|
|
Auditors: We'll
be cracking heads
ABC raps circ scamsters and imposes new rules
Stung by the recent newspaper scandals, the Audit Bureau of
Circulations is censuring the three papers involved -- Newsday, sister paper Hoy, and the
Chicago Sun-Times -- for scheming to inflate their circulations.
It's also imposing new reporting rules for newspapers and magazines to make it
tougher to pull one over on ABC auditors.
While the industry organization is loath to admit its old system was flawed, the
new rules succeed in pointing out the very weaknesses that enabled newspaper and magazine
executives to puff their circulation numbers with little fear of getting caught. That
system was built largely on trust, with little incentive for auditors to look beyond
statements unless there were egregious and apparent violations.
That was the case certainly at all three papers, where abuses went on for two
or more years, and all went undetected by the ABC. Newsday, for example, admitted pumping
its daily circulation by 7 percent and its Sunday circulation by nearly 10 percent. Those
abuses were first disclosed during a lawsuit by advertisers.
“In the current environment a few situations have popped up which
require increased accountability on the part of everyone in the media business,” ABC
spokeswoman Martha Dittmar tells Media Life.
“So the board of directors felt this was the appropriate time to up our
standards.”
It’s the first time in 20 years that ABC has publicly censured member
papers for falsifying circulation statements.
As part of the censure, the papers will face tougher and more frequent
audits. While the ABC generally audits statements once a year, the Sun-Times, Newsday and
Hoy will be audited every six months for the next two years.
ABC will also drop the newspapers’ circulation claims from its FAS-FAX
for one year. FAS-FAX is its semiannual circulation report for advertisers and buyers. In
place of their numbers will be a notation advising readers of the censure.
Further, the three papers are being required to submit to the ABC board of
directors a plan for correcting the circulation practices that led to the censure.
The ABC board yesterday also agreed on measures to toughen the audit process,
including harsher penalties for newspaper and magazines caught inflating their numbers.
The bureau will hire more auditors to verify newsstand sales in the field and
check more frequently with subscribers to verify individual subscriptions.
Additionally, according to the bureau’s new rules, censure penalties
will apply to any newspaper whose reported figures deviate at least 5 percent from
ABC’s audited numbers and to any magazine experiencing the same deviation over two
consecutive audits.
Such penalties will include more frequent audits (every six months rather
than once per year for a period of two years), exclusion from the FAS-FAX report for one
year, and public disclosure of the publication’s transgressions.
The ABC will also levy cash fines against publications found to have
submitted falsified circulation claims.
The board also voted to modify several ABC rules and record-keeping
requirements.
Publications were formerly allowed to omit 40 days of circulation numbers
affected by holidays and and an unlimited number of days where sales
were affected by production problems or "acts of God." The
total for both categories has been reduced
to just 10 days.
The bureau will also consider modifying its rules affecting barter
agreements, in which newspapers provide copies to businesses in exchange for goods or
services. |
July 13,
2004 © 2004 Media Life
|
|
  |
|
