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SEC Examines Papers' Circulation

Federal regulators are looking into reporting practices after scandals at major publishers such as Tribune and Belo.

October 14, 2004|From Reuters

Federal regulators are examining circulation reporting practices throughout the newspaper industry after a string of scandals at major publishers, several companies said Wednesday.

New York Times Co., Dow Jones & Co. and Knight Ridder Inc. confirmed the inquiry by the Securities and Exchange Commission.

None of these companies has been linked to any of the recent circulation scandals that have hit the industry.

The Audit Bureau of Circulations, which audits circulation data for newspapers and magazines, also confirmed that it had been contacted by the SEC but had no further comment, said spokeswoman Heidi Chen.

In recent months, three major publishers -- Tribune Co., publisher of the Los Angeles Times, Hollinger International Inc. and Belo Corp. -- have revealed circulation misstatements at some of their papers.

The companies have set aside millions of dollars to compensate advertisers, whose rates are closely tied to circulation levels.

The inquiry was first reported by the New York Times, which quoted unnamed people involved in the inquiry as saying that in the last two months, the SEC has requested documents from Dow Jones, Gannett Co., Knight Ridder, McClatchy Co., New York Times and Washington Post Co.

A person involved in the inquiry told the newspaper that none of the companies contacted was considered to have done anything wrong, and that the SEC was involved in fact-finding, which would help investors who use circulation figures as a measure of the companies' health.

In June, Tribune disclosed circulation problems at its Long Island, N.Y.-based Newsday and Spanish-language Hoy, while Hollinger International found circulation problems at its Chicago Sun-Times and several smaller papers. Belo said in August that readership data had been inflated at its Dallas Morning News.

The SEC declined to comment.

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