Final Days? A Newsroom Diary
December 1-15, 1999
December 1, Wednesday
It's getting hard to tell whether the insecurity levels
are higher here in the Star-Bulletin newsroom or across the hall
at Gannett's Honolulu Advertiser.
The latest round of worry conveyed from the dark side is that
Gannett, in order to extricate itself from its legal mess, will
move to (1) close down the Advertiser, (2) buy the Star-Bulletin
back from Liberty Newspapers Partnership and Rupert Phillips, and
then (3) move the Star-Bulletin to morning publication.
This is a mind-bending possibility. It would accomplish their
primarily goal of trimming back to publication of a single daily
newspaper. It isn't clear whether this shuffle would bypass
objections stated by the state to using the JOA as cover for
eliminating editorial competition and two independent editorial
voices. It is certainly convoluted enough to obscure the legal
positions staked out by the various parties in the current case,
and might cover enough of the technical bases to be plausible.
In the meantime, a quick look online at insider
trades in Gannett stock turned up the following: Just a month
after Gannett senior vp John Jaske abruptly cut off negotiations
with the Newspaper Guild over the impacts of the announced closure
of the Star-Bulletin and flew off into the sunset, he exercised
options on 9,050 shares of Gannett common stock. The options were
priced between $22.38 and $25.69 per share, and the entire 9,050
share block was then sold for $76 per share, apparently yielding a
quick $450,000 profit.
What a country! First you wield the axe, attempting to destroy
our newspaper and the jobs of those associated with it, then you
reap incredible personal benefits, apparently rewards for a job
well done.
And in the "what a way to spend the Millenium" department:
Gossip has it that all Advertiser staff have been further
demoralized by an edict requiring all hands to work New Year's eve
and remain on duty until at least 1 a.m. on January 1. There does
not appear to be any move afoot for similar wall to wall coverage
by the Star-Bulletin that night.
December 2, 1999
More interesting tidbits about our friends at Gannett.
Here's a list of Gannett's largest institutional stockholders as
reported by Market
Guide. The Regents of the University of California system are
at the top of the list. Perhaps the Journalism departments and
schools in the Cal system should begin a dialog with the regents
about the ethics of Gannett's corporate approach to journalism in
general, and the fate of the Star-Bulletin in particular. You
never know where such dialog might lead.
|
Rank
|
Name of Shareholder
|
Date of Report
|
Shares held
|
|
1
|
CALIFORNIA, UNIVERSITY OF-REGENTS
|
06/30/99
|
10,347,100
|
|
2
|
WELLINGTON MANAGEMENT COMPANY
|
09/30/99
|
10,197,160
|
|
3
|
TUKMAN CAPITAL MANAGEMENT, INC.
|
09/30/99
|
8,932,900
|
|
4
|
BARCLAYS BANK PLC
|
09/30/99
|
8,719,030
|
|
5
|
AMERICAN EXPRESS FINANCIAL CORP
|
09/30/99
|
7,344,719
|
|
6
|
INVESCO CAPITAL MANAGEMENT, INC.
|
09/30/99
|
7,151,898
|
|
7
|
MELLON BANK, N.A.
|
09/30/99
|
6,185,225
|
|
8
|
EQUITABLE COMPANIES, (THE)
|
06/30/99
|
5,794,477
|
|
9
|
FMR CORPORATION (FIDELITY MANAGEMENT
& RESEARCH CORP)
|
09/30/99
|
5,666,708
|
|
10
|
BANK OF IRELAND ASSET MANAGEMENT
|
09/30/99
|
4,910,218
|
December 3, Friday
Computer is still down, awaiting a needed part, so
updating is a chore. Hopefully all will return to normal by early
next week.
Wouldn't you like to be a fly on the wall in Gannett's
corporate HQ for the mud wrestling that must be going on between
the public relations and finance teams facing off against the
legal guys who have been trying to make reassuring murmers while
suffering a series of embarrassing legal defeats.
With the Dec.23 "drop dead" date in the JOA termination
agreement rapidly approaching, Gannett has to quickly decide
whether they will try to moot out the legal issues by allowing the
deal to lapse and just walk away, leaving the Star-Bulletin to
continue publishing (for now).
Unless the lawyers are willing to step forward and guarantee a
win in court well ahead of trial, its hard to imagine Gannett
pushing the deal and its case, given the inherent risks of a drawn
out discovery process that's still ahead.
