Final Days: A Newsroom Diary
November 16-30, 1999

November 16, Tuesday

We reported the story of the 9th Circuit Court decision today, saying that it is now "likely" that the Star-Bulletin will continue to be published until a trial now scheduled for September 2000. There are a lot of caveats, or should be, reflecting the points in the legal process where Gannett will be given new opportunities to test their courtroom prowess. Judging from the consistent decisions in the case to day, though, things are definitely looking up.

There was celebrating at noon after our final edition deadline! After a brief staff meeting, where editor and publisher John Flanagan and managing editor Dave Shapiro ran down the meaning of the court action, there was a brief "toast" punctuated by three rowdy cries of "Banzai!" before digging into a huge pile of pizza.

Shapiro set the tone by noting that 6 years ago, after Gannett purchased the Advertiser and it was not clear whether a buyer would be found for the Star-Bulletin, there was little community reaction. Now, the community is expressing support, people are signing petitions, picketing in front of the building, and saying clearly that Honolulu needs to retain our voice. It's a reflection of the changes that we've made, and the paper that we've become, and we need to respond by giving the public more of what it has come to want and respect. We all were able to share a moment of pride, as well as a sense of the difficult task we face to produce a constantly improving newspaper under deteriorating conditions.

There were questions, continuing in discussions throughout the day, but despite the nagging anxieties it was a day to relish.

Late in the day, we learned that the Advertiser has returned all the resumes of S-B staffers who applied for positions prior to the preliminary injunction. I guess it means those offers (contingent on closure of our paper) are now "off the table," but no one is able to say for sure.

Personally, I'm trying not to complain, really, but I hoped to be in Toronto this week accompanying my wife to the meetings of the American Society of Criminology, her primary professional association. After the September announcement that the S-B would close Oct. 30, it seemed the perfect post-trauma getaway.

So I quickly booked the flights, cashed in miles for upgrades, and wrapped my mind around a visit to the edge of winter (anything below 65 degrees looks like winter from here in Kaaawa). Then we got the first reprieve, which hit with that weird blend of good news and bad news. A preliminary injunction, with an expedited appeal to be ready for ruling after Nov. 10. The timing couldn't have been worse for a trip scheduled to begin on Nov. 15. The Good news: We're alive! The Bad news: What about Toronto?

The answer felt obvious, but wasn't necessarily intuitive. I sensed that I couldn't leave if there was a chance that a decision would come down during the week we would be gone. It just didn't seem right to abandon ship at such a crucial time. No,that's not the right nuance on the feeling. I just asked myself how I would feel if I were gone for the crucial event? What if the court ruled against us (which seemed like one distinct possibility) and the S-B published for the last time while I was gone? The appeal would, we were told, be assigned to a 3-judge panel at the beginning of the week, and it could be one day or several days before a decision was issued. I decided that the risk of being AWOL for a critical decision felt far worse than missing out on a brief working vacation.

But coming to terms with that decision personally was qualitatively different, and far easier, than trying to come to terms with it as a couple. Balancing the shared disappointment of a lost travel opp with the partially shared experience of living through this extended event was as uncomfortable as the outcome was obvious to both of us.

Bottom line. I canceled my reservation, dropped Meda at the airport yesterday afternoon, and got back to the newsroom to find that the ruling had been issued while we were on the road. So I'm tending the cat herd for the week, Meda arrived in Toronto about two hours ago, there's pizza for lunch in the newsroom. At least I can take some pleasure in the fact that there are surely people in Gannett headquarters, and possibly even upstairs in our building, who feel a lot worse than I did this morning.

November 17, Wednesday

First, an explanation. Oceanic Cable, which operates the Road Runner service in Hawaii, took its system down overnight in order to complete a move to a new data center. I believe that the server for its user web pages was down and these pages unavailable during most or all of this time. The system is still not completely up at 7:20 a.m. local time. So those of you who were greeted with an error message, my apologies. Hopefully it won't keep you from returning.

