaint notes. Liberty announced it intends to close the paper as of Oct. 30, 1999.
Donald I. Baker, the former head of the U.S. Department of Justice antitrust division, is representing the Honolulu community and SOS in the fight to keep an important community asset.
"This is the most blatant example to date of a shutdown-for-pay agreement in the newspaper industry," he said. "There have been ever more instances lately where two competing daily newspapers in a community, publishing under a Joint Operating Agreement, work out some deal by which one paper arranges with the other to stop publishing and abandon the community. The surviving paper ends up with a monopoly, the shutdown paper's owner gets a pile of money, and the community suffers a big loss of independent news and editorial voices. It is hard to imagine how Gannett and Rupert Phillips could claim that they are doing something legitimate. The fact that Hawaii's Attorney General is also bringing suit is good news for everybody, and I hope that the U.S. Department of Justice will itself follow through on its announced investigation," Baker said.
Linda Foley, president of TNG-CWA, applauded both the Justice Department and the state of Hawaii for taking a stand against Gannett's "blatant opportunism," stating, "it is inconceivable that one newspaper can simply pay a competitor to shut down, but that's what seems to be happening in Honolulu."
"We believe this deal directly violates both anti-monopoly laws and the intent of the Newspaper Preservation Act, which is to preserve the quality and competitiveness of editorial voice and news in our communities," she added.
"Despite profits of 12 percent last year, Phillips and Gannett are trying to carry out this shutdown scheme and haven't allowed any other group to make a bid for the Star-Bulletin," Foley said, stating, "shutting down the Star-Bulletin not only deprives newspaper readers of differing perspectives in news and editorial content, but also limits advertisers seeking to reach the different audiences served by these two newspapers."
The deal also has drawn the attention of Hawaii's congressional delegation. In a letter to the Justice Department's antitrust division, Hawaii's delegation applauded the Justice Dept.'s investigation into the situation. "Many members of the Hawaii bar have suggested that the closure of the Star-Bulletin upon promise of a payment by the Honolulu Advertiser may be a violation of antitrust law," they wrote.
Since 1962, the two newspapers have been publishing jointly, with a revised Joint Operating Agreement adopted in 1993 that is scheduled to remain in effect until 2012. The Star-Bulletin was owned by Gannett until 1993 when the chain sold it to Phillips and Liberty because it wanted to acquire the Advertiser.
Phillips has a long history of dealings with Gannett in brokering and buying newspaper properties, often with the result that competing newspapers have been shut down, TNG noted, adding that this deal just adds to the list. Gannett has pledged to pay Liberty $30 million for closing the Star-Bulletin and ending the JOA, even though the Star Bulletin is a profitable and well- regarded newspaper and investors have been earning a 12 percent profit, TNG pointed out.
The two newspapers are the only general circulation daily newspapers serving Oahu, and account for more than 70 percent of all daily and Sunday newspapers published and sold in the state.
Competition between the two papers has given readers in Honolulu a higher quality of reporting and access to editorial and other content that will end with the closing of the Star Bulletin, the SOS group noted. The only other daily newspapers of general circulation available for home subscription are USA Today, a Gannett-owned publication, and the New York Times. "Neither of those papers contains as timely or extensive coverage of Hawaiian news and politics as the Star- Bulletin or the Advertiser, the court filing pointed out.
President Brian McWilliams of the International Longshore and Warehouse Union said: "On behalf of the mailers and delivery workers at the Honolulu Star-Bulletin who are represented by the ILWU, we join the SOS coalition in expressing our outrage at Gannett's blatant and illegal attempt to buy a newspaper monopoly in Hawaii, destroying many good union jobs and depriving the people of Hawaii of independent media voices."
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