We don't really know where that leaves us. Advertiser staffers
worry about Gannett bailing out altogether, selling the Advertiser
to another chain and exiting the market. I doubt that's really in
the cards. This would be too lucrative a monopoly market to
abandon. We have to worry about the prospect of continued
bleeding, as Gannett devises more and more small moves designed to
sabotage our circulation. In the past, we just grumbled. In the
future, we will have to raise hell and challenge each such move as
a violation of the JOA, which requires all actions to be taken in
the best interests of both newspapers.
Asian week has been doing excellent reporting on the Honolulu
and San Francisco newspaper fights. I just ran across another
of their stories from more than a month ago that makes good
reading.
December 4-5, Saturday and Sunday
I've been trying to wrap my brain around a review of
Richard McCord's book, The Chain Gang, McCord's personal assault
on the Gannett empire. I've promised a review by the end of this
week to BlueEar.com, which plans
on publishing it online later this month along with excerpts from
this diary.
Instead of finishing the review, I've been mixing up a huge pot
of habanero chili, and setting up a new laptop computer as backup
for my desktop Macintosh, which is still off waiting for a part.
Hopefully the new iBook will let me get this journal back on
schedule, at least if the cats don't get too curious about this
strange object dropped into the room.
|
|
One highlight of the week was webmeister Blaine
Fergerstrom's distribution of badges featuring a
wonderful miniature image of the Star-Bulletin
front page that said it all in bold letters: "Yes,
We're Open". I wonder what the security guards think
about the appearance of these badges.
|
Speaking of security guards, their numbers appear to be
increasing in and around the news building. A guard is now posted
in the parking lot, and at the front door, not simply at the
security desk inside the front entrace. No one is sure whether
these are signs of corporate paranoia or signals of plans and
preparations we're likely to be the eventual targets of.
December 6, Monday
I'm prepared to be corrected. I'm told that the number of
guards hasn't really increased. They are simply deployed
differently. It is true that there was a time period when most of
the guards just hung out in a clump around the side door to the
building. That doesn't seem to happen any more. So my perception
doesn't seem to have been correct.
Christmas decorations have gone up on the outside of the
building as well as inside, with flowers, decorated trees, and to
top it off an animated Santa and Mrs. Santa, surrounded by
decorated trees, that occupy the "no person's land" on the landing
between our newsroom and the Advertiser. Before they removed the
plastic wrapping on the Santa family, someone shoved a
Star-Bulletin so that it was visible in Santa's goody bag,
prominently displaying one of my recent headline stories. That bit
of unsanctioned communication went out with the plastic wrap, I'm
afraid.
Savestarbulletin.org
reports that Hawaii Newspaper Agency, the JOA's operating agency,
distributed Christmas trees to departments throughout the building
except for the Star-Bulletin. I haven't heard any confirmation of
this being a deliberate move, and I have no reason to suspect
folks in the building of being this petty, but the decorations did
stop at the doors to our side of the floor. So please, someone
tell me it's not so!
Actually, this paranoid speculation seems misdirected. Holiday
decorations on our side of the building have not traditionally
been provided by HNA, as far as I know. Perhaps others know more,
or, on the other hand, perhaps not. But the confusion is a
reflection of the divisions that now exist between us.
December 7, Tuesday
It's the anniversary of the attack on Pearl Harbor, and
also my father's birthday. We'll be taking him and my mom out to
dinner tonight to celebrate his 86th year, and it got me thinking
back to late 1969 or early 1970, shortly after Meda and I enrolled
as first year graduate students at the University of Hawaii. We
were struggling along with student jobs. For a short while I
cleaned lab animal cages, then found a student photographer job.
Meda worked at the bookstore, later landing a teaching assistant
slot. We shared an apartment 5-minutes from campus with an old
high school friend of mine, as well as our first kitten.
My dad spent his working life selling restaurant equipment and
supplies, and at that time also had an interest in the little
third floor cafeteria in the news building. At the end of each
week, Meda and I left the campus and trekked downtown and made our
way up to the third floor--no security guards or locked doors in
those days--where we were presented a box of supplies. Usually it
was a dozen eggs, a loaf of bread, and an assortment of leftovers.
An overcooked piece of meatloaf wrapped in foil, some chicken
thighs, and a gallon of something like beef stew, or some bland
flour-thickened goop posing as island-style beef curry. But the
funny thing is that we obviously walked right through the news
operations, and I can recall coming through the Star-Bulletin
newsroom heading for the stairs to the side door of the building,
but I don't recall having any curiosity about the news operation
itself. How ironic to find myself an employee of an endangered
newspaper in the same building 30 years later, wandering into the
same cafeteria for lunch several times a week. It's a time warp
that I'll have to ponder a bit more.