"It was the first good night's sleep since September 15." I heard several people making similar comments in the newsroom yesterday, referring to the night following the 9th Circuit's decision to keep the presses running until the trial or other legal disposition. Of course Gannett is coming right back at us with an immediate request to have their motion reheard by a full panel of the 9th Circuit. Whether that is enough to provoke more restless nights remains to be seen.

Another thing I've heard as people speculate about their futures: "This is the best job I've ever had." Somehow the Star-Bulletin in the past few years has been a great place to work. Good people, lots of freedom, and a good product getting better. What a world, where this is all irrelevant to the decision that will be made by the court and by our owners.

I don't have any personal knowledge of whether Rupert Phillips has any image of himself as a newspaper person. Phillips, who now lives on a spread in Florida, controls the general partner in the group that owns the Star-Bulletin and is now trying to shut it down. But I can't image any newsperson choosing to close an award-winning paper that is guaranteed to return profits for at least twelve more years.

Gannett, on the other hand, is full of people who personally pride themselves on their experience on the news side. For them, there's no excuse. Time for more of them to "come out with your hands up," in the phrase used by one Gannett expatriate.

November 18, Thursday

Things seem to be calming down. There's still lots of talk in the newsroom about the meaning of events, but less about the meaning of life and the universe. At least that's how it feels. And that talk is reverting to more typical settings, rather than the roaming "stop work and jaw" sessions that were so common in the last several weeks. We're getting centered again, given a brief respite from the total uncertainty. A life span of months is certainly easier to cope with than a possible "drop dead" at any moment.

I'm plagued today by (a) an ISP having technical problems that are making updating and accessing these pages difficult, and (b) the intrusion of a couple of great stories I've got to get out ASAP.

Toronto, after weeks around 50 degrees, has fallen down around freezing. Maybe I'm not sorry about missing the trip and this criminology conference after all. But here's an interested tidbit from the conference. In criminological terms, Gannett's handling of the Star-Bulletin has certain characteristics in common with the classic "bust out" or "bleed out" schemes that are often found in bankruptcy fraud cases. In such deals, a legitimate company is stripped of assets, often using a "front" person from out of state. It can be done either quickly (in a bust out) or slowly (a bleed out), then the company is closed, citing poor finances, leaving others to cope with the loss. Perhaps a closer look from this viewpoint would be interesting.

 

November 19, Friday

 

It was flower leis and four kinds of cakes to mark another departure day, this time for city editor Dan Woods, who accepted a position at Pacific Business News before our reprieve came through. "I thought we would all be leaving at the same time," Dan said in a brief farewell before turning to the serious cake cutting. Later in the morning, a brief city desk staff meeting looked ahead at how we will juggle assignments and deadlines in order to cope during the next couple of months with two desk positions vacant, and other staffers trying to burn up remaining vacation days. It will be an "interesting" end to the century, it appears.

The rumors of the day emerged from the Advertiser, where the paranoid speculation has Gannett doing the old "cut and run" in reaction to their legal woes. Worry is that a sale could be to a smaller chain even less willing to invest in real news. In this scenario, Gannett skims off the real estate assets for future development and sells their interest in the Advertiser and the current JOA. This wouldn't necessarily be bad for us, because under the JOA terms, obligations to the Star-Bulletin and our owners would have to be assumed by the buyer in such a transaction.

November 20, Saturday

Bravo to Rovner, Swann & Company for bringing us the week of the hibiscus, a competitive edge with intelligence and a subtle flair.

