Honolulu Media Council Meeting on the Closure of the Honolulu Star-Bulletin
Honolulu Media Council meeting · 1999-09-12
Speakers: Janice Wolf (moderator, attorney); Jim Gaddy (editor, Honolulu Advertiser; formerly Detroit Free Press); John Flanagan (publisher and editor, Honolulu Star-Bulletin); Dennis Francis (mentioned by name); Allen (HMC president, first name only); Lucy (audience member, first name only)
Duration: 01:11:30

[00:00:00] Speaker 1: So, the is to welcome and hear the of the principles in this recent newspaper changeover. Janice Wolf, one of our own, an attorney, will be moderating this. And after we have lunch, I will briefly introduce them. They are fairly well known to all of us and Janice will then conduct the meeting and will set the guidelines for this meeting. So without further ado, Bon Appetit, and we'll see you in a few minutes. Start now. It is my pleasure to introduce from right to left, but not politically, I don't think. Jim Gaddy, formerly of the Detroit Free Press, right, Jim? Oh, great news. Yeah, Oh, I'm editor of the Honolulu Advertiser, Mike Fish, publisher of the Honolulu Advertiser, formerly from Bakersfield, California, and Dennis Francis, who is general manager of HNA, and John Flanders, who is the

[00:01:11] Speaker 1: Flanagan. I know that. Publisher and editor of the Honolulu Star Bulletin. I'm going to turn this over now to Janice Wolf, who will moderate this and she will have a few words to say to you before we get started.

[00:01:34] Janice Wolf: Thank you. It's nice to see such a big crowd here today. We have a pretty exciting and important topic. Those of us who have some institutional memory around this place and I know there are some, I'm not sure it's on the panel, but I know it's in the audience here, can still remember old man saying that he would sell the Star Bulletin over his dead body. Well, we all know that what happened to after team, and we also know what happened to the Star Bulletin many times. And here we are again, on the brink of some some very big news for the Star Bulletin for for all of us, and we're very honored to have people here who can answer some of our questions as the saying goes, inquiring minds really do want to know what happened.

[00:02:23] Janice Wolf: I'm going to just try to give you a brief overview of how we're going to do it. I'm told that our panel does not our panel members do not have prepared speeches for you and are prepared to take on whatever questions the audience may have and that's I think the format we're going to proceed with. And please, I will start with a generic question, probably to John Flanagan, after which I'm going to throw the questions open to the floor. Please forgive me if I can't either see you correctly or recognize your name. I'm told I'm suffering from Alzheimer's disease. I'm going to do my best, though. I'm just going to ask for some basic rules, when you get the floor, please frame your question in the form of a question because we would like to move on and get information from the panel.

[00:03:13] Janice Wolf: Number two, please don't throw food. Okay, having having said that, also, I think because I'm expecting to have a large number of questions, what I'm going to do is two things. Number one, I'm going to dispense with with immediate follow up questions from the original questioner, and number two, I'm going to exercise my moderator's prerogative of of calling times when I feel like it's going on too long and we're not getting enough diversity of either opinions or questions. So with that note, let me start with a a very generic question and I'll start with Mr. Flanagan as the person probably most affected by this and ask him why and why now.

[00:04:00] John Flanagan: Can everybody hear us sitting down or should we stand up? I'm not really the person to ask why, since I didn't do it. But our, my, my soon to be former boss, announced that the decision had been made by the people who invested in Liberty Partners to close the newspaper, for a number of reasons. He, he gave three. One was that at the time the newspaper was purchased in 1992, the investors in the Star Bulletin were looking at two potential income streams. One was a return on investment guaranteed by the Gannett Company, our partner in the Hawaii Newspaper Agency. And the second was a possible additional profit amount if the newspaper continued to grow, or if the HNA's profits continued to grow, at a rate of 5% per year.

[00:19:00] Jim Gaddy: investigative reporting activities of of the newspaper. We wanted much more in uh complete business section. We're talking about adding positions there. We want uh uh new and improved neighborhood coverage. so in that whole range of of ideas, that's where the um additional people from the Star Bulletin will will blend in. And we're in the process of interviewing them right now.

[00:19:27] Janice Wolf: Can I get to? Can I just ask one question of Jim? You know, there's been a rumor, those of us on the outside looking in, there's been a rumor about the advertiser putting out an afternoon edition?

