• by Michael Shields , June 20, 2004

Just one week after the nation's largest print advertiser admonished the magazine industry for failing to address concerns surrounding that medium's audience circulation audits, the newspaper industry is becoming caught up in a swirl of revelations surrounding discrepancies in the circulation of major papers. Last week three major dailies - Newsday, the Chicago Sun Times and Hoy - acknowledged serious errors in their circulation reports.

The Tribune Co. was the source of much of the lousy news. First, Long Island's Tribune-owned Newsday appeared to fess up to circulation misdeeds, announcing late Thursday that it would reduce its reported September 2003 publisher's statement of circulation of 579,729 daily and 671,819 Sunday by about 40,000 daily and by about 60,000 Sunday.

The Tribune's Hispanic newspaper, Hoy, which had been rapidly expanding during the past year, will also reduce its reported circulation during the same period of 92,604 daily and 33,198 on Sunday by approximately 15,000 and 4,000, respectively.

Both papers will make slight adjustments to their March 2004 circulation figures as well.

Earlier in the week, the Chicago Sun Times, the tabloid rival to the Tribune's Chicago Tribune, admitted that it had purposely overstated its circulation.

Both Newsday and Hoy had come under fire last February when four companies filed a lawsuit alleging that circulation figures were inflated to support higher advertising rates.

In the federal suit, three restaurants and a real estate firm claimed that the papers and their distributors conspired to misrepresent circulation to the Audit Bureau of Circulation. Employees at Newsday and Hoy were even accused of maintaining false computer files that altered circulation figures, and of throwing out bundles of papers without accounting for them.

According to a press release, "a Tribune Company audit determined that during portions of 2002 and 2003 some copies of Newsday that were distributed for free as part of a home delivery promotional campaign were improperly recorded as paid copies. In addition, some single copy sales could not be verified because of inadequate record-keeping by one of Newsday's outside distributors."

As a result of the audit, which they are working on with ABC, Newsday's vice president of circulation has been placed on administrative leave.

"We take these matters very seriously," said Newsday's publisher Raymond Jansen in the release. "Once these discrepancies were brought to our attention we moved quickly to correct the situation and are instituting new policies and procedures to prevent it from happening again."

While Newsday has taken steps to police itself, the Nassau District Attorney's office opened an investigation on Friday to determine whether criminal charges are warranted.

The admission by major newspapers that they have tinkered with circulation comes just after the magazine business has been taken to task by many for flaws in its circulation measurement, first brought to light during the very public divorce between Rosie O'Donnell and Gruner + Jahr over now defunct magazine. Last week during the Association of National Advertisers' Print Advertising Forum in New York, General Motors' top print media buying executive, Linda Thomas Brooks, said it would take years for the magazine industry to regain marketers' confidence in their circulation reports (MediaDailyNews June 11).