The steady exposure of how Australia’s magazine and newspapers illegally inflate their audited circulation figures – and defraud advertisers in the process – continues at a pace. The editor of media industry magazine B&T, Danielle Veldre, has launched a scathing attack on circulation rorting practices which, she says, “are, and have been forever, the open secret of the publishing industry”. She writes:

A friend of mine who used to work at a magazine that doesn’t exist anymore used to marvel at its circulation figures, because only half that number was actually ever printed. Another friend at a publisher told me of meetings where ‘getting around the rules’ is openly and unapologetically discussed.

No amount of rule-tightening, auditing, self-examination and navel gazing is going to change practices which are, and have been forever, the open secret of the publishing industry.

Call me cynical, but I would suggest any publisher defending the current audit process and suggesting that it’s watertight and there’s no fudging of the figures is a convenient route for anyone wanting to deflect any attention away from themselves and their own practices.

A Crikey reader writes:

John B Fairfax, chairman of Rural Press and owner (among other papers) of the Canberra Times spoke on Thursday (5 May) at a Canberra Business Council business lunch.

He was asked about dodgy circulation figures. He claimed that the Canberra Times was now clean (of course!), but said that when Rural Press bought the CT (from Kerry Stokes in about 1998) it was surprised to find its published circulation figures were falsely inflated. He said that Rural Press got rid of the rorts and this accounted for declines in circulation at the time.

And from the US, where publishers last year refunded more than $200 million to advertisers after circulation rorting was exposed, come these two stories:

Shareholders have filed a federal class-action lawsuit against the Tribune Company and several of its officers, alleging circulation fraud that affected the company’s financial results. The lawsuit, filed in US District Court in Chicago, contends the Tribune violated the Securities and Exchange Act by intentionally overstating circulation of Newsday in New York and the Spanish-language newspaper Hoy. Read the report here.

A group of shareholders in the Belo Corp, which owns the Dallas Morning News, claim in a class-action suit that the newspaper has known for years that its circulation figures were overstated, but that top officials at Belo kept it quiet and only came clean when they felt in danger of being found out. The complaint includes statements by a newspaper distributor who is reported to have said that his superiors tried to force him and others to sign documents, during an audit, overstating the number of papers they sold. This distributor “had a dozen audiotapes he had made of conversations instructing him to lie on the audit,” according to the complaint. Read more here.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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