[00:19:36] Jim Gaddy: Um, that was under consideration. I think the the chances of of that happening are less likely than they are likely, less than 50%. Um, uh, but it's um, obviously something that the agency will have to um, figure out and get get the the numbers back. There there certainly seems to be a um reason to consider that that possibility, whether or not it happens is I think undecided.

[00:20:01] Audience member: Yeah, I must have missed something along the way, but this is question to anybody who wants to answer. Uh, was there a possibility that the paper could have been put up for sale for for another interested buyer?

[00:20:22] Jim Gaddy: I'll try to answer that. I'm not sure I can. Um and some of this will piggyback off of the comments that John had. Um just to give you a little background, I had the opportunity to meet Rupert Phillips for the first time Wednesday afternoon. So I don't have a lot of background or um understanding of his reasons why he purchased the newspaper in 1993. But I think as they looked at um the structure of the deal in 1993 and they looked at the upside opportunity that never uh came about because of the performance of the agency over the last nine years, um I think he felt that his best deal was a deal that uh he presented and went after with Gannett.

[00:21:12] Jim Gaddy: I don't think frankly that there um has been much success in other markets in selling a newspaper like the Star Bulletin. In fact, in 1993, as I understand it, as I read the documents and uh I've asked, in order to sell the Bulletin in 1993, Gannett had to uh guarantee a minimum profit level, which I think you've all read about and it's certainly public record within the context of that agreement. And then there was the upside potential that John talked about and it was the upside potential based on the previous 20 years of performance. Um, it was that potential that led to pay $250 million and uh Rupert to purchase the Star Bulletin. And that potential didn't um pan out and that was the primary reason that he felt that uh caching out the contract that he had was the better deal for he and his investors. That's my understanding.

[00:22:21] Audience member: Is a follow up to that okay? Uh in the legal subtleties of the JOA legislation, why for example, is Hearst required to make an effort to find a buyer for the examiner and that's not necessary here?

[00:22:36] Jim Gaddy: I'm not sure that they were really required. I think it's an option they decided to um move forward with as I understand it. And and um this is a very complicated area and I don't pretend to be an antitrust attorney nor a JOA expert. But uh part of it was also the structure of the deal and the change in 1993 uh is different than the structure of the deal in San Francisco and it remains to be seen at this point in time whether or not there is a viable buyer for the examiner in effect what they were. There is a difference between a JOA that was originally structured before 1970 like ours and other JOAs that were structured after 1970. There's a whole set of different rules from the standpoint of justice department review and approval. The pre-1970 JOAs really uh require only a courtesy discussion and acceptance that uh the everything follows within the context of federal law.

[00:23:46] Jim Gaddy: The post-1970 JOAs require a whole different set of review and I do know that the parties Rupert and uh Gannett filed um and met with the Justice Department and that was done and uh there was no indication that the deal shouldn't move forward from from what I've been told.

[00:24:13] Janice Wolf: In the in the back?

[00:24:16] Audience member: Uh was there any effort whatsoever to seek a buyer?

[00:24:25] Jim Gaddy: John may be able to answer that. I have no idea whether Rupert chose to go that direction or not.

[00:24:31] Audience member: Is there a chance looking for a buyer still or is it a done deal?

[00:24:42] Jim Gaddy: I think um the answer to that question lies in part in the circumstances of the purchase and the sale of the Star Bulletin in 1992. At that time, um did that own the Star Bulletin? Purchase the advertising? When it sold was only a contract to produce the content of the afternoon newspaper. Uh it didn't sell a share of the plant, the equipment, the real estate, press, nothing. So Star Bulletin has been since 1992, a kind of virtual newspaper. Um absent the contract with with to produce the afternoon the content of the afternoon newspaper, uh there's nothing really left to sell uh except for the name of the newspaper. So a potential buyer is faced with the prospect of the starting in a newspaper from scratch.

[00:25:49] Jim Gaddy: Um, starting a newspaper from scratch is still possible. Um but given the hundreds of places in the United States where someone might consider starting a newspaper from scratch, whether someone would decide to do that in the afternoon in Honolulu or even in the morning in Honolulu is uh I just don't like it but I I say all this uh with absolute ignorance of anything that transpired before Wednesday afternoon at 2:15 when I got word that the Star Bulletin was going to be closed. So, again, I'm I'm uh I'm speculating but uh if the uh the terms of the JOA in uh 1992 were pretty clear.

[00:26:44] Speaker 4: Just let me let me just take this question right in front because she's had her hand up for a quick while.