The episode goes back several weeks to the day of the shootings at the Xerox office in Honolulu, which took place at 8 a.m. and gave the S-B both the challenge and the opportunity of same day coverage in our final edition with a deadline around noon. The Advertiser followed with extended second-day coverage the following morning, after which Advertiser managing editor Jim Kelly reportedly exhorted his troops with a "we kicked their ass" speech (can't really blame him, since similar claims have been known to be made in our newsroom on occasion as well). But Kelly, again according to interoffice scuttlebutt, followed up with a mocking email message to staff, to the effect that the Star-Bulletin would probably be featuring an investigative report on the price of hibiscus plants (as opposed the their own continued and expanded coverage of the shooting aftermath). Kelly's comments were interpreted as a slap at the string of in-depth probes by Rob Perez of consumer pricing in gasoline, food, etc., which have drawn a lot of reader response.

News of all this quickly reached our newsroom and set minds to work on a suitable response. The result was Wednesday's front page, featuring Rob's latest assessment of competition between local and "big box" hardware stores, illustrated by a beautiful yellow hibiscus by David Swann. Several emails from the dark side indicated the signal was immediately understood and appreciated (by some, at least). The hibiscus appeared again yesterday when our front page four good local stories. It was one of those days when our reporters produced more good stories than would fit.

There was another funny moment on Monday afternoon, the day the 9th Circuit upheld the preliminary injunction keeping the Star-Bulletin open.

When an Advertiser photographer appeared unannounced in our newsroom to get some photos of the celebrating (such as it was), she walked into the graphics room where the yellow hibiscus was sitting on a desktop in the middle of the room. There were suppressed giggles and quick excuses (Swann mumbling, "oh, let's get my wife's plant out of the way", etc) as it was hurriedly shoved under a desk and out of sight.

The October 22 issue of the Guild Reporter has a short history of Rupert Phillips, general partner of the group that owns the Star-Bulletin, including his several prior deals with Gannett ("The Other Man from Hope"). Worthwhile reading.

November 21, Sunday

A day off for handling prudential matters and getting things back in order at home for Meda's return. Thinned the newspaper stack, but kept the best editions from the past week for her review. Luckily none were processed by any of the cats, who sometimes can't resist tearing into a section or two just for the heck of it.

We really need to do some more thinking about what we can learn from this process as it goes forward, how we can maximize that learning, and how to share our lessons with journalists in other parts of the country. Even if we eventually lose, we can hopefully take things away from the experience that will help in the next newspaper battle, wherever it occurs. Obviously, this won't be the last war over the direction being set by the corporate lords of news.

We thought it was going to be an early party to mourn the closing of the Star-Bulletin, and instead it's going to be a Christmas party in December to celebrate that fact that "we're not dead yet!" The party was announced at the end of the week, so there's something to look forward to.

November 22, Monday

Here's a great email exchange passed along by another Star-Bulletin staffer (using the pseudonym Shatter):

From: Shatter
To: corpjobs@gcipoa.gannett.com
Subject: U.S. Dept. of Justice
Date: Wednesday, November 10, 1999 3:07PM

Today Microsoft, tomorrow Gannett! Nay sayers often exclaimed that "you couldn't go up against Bill Gates' money and attorneys. I do wonder though, how Doug McCorkindale and John Curley would look in those prison pinstripe suits.
(note: Curley is Gannet Co. Inc.'s chairman/CEO, while McCorkindale is vice-chairman and president)

* * * *

From: "Gannett Corp. Job Placement" <corpjobs@gcipoa.gannett.com>
To: Shatter
Subject: RE: U.S. Dept. of Justice
Date: Fri, 19 Nov 1999 10:45:00 -0500

Thank you for your interest in Gannett. Should your qualifications meet our current employment needs, you will be contacted directly for an interview.

 

Someone at Gannett must also be choking on the following claim in a list of questions & answers aimed at reassuring advertisers in the wake of the initial announcement of the Star-Bulletin's closing: "The transition between the Star-Bulletin and the Advertiser is pretty seamless," they said with an air of confidence. Gannett told advertisers to expect no drop in circulation as a result of the Star-Bulletin's planned demise, which appears to be an unrealistic goal.

