USA: audit finds more circulation errors in two Tribune newspapers

Posted by Bertrand Pecquerie on July 16, 2004 at 5:07 PM

According to Chicago Tribune, "Tribune Co. said Thursday that it uncovered more circulation misstatements at its two New York newspapers and set aside $35 million to compensate advertisers who were overcharged. The revelations came as the Chicago-based publisher and broadcaster reported its second-quarter earnings, which plunged 58 percent from the year-earlier period. The decline was driven largely by charges for the circulation problems and for layoffs forced by lower-than-expected advertising revenue. In a conference call, Tribune said it had launched a number of steps to correct the inflated 2003 and 2004 circulation figures, disclosed last month at Newsday on New York's Long Island and at the New York edition of Hoy, a Spanish-language paper. But the company also said it found new circulation misstatements at the papers in those years, as well as in 2001 and 2002.

To compensate Newsday and Hoy advertisers, Tribune said it had taken the pretax charge of $35 million, or 6 cents per share. But it warned that it might not be enough. "The company will continue to evaluate the adequacy of this $35 million reserve on an ongoing basis, as the audits are completed, and negotiations with advertisers proceed," Tribune said in a written statement.

Dennis Fitzsimons, the company's chairman, president and chief executive, called the circulation problems ethical lapses that were "unacceptable and wholly out of character" for Tribune.

Last month, Tribune said it would eliminate about 200 jobs across the company because of weaker-than-expected advertising revenue. At the time, the company also reduced its 2004 revenue growth projection, to 4 percent from 6 percent.

Source: Chicago Tribune. See also Newsday

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