By: E&P Staff At least have a dozen newspaper companies -- along with the Audit Bureau of Circulations (ABC) -- have received letters from the Securities and Exchange Commission (SEC) seeking information about their circulation, The New York Times has learned. This apparently was sparked by the recent revelations about inflated sales at other chains.
Among the companies that have received SEC requests for documents over the last two months are Gannett, Knight Ridder, McClatchy, Dow Jones, The New York Times Company, and The Washington Post Company. The companies declined to comment yesterday, according to the Times, as did a spokesman for the SEC.
"One person involved in the inquiry emphasized that none of the companies contacted were considered to have done anything wrong or to be a target," the Times reported Wednesday. "Instead, the commission was seeking, at least initially, to mount a fact-finding effort on behalf of investors who use circulation figures as one measure of the relative health of publicly held newspaper companies."
The circulation scandal has been limited so far to Tribune, Belo, and Hollinger.
"We received under confidential terms from the S.E.C. a letter saying the S.E.C. was reviewing industry practices on circulation,'" one newspaper executive, who insisted on anonymity, told the Times. "We think others received that letter. It stated very clearly we were not a target and was not intended to suggest any wrongdoing. At the same time, it is confidential."
According to the Times, the SEC's scrutiny "has the potential to undermine further the confidence of advertisers and investors, who have driven down the stock prices of several newspaper companies in recent months. But should the commission's inquiry find that the practices of Newsday, Hoy, The Sun-Times and The Morning News were anomalies, the industry might be able to put the circulation scandal behind it."
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