Injunction Halts Shutdown of Honolulu's Only Afternoon Paper
Labor pains come in many forms and formats, some pre-packaged. People in Honolulu, especially newspaper employees, got a heavy dose of pre-packaged pain and insecurity with the announcement in September that one of Honolulu's two dailies would close. Over 140 full-time and part-time employees as well as some 400 newspaper carriers would lose their jobs.
Most folks would think that a business has the right to close its doors whenever it wants. But what if that business is paid by its competitor to shut down, thus creating a newspaper monopoly? And what if those two newspapers had benefited from public policy that enabled them to reap substantial profits?
MAKING OF A RAW DEAL
Rupert Phillips, owner of the afternoon Honolulu Star-Bulletin,blamed his paper's declining circulation (now at approximately 67,000) for the decision to close. At first glance, that decision is puzzling because Phillips' Liberty Newspapers is making good profits due to a 20-year joint operating agreement (JOA) it signed in 1993 with rival Gannett Corporation. Gannett owns the morning Honolulu Advertiser.
In the 1970 Newspaper Preservation Act, Congress waived certain anti-trust laws in cities with two competing newspapers where one of the two was failing. In an attempt to preserve two editorial voices, a joint operating agreement allows the two papers to share production expenses, fix prices, and share profits, while maintaining separate editorial voices.
Under terms of the Honolulu JOA, Gannett promised Liberty Newspapers an escalating return on the $15 million it invested to buy the Star-Bulletin in 1993. That return was to reach approximately 17 percent, or $2.51 million, by the end of the agreement in 2012. Liberty Newspapers' profit on the Star-Bulletin this year was $1.86 million, roughly 12 percent of its investment.
Now Liberty says it wants to get out of the JOA and invest elsewhere, despite its guaranteed profits. The real reason behind Liberty's decision to shut the Star-Bulletin is that Gannett offered Liberty $26.5 million to end the JOA early and shut down. To many, this smacked of gross corporate plundering and a clear grab for monopoly control of the local print media and its very lucrative advertising profits.
Gannett and Liberty have reportedly been involved in similar deals in the past decade which ultimately resulted in the closing of a competing paper, benefiting one or the other company. This occurred in the 1992 closing of the Graphic in Richmond, Indiana; the 1991 closing of the Little Rock, Arkansas Gazette; and the 1999 shut down of the Mountain Home Daily News in Arkansas.
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Honolulu would have been the next victim of this corporate collusion had it not been for the Hawaii Newspaper Guild (HNG), the International Longshore and Warehouse Workers Union, and four other unions with contracts with the two papers and their central operating and advertising agency, the Hawaii Newspaper Agency.
Instead of limiting their efforts to bargaining over the effects of the closing, the unions decided to mobilize public support. They invited community groups and individuals to join with them to plan a campaign to avert the closing, which was set for October 30. Key to the initial efforts was the help of the AFL-CIO's Community Services Liaison Program of Hawaii. The ILWU and HNG have provided major resources and volunteers.
By early October, the Save Our Star-Bulletin (SOS) group had been formed, encompassing labor and community representatives. The group filed a lawsuit in federal court against the newspapers' owners. The unions and SOS were cheered by the support of Hawaii Governor Ben Cayetano and State Attorney General Earl Anzai, who filed their own lawsuit the same day.
One week later, Federal Judge Alan Kay issued a preliminary injunction against the closing. Kay found that the state was likely to prevail in its lawsuit. The injunction also prohibited Gannett from paying Phillipps the $26.5 million promised in the termination agreement. The stunning decision marked the first time a federal judge has halted a planned termination of a newspaper joint operating agreement.
Nearly 200 workers and supporters attended a community meeting on October 17 to hear community and union leaders explain what they could do to build the struggle. SOS speakers went to neighborhood boards and other community groups, including the city council, to garner support. Over 13,500 people have already signed petitions, and support continues to grow. SOS representatives have appeared on radio shows and in community forums.
On October 20, the city council, after hearing testimony from SOS members, unionists, a disabled newspaper carrier, and a mother of two newspaper carriers, unanimously called on the Star-Bulletin's owner not to shut down the paper and instead seek a buyer. Honolulu's mayor has also opposed the closing.
Gannett, backed by other media chains, asked the Ninth Circuit Court of Appeals in San Francisco to lift Judge Kay's injunction. Gannett argued that as the First Amendment bars government from restricting the right to publish, it also bars government from forcing companies to publish. It's quite a twist of the First Amendment, which Gannett wraps itself in to gain monopoly control over what is printed in Honolulu and other cities. It's also interesting that now that Gannett and the media chains have benefitted from JOAs around the U.S.--agreements meant to preserve dual voices in communities--they are now asserting their unfettered right to maximize profits by eliminating the other voice.
The Justice Department filed a brief before the appeals court in support of the state's lawsuit, and announced plans to begin its own anti-trust investigation of the dealings between Gannett and Liberty. A few weeks later, SOS was elated to learn that the appeals court had refused to lift the injunction. That means the Star-Bulletin will be around at least through the trial, which will not occur until late next year.
John Witeck is a member of AFSCME and coordinator of the Philippine Workers Support Committee.