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Newsday facing
more circulation woes
ABC flunks paper on reports for 1999 through 2001
In its hugely embarrassing circulation
scandal, first revealed in an advertisers' suit against the Long
Island newspaper, Newsday came to admit that it had cooked the
circulation numbers it provided the Audit Bureau of Circulations,
along with advertisers, as far back as 2002.
But it appears it probably went on as far back as the
'90s, as
critics have long charged.
That contention gained major heft yesterday when the ABC yanked
its approval for the paper's circulation reports through much of the
period between 1999 and 2001, concluding that the paper provided
insufficient documentation to support the numbers it claimed.
The ABC action comes as the paper reports yet further
declines in its circulation.
The paper, in a story today, quotes the ABC as saying it was
"withdrawing its unqualified opinion as to the material
fairness of the circulation reported for Oct. 1, 1999, to Sept. 30,
2001. As a result, certain circulation figures for this period may
not be fairly stated."
The auditors did not find fraud but rather a circumstance
under which fraud could well have occurred. The paper quotes the
auditors as saying there were "minimal publisher records and no
third-party records are available prior to March 31, 2002. The
auditors also concluded that there was an opportunity for material
misstatements to have been included in reports issued for these
prior periods."
The ABC finding will certainly serve as ammunition in
two pending advertiser cases. An attorney who brought suit last year
told Media Life that the cooking of books went back to 1995.
But what the ABC finding will mean for Newsday is less
clear. It has already admitted to cooking numbers in more recent
years, and as much as 100,000 on Sundays. It also claims it has gone
a long way in appeasing irate advertisers, with many now having
accepted payments over the hyped figures. It had set aside $90
million for those payments, and a spokesperson for the papers thinks that figure is
still sufficient to handle all claims. Says Stu Vincent, “It still
falls in that range.”
Of the some 40,000 owed rebates, Vincent says the paper has
now settled 25,000, including those with the paper’s top 10 advertisers,
and that he doesn’t see this new information changing any of that.
The ABC also released circulation figures yesterday for
the six-month period ended March 2004, which showed Newsday has
continued to lose circulation. Weekday circulation fell 2.9 percent
to 482,182, while Sundays declined 6.5 percent to 542,145.
This was not happy news for a paper that has already
gone through huge cutbacks in staffing. Newsday publisher Tim Knight
yesterday told employees in a memo: “The release of these reports
represents a major step forward for Newsday. It closes a difficult
period for us. We are now moving ahead with a new circulation
leadership team in place, new systems in the works and exciting
programs under way to build new readership.”
Another ABC report is expected out today for the
six-month period ending in September.
Vincent attributes the drop in circulation to a hold on
circulation-building promotions. But he says that the paper has
since launched two direct mail campaigns and a program wherein new
full price five-day-a-week subscribers can get a $100 gift card from
advertisers like Macy’s and PC Richards.
Vincent said the paper also now has spots running on the radio
throughout New York and Long Island, as well as promotions running
on Long Island’s TV channel 12.
The paper has also completed a major housecleaning of
its circulation management, including instituting tighter controls
and less reliance on third-party sales.
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March 15, 2005
©
2005
Media Life
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