POSTED: 12:05 a.m. HST, Jun 07, 2010
LAST UPDATED: 12:58 a.m. HST, Jul 10, 2010
David Black, majority owner of the Honolulu Star-Advertiser, likes to sail at below-zero tides -- a condition many avoid for fear of running aground.
"He's a critical-thinking free spirit," said his son Fraser Black, who oversees editorial quality control at Black Press Ltd., which has 150 papers and 3,500 employees. The family, believing content quality is vital, has had a family member working on it full time for 15 years.
The elder Black doesn't steer clear of obstacles out of the water, either, as evidenced by his face-off with the nation's largest media company, Gannett Co.
Black, who bought the Honolulu Star-Bulletin -- the state's No. 2 circulation newspaper -- in 2001, is a 64-year-old daredevil with a penchant for sailing on long trips across the ocean, driving fast cars and investing in dailies, said Manfred Tempelmayr, retired president of Washington-based Sound Publishing Inc., who has known Black since the early 1970s.
Black bought the Gannett-owned Honolulu Advertiser and the Ohio-based Akron Beacon Journal and became involved with the San Diego Union Tribune at a time when other media chains were shying away from papers, Tempelmayr said.
» Age: 64
Acquisition of the Advertiser and consolidation with the Star-Bulletin reflected Black's determination to keep a flagship daily far from his home in Western Canada. He covered more than $100 million in Star-Bulletin losses during his battle with Gannett. Then, Black decided that if he couldn't beat them, he would try to buy them.
"I never thought that we would be able to compete with them and run them into the ground," he said. "I always thought in my mind that if I couldn't make the Star-Bulletin make money that I would use it as a springboard to buy the Advertiser."
Top company advisers questioned the move, said Rick O'Connor, chief operating officer of Black Press. "We were all very, very nervous about the Star-Bulletin," he said.
Black could not improve the Star-Bulletin even with the free MidWeek to bolster advertising, and it never made a profit in any year that he owned it, he said.
"It slowly got better, but it sapped a lot of our energy to stay in the game," he said. "It wasn't the time in history where we had the luxury of building out a second daily."
Tempelmayr said Black "has great patience and always creates a vision of what he thinks something should look like and works toward it."
Black took risks when he bought the Canada-based Metro Valley Newspaper Group, a collection of 20-plus papers, in the 1990s, as well as when he expanded his newspaper chain into Washington and Hawaii, he said.
He also spent 22 years fighting a newspaper war in Kamloops, B.C., before turning it around a few years ago, O'Connor said.
"He's dogmatic," O'Connor said. "We need more people that are defenders of our industry and have their own wealth on the line."
While Black saw his role in Honolulu as that of a long-term investor, others in the organization became impatient after the fifth year of losses, O'Connor said.
The profitable Black Press could sustain Honolulu in the short term, Black said, and the private company also was free from shareholder pressures.
"I didn't know what else to do with the profits," Black said. "I thought this was as good a use as any to see if we could make this work."
At that point, Black "had so much in the pot that he didn't want to give up the hand," Fraser Black said. "He loves a challenge, and this was probably the biggest one of his life."
As Star-Bulletin losses mounted, cuts were made to staff and resources. In 2001 the company laid off 22 employees and cut staff pay. In 2009 the company laid off about 80 people, including 19 from the newsroom, and froze wages. About 453 jobs were cut this month by the consolidation.
Despite Black's lack of financial success in Honolulu, the local board of directors took him seriously when he eyed the Advertiser, said Larry Johnson, a Star-Bulletin minority owner.
"The thought was at one time David was the slayer of Goliath and quite possibly history might repeat itself," Johnson said, adding that Black's assurances that he would cover the minority owners' losses bought him time.
Black took about a year and a half to reach an agreement with Gannett. The Star-Bulletin was offered for sale in March to satisfy U.S. Justice Department antitrust requirements. Unions at both papers and some lawmakers questioned the sale, but Justice officials cleared the purchase and consolidation after three prospective buyers failed to meet a minimum price.
BLACK PRESS LTD.» Headquarters: Victoria, B.C.
» Executive offices: Riffington, David Black's historic estate in Oak Bay, B.C.
» Ownership: Primarily David Black's family; however, Torstar Corp. owns about 20 percent.
» Annual revenue: About $500 million
» Subsidiaries: Oahu Publications Inc. in Honolulu and Sound Publishing Inc. in Poulsbo, Wash.
» Employees: About 3,500 full time
» Newspapers: Majority owner of the Honolulu Star-Advertiser in Hawaii and about 150 newspapers throughout Canada, Ohio, Washington and Oregon
» Management team: President and Chief Executive Officer David Black, Chief Operating Officer Rick O'Connor and Chief Financial Officer John Walker
HONOLULU STAR-ADVERTISER» Headquarters: Waterfront Plaza
» Investors: Black Press is a majority owner; other investors include Fairfax Financial.
» Shareholders: Black Press, Fairfax Financial and a team of local minority owners including Dan Case, Dennis Francis, Larry Johnson, Duane Kurisu, Colbert Matsumoto, Jeffrey Watanabe and Michael Wo
» Management team: President and publisher Dennis Francis, senior vice president of marketing Dave Kennedy, senior vice president of advertising director Glenn Zuehls, vice president/editor Frank Bridgewater and vice president/technology Roger Forness
» Employees: 474
» Newsroom staff: 117