The Dallas Morning News overstated circulation for its daily and Sunday editions, and its top circulation executive has resigned, the paper's parent company said Thursday.
Belo Corp. said the newspaper overstated its daily circulation by 1.5 percent and Sunday circulation by 5 percent, mostly due to a 1999 change in the way the paper counted unsold, returned copies.
The Morning News reported a circulation of 528,379 Monday through Saturday and 755,912 on Sunday for the six months ended March 31, according to the Audit Bureau of Circulations.
Belo said the overstatement, combined with other declines in circulation, would lead the Morning News to report an overall decline of 5 percent in daily circulation and 11.5 percent on Sundays for the six-month period ended Sept. 30, compared with a year earlier.
The Dallas company said an internal investigation was continuing. Belo did not name the executive who resigned.
Belo said it would compensate advertisers who overpaid and would provide them with details within seven business days. Advertising rates are generally set according to circulation.
Chairman and chief executive Robert W. Decherd said he had instructed the company's senior management to review the circulation practices at four Belo newspapers in June.
Belo said executives did not think there were significant problems at the company's other papers -- the Denton (Tex.) Record-Chronicle, the Providence (R.I.) Journal and the Press-Enterprise in Riverside, Calif.
When questionable circulation practices at the Morning News were reported last week, he said, the company hired a law firm to conduct a stepped-up investigation.
The company said that partly due to sales rewards programs, the overstatement of circulation grew worse over time. The rewards programs were stopped early this year, the company said.
Belo, which also owns 19 television stations and the Spanish-language Al Dia in Dallas, said executives would discuss the issue with investors in a conference call today.
The Morning News is the latest of several newspapers that recently have admitted overstating circulation figures.
Last month, the Chicago Sun-Times reduced its single-copy circulation figures by 23 percent after the paper's parent announced it had inflated the numbers for several years. Tribune Co., of Chicago, said circulation figures had been inflated at Newsday, its New York tabloid, and Hoy, a Spanish-language daily in New York.
In trading before news of the restatement, Belo shares fell 34 cents, or 1.4 percent, to close at $23.21 on the New York Stock Exchange.