Now with a preliminary injunction in place, a Department of Justice investigation in the works, and thousands of Honolulu residents signing petitions opposing Gannett's plans, the transition is proving to be anything but seamless.

On the other hand, according to a November 4 letter from Gannett's local attorney, the state has indicated "a few concepts" that might form the basis for a settlement. "However," the letter goes on, "they are not sufficiently developed to be discussed in any meaningful manner." We'll be watching for further clues with great interest.

On the "cure for low blood pressure" front, I just listened to another batch of outrageous comments by Bob Rees in a brief interview about the Star-Bulletin situation with the media watchdog group Fairness and Accuracy in Reporting (FAIR). The interview was aired on their radio program, CounterSpin, for the week of Nov.12, and is available online via RealAudio.

Rees really ought to bite his tongue when his ignorance and/or bias are so painfully displayed. Among his claims:

• If defeated in court, Gannett will "simply" inform Rupert Phillips that it is cancelling the JOA. Of course, the JOA is a contract, and the terms of this contract do not permit such a unilateral declaration by Gannett, but Rees is rarely deterred by such petty factual considerations.

• Rees dismisses both daily papers, saying without any evidence that Hawaii has suffered "a severe lack of news" about what is going on locally. He must have missed news of the annual competitions sponsored by organizations like SPJ and the Hawaii Publishers Association, where the Star-Bulletin has been winning more than its share of awards. I can understand Rees trying to pitch the importance of the Honolulu Weekly, where his writing appears regularly, but he distorts the the overall state of journalism in Hawaii and does us all a disservice.

•He states flippantly that "everyone in town" knew that Rupert Phillips had come to town in September to close the Star-Bulletin. There sure wasn't any evidence of this claimed common knowledge, either in the reporting of the issue at the time or subsequently. This is another case where Rees displays his rich fantasy life.

November 23, Tuesday

Computer glitches are giving me a headache. My Mac crashed Sunday night, and I haven't had time to tear into it searching for the culprit. This is delaying my daily entries, among other things.

I'm also embarrassed that I didn't walk over to federal court and pull the State v. Gannett case file until yesterday. Even investigative reporters sometimes forget the mantra: documents, documents, documents. There wasn't necessarily a whole lot of new stuff to be found in the file, since the heavyweight legal briefs have been filed at the 9th Circuit level. But I realized that I had never seen what specific "relief" the state is seeking.

According to the complaint, the state wants Gannett to be permanently enjoined from making "any payment" to Liberty Newspapers Limited Partnership in exchange for an agreement to close the Star-Bulletin.

In addition, the state wants the court to block Liberty from closing the Star-Bulletin unless they first make a public effort to sell the papers, including all assets of the Honolulu Star-Bulletin, its interests in the Hawaii Newspaper Agency, and its contractual rights under the Joint Operating Agreement. The state asks that the offer be made according to guidelines established by the court, including requirements that no Gannett affiliate can be the purchaser; the purchaser must continue to publish for at least two years, and that Gannett not interfere with the sale in any way.

And, if the Star-Bulletin isn't sold, Gannett should be enjoined for five years from making any payment to Liberty without court approval, directly or indirectly, except for payments called for in the JOA or other payments made in the normal course of business.

Meanwhile, confidence here in the newsroom is growing, evidenced by the distribution of assignments today for a January 1 special millenium insert.

More evidence: I was criticized this morning for the signature added automatically to my outgoing email. I last revised it soon after the September 16 announcement that we would close down, and so it read: "Proud to be part of the Star-Bulletin in its final days."

"An update might be in order," my colleague suggested. "The 'final days' don't seem quite so final right now."

A very good point, and a quick revision was made. My signature now reads: "Proud to be part of the Honolulu Star-Bulletin during our landmark fight to keep publishing."

November 24, Wednesday

When you're in a position like ours, with the boot of a giant media corporation just overhead and restrained primarily by some of those public servants we so often criticize, it's hard to recognize reasons for optimism. We found one such reason yesterday when the state won a minor but meaningful antitrust victory.

