Lengthy ‘Newsday’ Report Details ‘Rogue’ Circ Operation

By: Jennifer Saba

In an unusually frank self-appraisal, Newsday today released a staff-written internal investigation on its own circulation scandal.

This is not the first article to appear about the circulation flap in Newsday (Click for QuikCap); the paper has been covering the story since it first broke in mid-June. However, the roughly 3,600-word feature that runs on page A2 and A3 today goes into great detail on how executives and distributors worked together to inflate numbers from as far back as the late 1990s — due to intense pressure to hit impossible numbers.

Publisher Raymond Jansen told staff reporters, “There was a rogue operation, and a violation of trust … To figure this out we have more than a platoon of auditors … I feel totally sick.”

What the Newsday team found is that manipulation covered newsstand as well as home delivery sales and involved “aggressive exploitation of industry rules to outright fabrication.” The elaborate deception even included counting people who died or moved away as subscribers.

Newsday and Hoy, the Tribune Co.’s Spanish-language newspaper in New York, have admitted to pumping up the numbers since as early as 2001. Though the internal investigation continues, Newsday and Hoy increased daily circ by 40,000 and 15,000 copies respectively and Sunday circ by 60,000 and 4,000 copies respectively for the entire year ending September 2003. During last week’s second-quarter earnings call, Tribune executives also announced that circ had been misstated by those numbers for the six-month period ending March 2004.

The article uncovers many methods used to puff up the numbers including one program tagged “Code 51.” The program essentially force-fed subscribers that had stopped taking the paper and then billed them for it. Even if people refused to pay, Newsday would continue to deliver copies. Executives made sure to spread the practice around so agents wouldn’t be “overburdened fronting the weekly cost of the papers.” Many times they were compensated with a credit, according to the story.

Agents finally stopped the aggressive behavior after one former employee told Newsday, “People would come out of their houses saying ‘I don’t want it! Stop it!'”

The article also describes how dealers were strong-armed into carrying Hoy and Newsday’s early Sunday edition. If they refused, executives would say they wouldn’t get Newsday at all. The story quotes one former Newsday employee who said that he kept getting complaints from dealers, especially in Queens with Hoy. “I don’t want Hoy. We don’t want Hoy. And then all of the sudden they take it. And then you look at the bill and say what the … is the $150 credit for?”

As of now, only Robert Brennan, Newsday’s vice president of circulation, has been put on administrative leave. Publisher Jansen, who describes his management style as “hands-off,” told the paper that he didn’t think that others should be punished.

The paper also noted that aside from Jansen, “Newsday and Tribune [Co.] have turned down repeated requests for interviews with executives and managers, including Brennan and Louis Sito, now vice president of Hispanic Media for the Tribune Co. and the publisher of Hoy. Nor have the companies responded to the reporters’ request for a detailed explanation of how the circulation numbers were inflated.”

Stu Vincent, spokesperson for Newsday, told E&P, ?We?re treating this story like any other story.? He also added that Newsday reporters have the same access to executives as other reporters would at other publications.

Tribune Co. Vice President of Communications Gary Weitman said, “We’re unable to say anything more until the investigation is complete.”

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