[00:26:49] Audience member: Yes, something with the planigan thing was I thought very sad. The fact that uh Phillips the publisher is not really interested in the news. What is interested in are the taxes and the profits. Uh this seems to be uh shall we say the motivation for big companies. And I'm wondering if because Hawaii has a small economy and I'm saying this because I am influenced by Schumacher who believes that small is beautiful that maybe it is time for Hawaii to think differently that maybe what is good for Hawaii is something small. Well, uh why uh the question is, do we want to continue the way Hawaii has been for the last few years? And I'm wondering about Gannett because Gannett is huge. Gannett is big and it's going to spend a lot of money here and I'm wondering whether it's going to be worth it, their investment.

[00:28:05] Speaker 4: Oh Jim, do you want to or might take a take a shot at this? What is this going to do to you? Well terms of your philosophy in business?

[00:28:16] Jim Gaddy: Well, let me uh try to address a couple things. John was speculating on some things uh early on in his first response. Now let me try to address a few of those because I think they're important in the context of Dennis Francis and I who have been running the agency for the last year or so. Um, small is wonderful and independent ownership uh local family owned ownership is something that I think all of us dream and wish and have hopes and desires about. I spent seven years prior to Honolulu running such a company. A company that was in the same family for four generations, a newspaper company, a company that every single day struggled to figure out how it was going to pass it to the next generation because of the state taxes and how to continue to serve the community the way it should and keep it um locally owned family owned and close to the community if you will.

[00:29:21] Jim Gaddy: And it's a huge challenge and I frankly not many um are successful in managing it. And any of you who have owned your own business or had a family farm or had some other association with a locally owned business know just how challenging that is. But I think that it misses the point to some degree because I believe that a newspaper can serve its community well whether it's locally owned or corporately owned. I know some locally owned newspapers that do a horrendous job in their community. Uh I cleaned up after management that did that in Bakersfield. And I think the responsibility of the owner is one question but I think it's what you do each day in the pages of the newspaper and how you conduct yourself as a corporate citizen that really becomes the important issue.

[00:30:17] Jim Gaddy: And I know Dennis and I have spent a great deal of time in the last year focusing on the fact that uh with our position in the community, we have a responsibility to participate, be involved, and find ways of giving back to the community and that responsibility has just been moved up a number of notches. Because we are now going to be running a newspaper that doesn't have a daily competitor. Now let me say right now that we cherish that competition because competition makes you better, it makes you more aware and focused, it keeps you focused, and it's going to be a challenge for us for Jim and the news organization and for Dennis and the business side of the organization to make sure that we don't take on a mantle of arrogance uh that we've been trying uh very very hard to shed.

[00:31:12] Jim Gaddy: And that we make certain that the newspaper um listens carefully and responds appropriately and provides uh places for those voices and that will be the challenge. But I think uh whether it's corporately or locally owned, uh doesn't make the the core difference. The real difference is how what kind of leadership the people who are involved provide.

[00:31:41] Audience member: I'd like to follow up on the matter of smallness. Uh the uh Star Bulletin, in addition to a print edition, has had a very effective internet version. In fact, it's one that's been used all over the world and keeps the main one the wear six days a week of what's going on in Hawaii. Two questions, one, is there any chance you could continue the internet edition in some form, and if not, is it something the advertiser could take over?

[00:32:13] Jim Gaddy: I'd love your I've been asked I [unintelligible — audio glitch]uh been a very interesting few days L. and and uh one of the phenomena of uh something like a newspaper closure, you don't think about it, you know what's going to happen and it's very difficult to discern which are the uh which are the mourners and which are the uh carrying feeders. So I've been asked that question fairly often by people who would like to exploit the fact that uh this starbulletin.com appears to be in play. Um, Starbulletin.com is uh was a a labor of love, um, and just to put it in context, it got to the point where 50,000 different people were were spending time with it every week, um some were spending considerably more time than the average reader spent with the print edition. We were looking at times like 30 35 minutes a day, and we loved to have people spend that much time with with the Star Bulletin itself.

[00:33:32] Jim Gaddy: And it reached around around the globe. Um, Mike has told our staff that the uh the advertiser uh and and you know Jim have announced in town that the advertiser is working on an online presence. Um they expect uh the started Mike said last week, they did October. Um, so uh we're looking then at a an online newspaper fueled by the product of um a news staff of 125 or 135 whatever the number might be at the advertiser versus a a possible online presence of uh, uh well, anyway the costs of of hiring uh from scratch and and setting up the operating starbulletin.com at this point um would be again, a pretty daunting prospect, and the the competition for it would be pretty significant and I would assume uh again, that these guys have enough enough uh news sense and business sense that it would be a uh a good product uh that that a a startup starbulletin.com would would go against.