The victory came in the form of an agreement to settle an antitrust suit against two oil companies charged with antitrust violations in a federal case filed last year. The two companies, which have an 11% share of the Hawaii market, agreed to pay $15 million and agreed to cooperate as the case continues against five larger dealers. The state alleges that the companies conspired to keep retail gas prices in Hawaii the highest in the nation. When the case was filed, the industry dismissed it as a political ploy, but this settlement demonstrates the state may have more legal muscle in the antitrust area than it formerly appeared. This seems to be very good news for us. If nothing else, the litigation experience the legal team is gaining on the big oil case should contribute to stronger prosecution of the case against Gannett.

I've heard several people talking about showing support for the Star-Bulletin by making gifts of 1-year subscriptions to the paper. It sounds good, but like a lot of great symbols, isn't too practical. Although it will send a message to the Gannettoids upstairs, the bottom line is that it will leave more money in Gannett's pockets. This because Gannett sweeps off all income from the joint operation of the Star-Bulletin and the Advertiser, and then makes set payments to Liberty Newspapers Limited Partnership, our owner, according to a pre-established schedule. The terms of this JOA were written by Gannett prior to their sale of the Star-Bulletin in 1993. This is another example of the difficult terrain we are negotiating here.

Yet another sign of the times. The clear glass outer doors of Gannett's executive offices upstairs in our building have been given a reflective coating which effectively renders the office and its occupants invisible. Previously, anyone heading to the cafeteria or bathroom on the third floor could be nosy and check out the artwork and the people inside. Under the circumstances, the execs might have felt uncomfortably vulnerable. Or perhaps Gannett's lawyers are just trying to provide for their own anonymity the next time they all fly into town. Or maybe it was planned years ago and has nothing at all to do with current events.

The computer at home is "down". Not good news. I'll try to load an update tomorrow via my Palm III, which will add another level of adventure to this enterprise.

November 25, Thanksgiving

Thanksgiving duly celebrated. I'm fortunate to not only have both parents alive and kicking in their mid-80's, but well enough to make the nearly hour-long drive from their home in Honolulu to our place at the end of a short dead-end street in Kaaawa, tucked in the narrow stretch of land between the ocean and the cliffs that rise abruptly along much of the island's windward coasts.

I can say there is more than usual to be thankful for this year. My parents have survived another year, past the odds, and past almost all their old friends and siblings. The Star-Bulletin has lived beyond its pre-announced date of death, its obit written and ready but unpublished. And I have to sneak in major thanks for our black cat, Hiwahiwa, who came close to death early this year but has also managed to survive against the odds, babied along at times with fresh fish and baby food, but now staging an every so slow, gradual recovery from a liver infection that resisted six months of varied antibiotics and other high-tech attacks.

Not much to write today, because the fate of the paper has taken a backseat to the day's personal meanings. But tomorrow it's back to the newsroom and the ongoing battle for survival.

 

November 26, Friday

In less than a month, Gannett and Liberty Publishing will have to decide whether to abandon their current attempt to close the Star-Bulletin.

December 23 is the "drop dead" date specified in their agreement to complete the termination of the Joint Operating Agreement and stop publication of the S-B. If it can't be accomplished by that time, because of the state's suit and the preliminary injunction, either party can back out of the agreement and choose to reinstate the existing JOA.

Allowing the deal to drop dead might create a back door out of the current legal morass by making the state's lawsuit moot, but Gannett would put the savings they anticipate at risk. At an estimated $120 million or more over the remaining 12 years of the JOA, that is a considerable risk.

There is sure to be internal debate within Gannett over legal strategy, and just as surely debate between Gannett and the other newspaper chains who also have interests at stake in this litigation.

We're hoping for some break that will provide insight on these hidden debates.

