August 06, 2004
Morning News overstates circulation


An internal investigation by Belo Corp. has uncovered practices and procedures that led to an overstatement of circulation at the media company's flagship newspaper, The Dallas Morning News.

Dallas-based Belo said Thursday that the overstatement will cause an estimated decline in circulation of about 1.5 percent daily and 5 percent on Sunday.

Belo said the largest part of the overstatement found late in July appears to be due to a change made in early 1999 in unsold newspaper returns. The company said those figures rely on reports by contractors that are verified by circulation managers. The company said a circulation sales reward program also resulted in overstatements. That program was discontinued in the first quarter of 2004.

Belo said the investigation is ongoing.

Robert W. Decherd, Belo's chairman, president and chief executive officer, said, "The Dallas Morning News circulation practices must be completely consistent with Belo's uncompromising standards. The Morning News will voluntarily provide fair compensation to its advertisers given the circulation overstatement. We believe the revised circulation figures to be submitted to ABC are a reliable baseline for future Morning News circulation."

ABC refers to the Audit Bureau of Circulation, an organization that monitors newspaper circulation.

A media company's circulation figures are important in the setting of rates for advertisers.

In the wake of the disclosures, Belo said a compensation plan for advertisers will be communicated to them within seven business days. Belo said that at that time the company will disclose the impact on net earnings and net earnings per share in the third quarter of 2004.

As noted by the Chron, this restatement puts the Chron ahead of the DMN for Sunday circulation; the Chron already led in the dailies.

Posted by Charles Kuffner on August 06, 2004 to Bidness | TrackBack

This ABC problem has also hit Newsday hard here in NYC. They started a Spanish newspaper called Hoy, and claimed circulation far above actual sales. Since this has been exposed, multiple car advertisers are suing the newspaper (which has by far the largest number of automobile advertisements per week in NYC), two of the editors have resigned, and this is being portrayed in the other NYC tabloids as the biggest scandal of the last 50 years.

Posted by: William Hughes on August 6, 2004 9:10 AM

Awfully cheeky of the Chron to print that, since their circulation practices are creative at best.

Posted by: kevin whited on August 6, 2004 9:47 AM