[00:35:01] Jim Gaddy: So uh, I think we've laid the groundwork for a a strong online daily newspaper presence uh from Honolulu. Um, but I don't think again that it would be um possible for this virtual newspaper I've talked of actually becoming an a a virtual newspaper and and staying staying in business. Uh, but uh, again, I the the question really goes to to Mike and Jim what they plan to do online.

[00:35:38] Speaker 4: Thank you. I think one of the to ask about what about

[00:35:47] Janice Wolf: What do you mean, what do you mean making it a hard time? You're talking about the This might be currently maintained with the librarian. Oh, for the library and that? Oh. That's a good State.

[00:36:05] Jim Gaddy: One of the things you have to realize is that we don't have answers to all these questions because all of this um was very sudden. So I think the question the answer I'm going to give you is the correct one. Um because as I understand it today. Clearly on the starbulletin.com, one of the things we will do is work on the transition to Honolulu Advertiser dot com which um Jim and his staff have been working on for months. We got the green light to go uh to our online news site and it was tentatively scheduled for October 1, uh number of months ago. Sandy O'Shiro, uh who's been on our staff for a long time, has been championing that project. We've been working with several local web developers to develop the site, and it, in fact, will be coming up. And we have not yet, at this point, worked out any transition issues um for starbulletin.com but I'm certain that we will transition. We also have another site that needs to be dealt with and transitioned because of the structure of the JOA. We had a separate online presence for the agency called uh surfhawaii.com which is fundamentally our classified and advertising site, and that too needs to be integrated into a single site over the next um number of weeks.

[00:37:32] Jim Gaddy: So uh and it's my expectation from the uh emails that John has forwarded to me over the last few days, and the emails that we received, that we will be looking at some form of the continuing in transitioning the archives, the online archives, uh to the advertiser site. Now, the physical archives uh will continue to reside within the news library that is shared by the two newspapers and they will continue to be accessed um through that. That's my understanding as of today. Um, I was under the impression that the archives would be split and that asset would be moved to another location, but I don't believe that's the case. I talked to Rupert right before he left Thursday, and had that occurred, had he kept them, they would have been donated to the state library.

[00:38:30] Jim Gaddy: But at this point in time, I believe they'll stay intact within the news library structure of the Honolulu Advertiser going forward.

[00:38:41] Janice Wolf: I'm just I'm going to interrupt my moderated prerogative and ask Dennis Francis a question here. Dennis, you know, we we've been talking a lot about, you know, the editorial side of things, but, you know, on the the HNA management side, after the Star Bulletin becomes a thing of the past, what, if anything, can we expect in terms of rate changes? Um, are there um any anticipated increases in or decreases, you know, in in the either in the either subscription prices, tree prices, or even advertising prices now that it's going to be a a one-paper tent. What's what's going to happen in those areas?

[00:39:30] Jim Gaddy: Um, but with regard to the advertising rates, um we do not expect uh to have any rate change and certainly not a a decrease. Um, our expectation is as of November 1st to uh maintain the same leadership levels that we've always enjoyed uh for our advertisers, and that's really one of the key drivers for um that base, we base our advertising rates on on November 1st. As we move the Star Bulletin subscribers over to the Advertiser, uh we will lose approximately 10,000 copies, which is the duplication uh that we know that we have uh at home delivery for folks that take both newspapers. We'll lose those copies, but we won't lose the readers because obviously the the reader will still be delivering, still be reading the advertiser.

[00:40:24] Jim Gaddy: So the results that we uh expect to see, our advertisers expect to see, uh will remain by change. Um, one of the things that I think is important to to remember also, and even with the uh 10,000 less copies that we will have with the duplication, our penetration in the market here will still be, prior to the change, was the second highest in the country. I think St. Petersburg, Florida was was higher, in markets of 200,000 households or higher. Um, with the change, now I haven't looked at the new numbers, but I'm sure it'll probably still be in the top 10, top 15 in in America. So it's still a very, very uh uh healthy market uh for our leadership. And leadership is what uh uh drives our our advertising rates.

[00:41:18] Janice Wolf: So is there any change that's going to happen to advertising I mean the price of buying a

[00:41:22] Jim Gaddy: Price of buying ads will remain as they are today.