November 28, Sunday

There were few newsroom discussions this week about the fate of the Star-Bulletin, but I'm not sure whether the insecurities and anxieties are being repressed, or whether this short period without specific life-and-death decision points has lulled us into short-term complacency.

The few hushed discussions have involved staffers who have gone for interview and have now received offers from other papers on the mainland. No one wants to leave the Star-Bulletin, but they have a complex set of factors to consider. How do you put a value on this job, factoring in the much debated probabilities of the S-B surviving for another six months, year, or more, and compare it to a job that requires a physical move to another state, with unproven working conditions but higher probabilities of long-term security? Will waiting allow more opportunities to emerge, or will these prove to be opportunities lost?

These are difficult decisions under any circumstances, but are far more difficult given the inherent uncertainties of our predicament.

How paranoid should we be? That's what several folks are wondering after a series of mishaps have delayed one or both of our editions over the past several weeks. Delays mean that more subscribers receive the first edition rather than the updated and more complete final. It happened on Monday, when I had a pretty good front page story on the state's continuing investigation into the collapse of a health insurer with union ties. By the final edition, the graphics had caught up with the story, but this didn't make it to home deliveries out where I live. It's always depressing when this happens, but some suspect that these press hassles coincidentally occur more frequently during our press run than the Advertiser's.

I've been noticing more places on the street, including some in residential areas, where HNA has placed an Advertiser box without any Star-Bulletin box. We need to get data on disparities to see whether they have increased.

There have also been the other screw-ups, like the subscribers switched to the Advertiser on November 1 despite the court injunction keeping us in business. These were attributed to individual errors, but could there be more in the background? From our position, we don't know. It seems less likely than in other Gannett shops, since we're unionized and somewhere in the chain of command these moves would require participation of union members. But, with jobs at stake, would people go along to save themselves?

Former City Editor Dan Woods appeared on the masthead of Pacific Business News for the first time in its edition that was received Friday. Another early indicator of the "bleed out" that has just begun.

The seasons have changed in Kaaawa. Winter surf has definitely appeared along our coast., but the odds appear to be increasing that the Star-Bulletin will still be publishing when the last of this winter surf has passed. We have to watch Gannett's appeal for a rehearing at the 9th Circuit, along with the motion to dismiss the case which will be heard here in Honolulu on Dec. 13, if I recall correctly. But we're watching these proceedings from a distance, and being so irrelevant to the legal process induces a sense of powerlessness that is hard to shake.

November 29, Monday

That crazy Y2K bug had better not get out of hand, because we'll definitely be short handed for the last few weeks of the year. Unlike lots of other papers, we'll have a big clump of people on vacation as a result of the company's "use it or lose it" policy, including several key reporters and the night city editor. Interestingly, when the updated vacation schedule was passed around today, I didn't hear anyone questioning whether there will be a Star-Bulletin to return to after these vacations are over. That's a measure of the still growing confidence in our short-term future.

November 30, Wednesday

Word is that the 9th Circuit does not expect a quick turnaround on Gannett's request for a review of the 3-judge panel's decision upholding the preliminary injunction that has allowed us to keep publishing.

It is expected to take 6 weeks, or until the end of the year, to poll all 9th Circuit judges on the matter.

In other news, a quick review of the SEC's Edgar database indicates that the State of Hawaii's antitrust suit and the adverse legal rulings have not yet been disclosed to Gannett shareholders. The state's suit was not filed in time to be noted in Gannett's most recent 10-Q report for the quarter ending September 30, and the matter is apparently not considered to have enough material impact to warrant a special interim filing.

Gannett's 10-Q does report that newspaper publishing earnings were up 23 percent for the quarter, driven by strong results at USA Today and USA Weekend, and continued declines in the cost of newsprint. Meanwhile, local newspaper advertising revenue and volume were flat, while local circulation across the Gannett chain has slipped 1-2 percent over the past year.

So it goes in Gannett-land.

 Continued...