December 8, Wednesday
The Star-Bulletin's online edition reported overnight
that Gannett has asked to delay the hearing on its motion to
dismiss the state's lawsuit. The hearing, which was originally set
for Monday, Dec.13, has now been rescheduled for February 7, 2000.
Gannett said the delay was necessary because one of its lead
attorneys will be "unavailable" next week, and the state agreed,
provided that it does not slow discovery in the case.
Most observers did not view the motion as likely to succeed,
but it has kept many practical decisions in legal limbo, including
hiring and budget matters.
What does this move mean? First, it clearly shows that Gannett
has retreated from the "expedite at all costs" approach which has
dominated until now. This appears to reflect a loss of confidence
in their ability to prevail in court, at least in the short
term.
The delay also throws the ball back to the corporate types who
now control the next move: whether or not to allow the agreement
to terminate the JOA to itself lapse. The agreement has a Dec.23
drop dead clause, which takes effect unless Gannett and the
Liberty Newspaper Partnership agree to extend it.
At this point, there doesn't seem to be any incentive to extend
the agreement, so I'm guessing it will be allowed to lapse.
Gannett that this is no arms length deal, and that Liberty and its
general partner, Rupert Phillips, will sign a new agreement in the
future if and when asked. Backing out of the agreement also
appears to make the current legal action moot, because the alleged
antitrust action was the payment to close the paper.
So the rational course of action for Gannett seems to involve
letting the agreement lapse, and then seeking to devise a new plan
that meets the objections raised by Justice and the state.
December 9, Thursday
The newsroom reaction to Gannett's request for a delay
was muted yesterday. There wasn't a whole lot of discussion of its
meaning to be heard. Some, though, saw it as a negative sign that
adds new uncertainty, or at worst moves the timetable forward
again.
As long as Gannett seemed to be pressing its legal case "pedal
to the metal" and losing, it appeared the Star-Bulletin had a
decent chance of survival at least until a trial, which wouldn't
even begin until late next year. The fear now is that the current
strategy will be dumped, along with the the termination agreement,
on December 23, but a new strategy for closing the paper could be
announced in short order. There are no obvious candidates for a
potential new plan, but folks in positions to hear hints are
wary.
A quick search turned up some interesting links to background
materials on antitrust issues. One starting point is a set of
references for a
course in antitrust economics taught at the University of
Dayton.
The big "we're not dead yet Christmas party" is on for Saturday
night, and should be an experience for all of us!
December 10, Friday
|
A well placed source at U.S. District Court in
Honolulu reports that the Star-Bulletin box outside the
building has been disappeared by Gannett.
A quick walk over to the court confirmed the
kidnapping, which eliminated our competition and left
just the white Honolulu Advertiser box and, to its left,
the outline on the sidewalk where the Star-Bulletin
dispenser formerly sat. The federal court is where
Gannett's legal troubles started, and where the case
remains lodged, but you won't be able to buy our paper
when you are there.
Hey, Mr. Attorney General, does this violate terms of
the preliminary injunction by further harming the
Star-Bulletin's chances of survival?
|
December 11, Saturday
What was originally scheduled as a wake honoring the
Star-Bulletin's scheduled closing was transformed by events into a
victory party. "We're Not Dead Yet" was reason enough to
celebrate, with some zest added by the holiday season. Food and
drink flowed Saturday night as nearly 200 Star-Bulletin staffers,
retirees, friends and spouses gathered at Murphy's Bar & Grill
near the harbor in downtown Honolulu.
Spirits were boosted by a spreading sense that Gannett may give
up the fight, at least for now. There are signals, including
Gannett's move to delay the legal proceedings, consistent with a
fundamental shift in the game plan from the prior frontal assault,
which has been stalled by court order, to a war of attrition. In
this scenario, Gannett abandons the attempt to buy out Liberty
Newspapers and close the Star-Bulletin, and we return to an uneasy
truce within the existing JOA. Gannett then bides its time while
trying to rebuild its public image, at the same time that it
attempts to quietly chip away at the viability of the
Star-Bulletin through cutbacks in promotions, shifting priorities
in sales and distribution that harm our circulation, and other
means. There are unconfirmed stories that potential subscribers
are gently steered towards the Advertiser even if they call to
sign up with the Star-Bulletin, and we fear similar tactics could
be attempted.