[00:41:32] Audience member: that was a disaster in both places and I hate to see one of them go, but I just want to ask who in in or in publishing circles first used this. Both John and Mike seemed to be very subtle about this first move that advertiser

[00:43:19] Jim Gaddy: So, with the newspapers, uh Mr. Phillips, his profession is a newspaper broker. Uh, his what he does uh for a living is buy newspapers and sell them. And he uh he also operates a few of them, but he's mainly uh someone who is is his profession is to buy and sell newspapers. It happens that the Genet company is also in the business to buy and sell newspapers and in 1992 uh Mr. Phillips bought one. But that has ended his connections with the Genet company. His newspapers in in the suburbs of Washington, D.C. in Maryland and Virginia are called the Journal Newspapers, which used to be owned by the Genet company, purchased uh I forget, might be 1996 or something like that, uh. And those newspapers are still printed by uh Genet uh commercial press operations, uh he he pays them and they they print those newspapers. So he has a a long-time business relationship with the Genet company um and uh therefore is you know fairly regular contact with the main from top management in Washington.

[00:44:46] Jim Gaddy: Not not with local management, so they didn't know first hand. Um, yeah, well, as I said, I I was aware of it Wednesday afternoon at 2:00. Um, and uh so there was there was a a flurry of uh of questions and and speculation going through our electronic nervous system in the news building. We have two different well we have two computer systems that you can't look at what the other folks are doing. You can send them messages. So, the messages were flying back and forth and uh within the hour, people were and my staff were asking me there was a rumors were true and I hadn't seen those real rumors, but I had to say yes they are.

[00:45:39] Jim Gaddy: Um, so it was it was not a it was not a local decision. It was it was uh this this transaction was not was not made here and the whole rumor between Mike and Dennis and I, this was far uh of people in Washington.

[00:45:56] Audience member: Some of us who are guilty of believing in conspiracy theories believe that this was decided not by but by that they wanted to slow down the uh Star this time so can make more money. Do you care to comment? Would any of you care to comment?

[00:46:19] Janice Wolf: I hope you are not making any assumptions about how the Advertiser is that

[00:46:27] Audience member: Uh you know well I want to talk about the UFOs.

[00:46:42] Jim Gaddy: Well, I came here a year a little over a year ago and I asked a lot of questions about this place before I decided to pack pack my bags and move the containers and come over here. Um, I think that the two newspapers, two separate operations is, as I think I told you this group a few months ago already, that we operated under the expectation of this merger for 2012, which was the contract they had. Now, clearly the signs nationwide that JLA's are ending earlier. Um and I think that uh it's it's a surprise, but it isn't a total surprise. I don't I don't buy into the conspiracy theory, but that's uh as I look at things from a different point of view than some of you might.

[00:47:29] Jim Gaddy: Uh I think I take uh Rupert at face value when he tells me that uh the investment that we made in 1993 was based on an upside. Uh they are investors in a lot of properties around the country and newspapers, like TV, like radio, like all businesses are bought and sold every day, and ownership changes. Uh, will this uh allow a single standing unit to make more money than the existing structure? Certainly. Um, but there's also a significant amount of of investment uh going forward that is going to be necessary to make it a successful franchise. That would have been if they remained. Uh Dennis and I, John alluded to the whole building concept uh a little while ago in one of his earlier discussions. Dennis and I have spent a great deal of time over the last year working on facility issues and long-term facility issues.

[00:48:39] Jim Gaddy: And one of the questions uh and assumptions that we challenged in February was are we looking at two cycles through the length of the term of this contract? Does it make a difference on location for new printing facilities? And I was told solidly that uh we should plan on two and that was the approach that we took when In fact, we uh made an offer on a piece of property right behind us, because an evening cycle newspaper would have a printing plant requirement in downtown Honolulu, not somewhere out uh in the middle of traffic congestion. So, um these decisions are made by owners at a very high level. It's not something we get involved with. I think it has far more to do with the fact that the return wasn't there since 1993 that was planned as a president and CEO of the company or general partner, as John said, you have a fiduciary responsibility to your shareholders. That's a legal requirement. Apparently Rupert determined that he could make a better return investing the money somewhere else.

[00:50:12] Jim Gaddy: And let me just uh in in case you misunderstood what I what I was saying. Uh the the fact that this that this investment in a new building was looming was I wasn't meaning that that these guys were looking at the uh at at closing the Star Bulletin. But obviously the the person who at the top level of the company has to make a decision uh in terms of uh you know how much money do you invest in Honolulu is is asking that question of themselves and uh with uh having owned upwards of a hundred and something newspapers over the years, I think the company is in a position to figure that out. So uh my point was that because of this impending decision on the on on buildings, certainly somebody somewhere asked the question uh should we be looking at two newspapers instead of just one and how much would we save if we just did one and how much would it cost to make a deal to make sure there was only one.

