‘Newsday’ to Pay Back Advertisers

By: Jennifer Saba

Newsday’s incoming Publisher Timothy Knight has extended a salve to advertisers burned by the paper’s circulation misstatements. In a letter to advertisers released yesterday, Melville, N.Y.-based Newsday said it plans to reduce advertising rates for the next 16 months (starting Aug. 30) and pay rebates if circ falls below specific guarantees.

That guarantee, according to the letter, is 525,000 daily copies and 575,000 Sunday copies. An article in the newspaper today about the letter points out the new figures represent an even deeper reduction than Newsday’s admitted overstated numbers of 40,000 daily and 60,000 Sunday copies. The new bar represents about 54,700 daily and 96,800 Sunday fewer copies for the period ending September 2003, according to today’s article.

“Sources,” according to the article, “described the guarantee as a ‘safety-net,’ a floor designed to reassure advertisers and to allow them to move forward with planning for future advertising.”

Newsday representatives plan to meet with advertisers next week to decide on a case-by-case basis restitutions for those that advertised between 2001-2004, the years that Newsday suspects most of the circulation flap occurred. However, the investigation is still ongoing.

Newsday spokesman Stu Vincent wrote to E&P in an e-mail, ?We’ve offered an extraordinary solution to a unique situation at the newspaper — including a reliable minimum circulation base that advertisers can depend on through 2005. But these are confidential negotiations between Newsday and its advertisers, and it makes no sense for us to comment publicly about them.?

The Tribune Co. took a $35 million pre-tax charge, a reserve set aside to address advertisers’ concerns over Newsday and Hoy’s circ problems. That number can change as Tribune continues to investigate the situation.

Newsday reports that Hoy has similar plans in the works.

The 10 advertisers who have sued Newsday and Hoy have not been contacted about the negotiations because they no longer advertise in the paper, said attorney Louis Giaimo, who is representing the advertisers in the suit.

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