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The Honolulu Advertiser
Posted on: Tuesday, April 6, 2010

Texas investor bids for newspaper

BY Rick Daysog
Advertiser Staff Writer

A private equity investor from Texas was among those submitting proposals to purchase the Honolulu Star-Bulletin.

Yesterday was the deadline to submit nonbinding bids to buy the state's No. 2 newspaper, which is being sold by owner Oahu Publications Inc. to make way for the company's purchase of the larger Honolulu Advertiser.

Brian Ferguson of Austin, Texas, submitted a plan to buy the Star-Bulletin and its sister publication MidWeek, which is the state's largest weekly newspaper, said sources familiar with the sales process.

Ferguson, 30, is counsel for Anthem Holdings LLC, which owns about 6 percent of A. H. Belo Co. Belo owns The Dallas Morning News, The Providence (R.I.) Journal and The Press-Enterprise of Riverside, Calif.

In addition to Ferguson, state Sen. Sam Slom, president of Smart Business Hawaii, and local Internet publisher Malia Zimmerman submitted a joint bid for the Star-Bulletin, its Web site, the newspaper's circulation list and its intellectual property.

Ferguson led an effort to purchase the Rocky Mountain News in Denver before owner E.W. Scripps Co. decided to shut down the 150-year-old newspaper last year.

He also was part of a group that tried to purchase the Austin American-Statesman last summer. But owner Cox Enterprises Inc. decided to take the newspaper off the market, saying the offers were too low.

John Walker, chief financial officer for Oahu Publications, wouldn't say how many bids were received for the Star-Bulletin by yesterday's deadline.

In an e-mail, Walker noted that any bids would have to be measured by minimum standards set by the U.S. Justice Department and the state attorney general's office, which are monitoring the sales process.

Qualified bidders, in turn, would be given access to additional information about the newspaper's operations and will have between Monday and April 19 to amend their bids.

David Black, Oahu Publications' owner, announced in February that he was acquiring The Advertiser, its Web site, its nondaily publications and its $82 million printing plant in Kapolei.

To satisfy the U.S. Justice Department's antitrust division, Black agreed to sell the Star-Bulletin. If no taker is found, he said he will consolidate the two dailies.

Black has said that he doesn't expect to sell the Star-Bulletin due to the newspaper's losses, which averaged about $13.3 million a year.

Consolidating the two papers will likely result in the loss of at least 150 jobs at the Star-Bulletin.

The number of jobs that may be lost at the Advertiser has not been disclosed but analysts said the Advertiser's job losses could exceed those at the Star-Bulletin.

Black was not offering MidWeek for sale.

Donald Baker, a Washington, D.C., attorney hired by the Hawaii Newspaper Guild, believes that the Justice Department and the state AG's office should take a closer look at the antitrust implications of a joint ownership of the Advertiser and MidWeek.

Baker, who headed the Justice Department's antitrust division during the 1970s, noted that the combination of the Advertiser and MidWeek gives Oahu Publications ownership of the state's largest daily newspaper with a daily circulation of about 115,000 and the state's largest weekly publication that reaches 280,000 homes in the state.

"It seems to be a clearly anti-competitive combination," said Baker.