[00:51:22] Jim Gaddy: So it's it's just a what I'm saying is there's an economic decision there that's forced by the by the fact that uh they are looking at at uh an investment in in the property.

[00:51:38] Audience member: Um curious about the discussion that your newsroom on Thursday Wednesday after the TV stations broke the news. And I didn't find anything in my Tuesday morning advertisers this morning. Yeah. Yeah.

[00:51:58] Jim Gaddy: No, that's right. We were you know it's it's been a very somber newsroom, I can tell you that. There's no celebration going on at the Advertiser over this news. And and I think when they when the story broke on on television, there were a lot of obvious questions. Uh we couldn't confirm anything until Mr. Phillips came to town to make his announcement. Uh, but there certainly was the the same heightened speculation about what was what was eminent um in our newsroom as well. Um but it is it isn't a a celebration. We we certainly accept the uh the business lost. There's a great deal of uh camaraderie between newspaper people, as those of you who are in the business understand. Uh so when this happened, it wasn't uh anything except the the realization that as in other places, another uh voices is gone and that's always a very serious moment in the in the newsroom and it is in ours.

[00:53:05] Jim Gaddy: And when we think about the the new responsibilities that we have, it's it's the same tone. It isn't one of uh of uh glee and triumph. It's it's it's a mature look at the the fact that the community now has a much higher expectation for the performance of the advertiser, um and we're going to go about that in a very serious, deliberate way. There was a deliberate decision not to publish the story before we did one. It was a decision not to publish a rumor. That's correct. Yeah.

[00:53:31] Audience member: So I'm concerned of concerned citizen approach Barbara and said, how would you like to say the star and she and all the arrest of the years of America's richest woman. There's a number of cops that are a member of the constitutional and all sorts of and TV radio stations involved. Uh, she might be satisfied with a modest profit that the star makes. Just I mean and uh respond favorably, meaning that believe that the town should keep two newspapers. She was just feeling strongly on that. If she said, yes, what would your reaction be?

[00:54:11] Jim Gaddy: I think if Cox Communication has an interest, they had to call Rupert. And discuss it with him. She may very well, and I think that's uh something she would have to do with the owner of the Star Bulletin. At the Star Bulletin, all three of the top editors maintain a regular byline voice in the paper whereas none of uh involved with the advertising. This has created a certain personality in the Star Bulletin that some feel was lacking in the advertiser. And my question is, why wouldn't it be part of the advertiser's strategy to try to gain community acceptance by putting a human face on it that's mostly modern human management. That's not a bad thought. Um, actually, there are several interesting things that the Star Bulletin does very well that we're considering, uh some of the faces that they put in the paper, some of the names that you're familiar with, uh I would expect to to be in the advertiser.

[00:55:12] Audience member: You going to see Jim's byline as well? Well, I'm not sure about that. Speaking for myself, I've decided that um I haven't uh at least up to now felt that I had enough time in place here to to speak with authority and and they have actually confidence on on many issues. I feel differently now than I did two years ago. I feel much differently than I did three years ago and far differently than it is four years ago. So maybe we're getting closer to that point.

[00:55:39] Janice Wolf: I'd like to remind the group that have always run our papers. They've come in from the mainland since 1834. This is not new. Is there anybody who hasn't asked a question yet that would like to? So Um, it was I was asking a similar question to Dave. I I was going to ask uh Jim and Mike what beyond the comics, some of the comics, which I assume will fly over to the advertiser, there are uh I hope Uh if there were any aspects of the Star Bulletin, I understand you can't mention names, but columns uh certain beats or the way things are covered at the Bulletin that we can look forward to in the Honolulu advertiser.

[00:56:28] Jim Gaddy: Well, I certainly hope so. Uh we haven't made any firm absolute decisions about anything yet, but there's no question that we find uh uh many things in the in the bulletin that that suggest strength and deep roots in the in the community and and those things I know have a following. Uh we're in the process of reviewing everything in the Star Bulletin. We're in the process of considering anybody who wants to talk to us uh about a possible position at the paper and that includes the the personalities that you're probably referring to. We have Could you please be specific? I mean, I know what that is. That's why you're here, I mean. You know, We haven't extended any job offers to anybody. We haven't signed any new agreements with anybody yet.

