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Inflated Circulation Totals

Newspapers Padded Sales Figures to Keep Ad Rates High

By Frank Ahrens
Washington Post Staff Writer
Tuesday, November 30, 2004; Page E01

The trouble started in 1998, when the Chicago Sun-Times broke ground on a new printing press on the south side of Chicago. The start-up process was a "nightmare," the publisher said. The press malfunctioned, causing the paper to hit the streets late and leading to mass subscription cancellations.

Then came the dot-com bust, sapping away the paper's classified employment advertising revenue. Then came the Sept. 11, 2001-fueled recession, causing what he described as a "horrendous drop" in ad dollars.

Tribune Co. found circulation errors in its two New York area newspapers, Newsday and Spanish-language Hoy. (Jennifer S. Altman -- Bloomberg News)

Fewer Read All About It U.S. newspapers have been losing readers for nearly two decades. Morning newspapers absorbed some of the readers of dying evening papers, but daily circulation as a percentage of total adult population is down dramatically.
Bad News A Chicago Sun-Times internal investigation revealed that the paper had been inflating its circulation figures for years before it was discovered late last year. A look at the paper's claimed Monday-Friday circulation and how many of those copies were fictional sales, as reported in April of each year.

That's when the cheating began in earnest.

Because circulation is counted by subtracting the number of unsold papers from the number of printed papers, the Sun-Times paid its distributors to not return unsold papers, artificially inflating circulation, an internal investigation revealed.

The higher the numbers, the more the paper could charge for advertising. When the paper received money for contributing to newspaper recycling programs, it deposited the funds in a charitable trust used to buy copies of the Sun-Times to distribute in schools, effectively paying itself to buy its own papers, which the paper said it counted as circulation.

At the height of the scandal, the paper was inflating its daily circulation figures by more than 10 percent, counting 50,000 nonexistent buyers in its claimed circulation of 482,000, the company acknowledged. The cheating took on the nature of an addiction, said Sun-Times publisher John Cruickshank, a former editor elevated to publisher after the scandal became public in November 2003 and former publisher F. David Radler resigned.

"Our appetite for fake numbers became greater and greater," Cruickshank said.

Circulation scandals have hit two other major newspapers over the past year -- the Dallas Morning News, owned by Belo Corp., and Tribune Co.'s Newsday. (Newsday's much-smaller sister Spanish-language paper, Hoy, also inflated its circulation figures, Tribune admitted.)

The troubles come as U.S. newspapers have been steadily losing circulation since 1987, the last year that nationwide average circulation increased, according to the Newspaper Association of America, the industry trade group. Chief among the causes are changing lifestyles -- people have less time to read a paper every day -- and the rise of other sources of news and information, such as cable television news channels.

For some papers, the long declines have made it harder and harder to keep up the illusion of circulation success. In the case of the Sun-Times, disclosure of the problems coincided with the shake-up of corporate parent Hollinger International Inc., where controlling shareholder Conrad M. Black (and Radler, also Hollinger's former president) have been charged with fraud by the Securities and Exchange Commission for allegedly misappropriating company funds. Black and Radler have denied any wrongdoing.

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