Monday, June 7, 2010

Don't believe everything you read about Honolulu newspapers

Sunday was a sad day in Honolulu for anybody who loves newspapers.

I've shared my reflections on that day in a post on civilbeat.com. Bottom line: Honolulu can't support two separate newspapers. And it's admirable that David Black has picked up 28 journalists from The Honolulu Advertiser for his new Star-Advertiser. But the claim that he has lost $100 million over past 10 years in Honolulu just doesn't seem believable.

I'm sure he can come up with numbers to show that's the case. But I deeply doubt that his claim represents the underlying situation here. The Star-Bulletin may have lost $100 million, depending on how expenses and revenues are allocated. But his Midweek, a weekly paper distributed to most residences on Oahu, looks to be very profitable. Why else would he have kept it out of the deal when he put the Star-Bulletin up for sale and made an offer on the Advertiser? You might be able to show that the Star-Bulletin lost $100 million, but my guess is that Oahu Publications, the parent company of the Star-Bulletin and Midweek, did far better and made up much if not most of those losses with profits from Midweek. Black put the Star-Bulletin up for sale. Not Oahu Publications.

With essentially a monopoly weekly, a monopoly daily and a great press plant that can be the dominant local commercial printer, it seems like he's in a position to raise rates. Would lenders really have given him money if he had lost $100 million over the past 10 years and wanted to spend another $125 million on the Advertiser? I doubt it. I also doubt he has the kind of pockets to lose $100 million in Honolulu.

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