[00:57:10] Jim Gaddy: We have conducted nearly two dozen interviews already, beginning yesterday morning. Uh we have I believe about 72 people at the Star bulletin scheduled for interviews over the next two weeks. Wow. And we're going to make decisions as soon as possible. Obviously, there's a great deal of concern over there about, you know, their future. And we're trying to provide as much support to them as we can. So we hope, I hope to give you a, a much clearer answer to your question within two weeks or so.

[00:57:41] Janice Wolf: I think you might come back. Yeah, what. Ted, Ted. Legislative coverage can we expect? Did Did everybody The question was, what kind of legislative coverage can we expect? What the question What the question? Well, it's one of the things that we've talked about a great deal.

[00:57:59] Jim Gaddy: There are some people in Honolulu and in Hawaii who think we do too much. I don't think so. I think that we we've talked about the creation of a special page when the when the legislature is in session that uh packages that news in the same location every day. And another another kinds of public affairs coverage as well. We have three full-time people in our Capital bureau, we're seriously considering beefing that up.

[00:58:28] Janice Wolf: What about your thoughts about the I can't hear you either, I'm sorry. What are your thoughts about the possibility of the Justice Department looking into this? Do you have any prediction about that?

[00:58:50] Jim Gaddy: I think that was expected. And there was a Justice Department briefing by the two owners prior to the announcement from what I understand. And I don't expect any significant change to the outcome for both the Justice Department review and the state review.

[00:59:16] Audience member: Down in front. Um You made your presentation a few months ago and we got the impression that they are that Garnett will be pouring more money, more millions in the business. Now, uh I was wondering, does that mean you expect the economy to improve a lot? What happens if the economy sinks some more?

[00:59:43] Janice Wolf: Okay, the question what for those of you in the back, the question was that apparently might have come before this group in the past and had indicated that Ginette was going to be pouring considerably more more money into their operations here. The question was, what happens if the economy sinks further here? What's going to are going to do? Is that a fair representation of your question?

[01:00:05] Audience member: Well, the is their expectation the economy will improve a lot. But what happens if the opposite uh you know, down, it sinks somehow. In other words, is there a possibility that Ginette is going to leave us as a no newspaper town?

[01:00:30] Jim Gaddy: Um Obviously, newspaper is a very capital intense, a daily newspaper is a very capital intensive business to be in, and it's also people intensive, it's also raw material intensive. Um It's my expectation that uh the Honolulu Advertiser going forward as it has been in the past, will be a viable franchise. Clearly, uh all of the elements that affect our business are changing like everyone else's. The retailing sector is changing rapidly. Internet and e-commerce is having an impact on all traditional businesses. I'm certain it will have an impact on us as well. I can't really predict the future, but I think that uh this franchise is a strong enough franchise that an investment will provide the kind of return.

[01:01:24] Jim Gaddy: And does that mean at some point in time owning the Honolulu Advertiser doesn't make sense for Ginette? It might. Um You know, the way the world goes today, Ginette could be purchased by somebody else. It could be a different owner. I mean, those are all scenarios that could happen. I think that uh Jim and My and Dennis's job is to make sure that we run um the franchise here um effectively and make certain that we're satisfying our customers' needs so they're willing to make the investment that provides the return. Um But there's a lot to be done here. Uh you know, we look at the investments on a life uh time value for the business, not on a short-term value.

[01:02:16] Janice Wolf: I'm told that we have time for one or two more questions. So if there's anybody who hasn't asked a question Oh, is that is that John? Yes. Yes. I um Now, that's an interesting question about probability. Can a single newspaper entity, I don't know if H and A is going to exist or whether it's just all going to become the Honolulu Advertiser with a smaller staff and uh the same ad rates make much more money than the the present two newspaper systems?

[01:02:52] Audience member: I mean do you anticipate it to be more profitable to do that?

[01:02:57] Jim Gaddy: Well, there's I think it could be. Uh it depends on how it's managed. And it depends upon whether or not Dennis does a good job. Now, let me answer a couple of questions. First of all, I want to clarify something about Hawaii newspaper agency. Um Currently, uh the agency exists to serve a partnership and obviously the partnership is coming undone as of October 30th. And so there is no reason for H and A to exist going forward with a single newspaper operation.

[01:03:36] Speaker 6: That doesn't mean that the functions and the elements within the agency go away. Uh clearly, we need people to run presses, deliver newspapers, sell advertising, etc, etc.

