The circulation of the nation’s biggest selling tabloid, News Limited’s Herald Sun, is artificially inflated by up to 100,000 copies per day, according to the paper’s former editor-in-chief Bruce Guthrie.

In revelations contained in Guthrie’s bombshell tell-all Man Bites Murdoch, due for release later this week, the one-time News loyalist says that “between 50,000 and 100,000” copies of the daily paper are subsumed by educational and event sales.

Speculating about the current struggles at the paper, which has seen its circulation tumble 2.33% over the last 12 months to 503,500 copies, Guthrie says Herald Sun management would be working overtime to ensure the figure stayed above half a million:

“They would be reviewing partnership arrangements, chasing new ones, plotting even bigger give-aways — cold, hard cash might next — pumping as many papers as they could through school and university programs, cut-rate ways of boosting sales by tens of thousands of copies. Take them out and the Herald Sun would be selling anywhere from 50,000 to 100,000 fewer copies a day.”

Crikey understands that of the 100,000 copies cited by Guthrie, around 75% are educational sales that are bulk-delivered to high schools and university campuses under controversial subscriber schemes costing as little as $20 a year. However, a loophole in official Audit Bureau of Circulations guidelines means the cut-price deals are not broken out under net paid sales guidelines, leaving advertisers in the dark.

In the three months to June, the Herald Sun claimed just 0.26%, or an average of 1340 copies, as educational sales. About 0.21% of its Monday-Friday sales were allocated to events (under ABC guidelines, event sales are capped at 1% of total net paid sales). But Guthrie says the official figures are fiction and “largely a marketing and promotional construct”.

Guthrie also shines a light into the Herald Sun‘s “more than 70” corporate partnerships where editorial tie-ins are offered up in exchange for hundreds of thousands of dollars in advertising. “Perhaps 5,000” copies of the Herald Sun are then distributed at the associated event, Guthrie says.

“This becomes a valuable way to pump up circulation — the rules of the Audit Bureau of Circulation provide for the inclusion of event copies, within limits,” Guthrie writes.

A clause in the partnership contracts that provides for editorial independence is inevitably subsumed by commercial pressures. The resulting coverage that is “at least neutral, and often, shamelessly supportive,” Guthrie says.

The forty-year media veteran points to the Herald Sun‘s deal with the AFL, in which parent company HWT actually pays the league to publish its promotional material. In one celebrated instance, a 2007 page-one Sam Edmund splash alleging drug dealing at an AFL club pricked the radar of then HWT managing director Julian Clarke, who had apparently discussed the matter with league boss Andrew Demetriou.

Guthrie says Clarke told him that Demetriou had expressed reservations over the story because, according to Demetriou, Edmund was also the police informant. When Guthrie asked his managing director who had fingered Edmund, he named then-police chief Christine Nixon.

“What the hell was the police commissioner doing sharing details of a drug investigation with third parties outside the force?,” Guthrie writes, in just one example of the tight-knit power nexus that encompassed the AFL, Victoria Police and the Herald Sun during his time at the newspaper.

Herald Sun weekday editor Simon Pristel refuted the circulation allegations when contacted by Crikey this morning: “Considering how little interest Guthrie had in the circulation numbers during his tenure as editor, it’s not surprising that he is so far off the mark on this claim.” Pristel said the paper was fully compliant with ABC guidelines.

During Guthrie’s unfair dismissal case in May, HWT managing director and former editor-in-chief Peter Blunden made much of a February 2008 graphic that erroneously showed a red circulation arrow pointing upwards, when Monday to Friday circulation had in fact fallen. But those falls were much smaller than during Blunden’s reign, Guthrie says in his book.

The allegations come hot on the heels of Crikey‘s revelations that The Age was channelling over 40,000 copies of the daily paper through high schools and universities in 2007, according to a senior executive who is still with the company.

The strategy appears to have continued unabated, despite an ABC investigation and complaints that are likely to lead to a rule change at the regulator’s annual general meeting this month. In recent days, the University of Melbourne student union has offered students a yearly subscription to The Age for just $1 when renewing their membership for 2011.

Yesterday ABC chief Paul Dovas told ABC TV’s Inside Business program that allegations were still being investigated and defended his body: “So … in the case of what’s been reported lately, we still have an on-going investigation into some of the allegations, but our understanding of the practice, which has been in place for many years now, is that students are offered a subscription at a certain value. From that perspective, it qualifies as a sale.”

Meanwhile, one former editor of a major metropolitan broadsheet has told Crikey he was surprised to hear, during an early meeting with the circulation department, about the “Pier Method” of circulation growth. It was explained that this involved backing a truck up to the end of a pier and dumping newspapers off it. He never learned whether the method was actually employed.

Peter Fray

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