2 Papers Correct Reader Totals

Tribune Co.'s Newsday, Spanish-Language Hoy Add to Industry's Woes

Tribune Co., which operates the nation's second-largest newspaper chain, said yesterday that circulation figures for two of its properties -- Newsday and the Spanish-language Hoy -- had been improperly inflated in 2003 and early 2004.

It is the second time in a week that a major daily has admitted its circulation were false. On Tuesday, the Chicago Sun-Times said it had been pumping up its circulation figures "for years," but did not say by how much.

The reports were the latest to suggest that while the industry has been recovering from the bust of 2001, the worst year in advertising in 50 years, publicly traded newspaper chains are under more pressure to perform than ever before. The companies have responded to investor pressure by raising ad rates, cutting newsprint consumption and trying to squeeze out other savings.

Before the circulation announcement yesterday, Tribune was in the process of paring about 200 jobs across its 14-newspaper chain, through buyouts or, if that doesn't work, layoffs. The cuts may hit hardest at the Los Angeles Times, which in April won five Pulitzer Prizes. The chain says it overestimated how much ad revenue it would collect in coming months.

This week, a continuing dispute between reporters at the Wall Street Journal and parent company Dow Jones & Co. -- which says it has not regained enough of its core technology and financial services advertising to offer the kind of contract its employees want -- led many writers to withhold their bylines from Journal articles for two days.

Newsday, based on Long Island, N.Y. was sued in February by four advertisers who accused the paper of inflating circulation to justify higher ad rates. Yesterday, Newsday, which is also under investigation by the Securities and Exchange Commission over its circulation numbers, acknowledged that it sold 7 percent fewer daily papers than the 579,729 it reported to auditors last year, and 9 percent fewer than Sunday's reported circulation of 671,819.

Inflation was higher at Hoy, which overstated its daily circulation figure, 92,604, by 16 percent, Tribune said, and its Sunday figure, 33,198, by 12 percent. At the time, Hoy was published only in New York. Since then, it has added editions in Chicago and Los Angeles.

"We will be taking action to discipline anyone who acted improperly and are instituting new safeguards within the circulation departments of Newsday and Hoy," Jack Fuller, president of Tribune Publishing, said in a written statement. He blamed the overstatement on record-keeping errors. Newsday's vice president of circulation, Robert Brennan, has been put on administrative leave, according to the paper's Web site.

"The internal investigation will continue until we are satisfied that our circulation practices are above reproach," Fuller said.

The circulation scandals in New York and Chicago may trigger a potentially crippling chain reaction of advertisers demanding refunds or suing to get them, one newspaper analyst said. Not to mention a wave of scrupulous circulation-checking at the nation's other papers.