[01:03:49] Jim Gaddy: And so, somewhere in early the first quarter of 2000, H and A as an entity uh will either be changed to the Honolulu advertiser or some other entity, but I believe it will be the Honolulu advertiser and at that point uh Dennis who is currently the general manager of H and A will become the general manager of the Honolulu advertiser. And so Interestingly enough, Dennis says the most frequently frequently asked question is uh what's he going to do? He has plenty of things to do. There is a number of expenses associated with uh the bulletin obviously that go away. Uh we are significantly increasing the news columns news hole. I guess I can call it news hole in this group because you understand what I'm talking about.

[01:04:43] Jim Gaddy: Uh that has a significant impact on expense. We're adding um somewhere between 20 and 30 physicians in the newsroom. That has an expense factor. There's a couple of other things that we're doing. We minimized the impact on jobs by making some decisions uh over the last few days that allows us we will be printing a portion of the newspaper, the feature editions and the classified sections uh late each evening prior to the early run in order to maximize the flexibility and color and sectioning on the live run. And that requires us to retain the staff within the production arms that traditionally have been used to print print the Star bulletin. Uh really, the only area of significant impact of the closure of the bulletin and the agency is within the circulation department where we will lose approximately 50 jobs. Uh the majority of those are part-time, but they're very good paying part-time jobs. Uh and those field personnel who served um the news the agency very well, the determination of who goes will be made by the ILWU and their bumping rights within the collective bargaining structure of that group.

[01:06:07] Jim Gaddy: But half of that group will go off the payroll January 1st and the other half February 1st and they will be used after October 30th to ensure that you receive the quality of service and uh the kind of support that you expect as a subscriber of the morning newspaper.

[01:06:28] Janice Wolf: One more question. I'm told we have time for one more. One more question. Okay, Lucy.

[01:06:33] Lucy: It's pretty clear from what you all said that when Janet makes a decision, at least from a financial perspective, there's no local input into any of that. Question number one, will that continue, or why should we believe what you have to say if in fact you don't have very much decision making and power within the whole Janet operation?

[01:06:52] Jim Gaddy: Well, I appreciate your point of view on that. And I think that as Jim and I have talked, um the most important thing that we do going forward is what starts happening November 1st. And only time is going to answer that question for you. Um Certainly, we don't get involved in the buying and selling of franchises. I don't think there's many corporate executives, unless they're in the corporate headquarters that do. We do get involved with all the decisions and determination on how we go forward in what's in the newspaper. And so if you feel that the decisions on the content of newspaper are being made in Arlington, you're mistaken. They're made here. Uh push my button. Um I think uh there was an old story about how uh small town that bank used to have a sign saying that we don't sell groceries and so the grocery store doesn't cash checks. Uh As I said, uh the there may be some decisions made by the owner of the Star Bulletin um having to do with money, but all the decisions as far as the news content and the what we've done with the Star Bulletin in the last six and a half years, rest on my shoulders, um and we've been, by to my lights, we've been enjoyed a uh an unprecedented uh few years in terms of what the Star Bulletin has done. Uh with with great virtually total, absolute total uh autonomy as far as uh uh editorial coverage. So the one the one so lining on the all this is that the uh staff has uh all virtually all told me that uh it's been it's been a glorious ride uh and uh I hope that the advertiser takes advantage of that that spirit and that heart uh because uh I think that's what will really be missed in this town.

[01:09:12] Janice Wolf: Thank you. Nice. I'm going to turn the microphone back over to Allen our president but before I do, I just want to thank everybody myself and also recommend that perhaps we can revisit um this whole subject at some point after October 30th to see how things shake down. I have one waving hand over there. Okay, go for it. I suppose they thought of it. How many people actually do it or not, of course, will remain to be seen. I want to thank uh Janice. I think she did an excellent job moderator. Not an attorney for nothing. And I want to thank our panel. I very much appreciate Jim, Mike, Dennis and John coming today. They all came without their arms being twisted. They all said they would be glad to be here. I might add that Mike came from attending his brother's funeral in Minnesota and I personally and I think as as chair of the media council appreciate that very much.

[01:10:26] Janice Wolf: But the spirit with which they accepted uh the you know the phone call and the invitation was excellent. Um Yes, Janice, I think we should have a follow-up and maybe after October perhaps the first of the year but I think that's a very good suggestion. Um With that we are adjourned and we will see each other next month third Tuesday.