Just before Christmas, we'll learn whether the agreement to
terminate the JOA early will be allowed to expire. That will be
another signal of the viability of the above scenario.
December 12, Sunday
Computer problems are still slowing me down, but after
putting Meda on an 8 a.m. flight to Washington, I managed to take
some time to gather a few photos from
last night's festivities. Hey, George, you missed a good one!
Street vendors were observed selling the Sunday Advertiser for
just $1, well below the regular price of $1.75. It's another in a
string of moves designed to promote the Advertiser without
comparable promotion of the Star-Bulletin. We don't know how
widespread this discounting has been, or whether it reflects some
new weakness in Sunday circulation.
December 13, Monday
|
I guess United Public Workers state director Gary
Rodrigues is in that small minority who are very angry
that the Star-Bulletin did not cease to be on October
30.
I started getting the calls on Friday night alerting
me to the personal attack in the "Malama Pono" newsletter
just mailed to some 13,000 members of UPW, the state's
second largest public employee union and a subject of an
ongoing investigation. This follows a
shorter attack printed in the last issue of the
newsletter.
It seems I'm a cover guy for the new issue, but it's
not flattering. The cover features my photo, with snakes
dancing out of my head like halloween dreadlocks. The
snakes, in turn, have the faces of Star-Bulletin editor
and publisher, John Flanagan; managing editor Dave
Shapiro; editorial page editor Diane Chang; and my wife,
Meda Chesney-Lind. From the following 16 pages of
invective, I presume that the union's state director,
Gary Rodrigues, is unhappy with my reporting. Of course,
he has refused since day one to be interviewed, and has
instructed all staff to hang up if I phone, and respond
with abuse if I show up in person. The result has been a
long series of stories over 15
months.
|
There are different reactions to this strange attack. I think
it is kind of humorous. My wife doesn't agree, neither do several
of the UPW members named in the newsletter.
On Friday, I was asked why the community reaction to the
proposed closing of the Star-Bulletin has been so much stronger
than in similar situations elsewhere in the country. I ventured a
few guesses. First, we have fewer daily newspapers statewide than
most other states, and our two Honolulu dailies are the only ones
generally available statewise. Because of our location, national
newspapers like the New York Times or L.A. Times are not generally
available as an easy alternative. Second, we are a very
centralized state, with nearly 75 percent of the state's
population in this county and within this market, meaning that
three-quarters of all Hawaii residents are impacted by the
threatened closure. That also means 75 percent or more of
potential advertisers within the state are also directly impacted
by the tightened monopoly that would remain.
It also seems that there is a reaction to the closing in light
of the substantial profits being generated by this JOA, estimated
at over $40 million annually despite the state's lengthy economic
slump. The public has already been battered by images of
businesses falling victim to economic realities, and then here
comes another out of state corporate powerhouse (Gannett) shutting
down an island institution not because it is failing but because
faceless suits in Virginia are demanding higher levels of
profit.
December 14, Tuesday
|
|
'Tis the season...
This charming couple stand on the second floor landing
between the entrances to the two newsrooms. Santa is
closest to the Star-Bulletin entry, and Ms. Santa over
towards the Advertiser.
In this picture, Santa's prominently displaying a"Save
Our Star-Bulletin, No Monopoly" button, while the Ms. is
wearing another subversive S-B badge.
From time to time, an issue of the Star-Bulletin can
be seen in Santa's bag, or tucked under an arm. And, from
time to time, these items disappear, prompting renewed
decorative efforts.
Small statements and probably little noticed, but
empowering in a funny way.
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December 15, Wednesday
I ran across a brief history of the news business in
Hawaii by University of Hawaii journalism prof and former reporter
Tom Brislin (see
section 3 of his report for a history of the Advertiser and
Star-Bulletin).
I've debating with myself and others about which state of
affairs has been worse: the early period when the Star-Bulletin's
closure seemed certain, or the more recent period when only
uncertainty has been chronic.
The certain bad news of closure had some positive sides. It had
a definite time frame, with a known termination point, for the
impending misery. And although the newspaper's closing would mean
unemployment for many of us, it necessarily also meant new
beginnings, whatever they might be.
The chronic uncertainty of our present situation is tolerable
because the paychecks still arrive on schedule, but otherwise I
think it is experiencially worse because it feels like uncertainty
forever, but as long as the Star-Bulletin continues to publish,
there's a job to do that fills daily consciousness and preempts
any long-term planning for change.
Continued...
Since 11/2/99