Skip to comments.Belo Begins Refunding Advertisers Over Inflated Circulation Figures (Texas)
Posted on 09/10/2004 5:13:43 PM PDT by Indy Pendance
DALLAS (AP) - Belo Corp. has begun mailing or personally delivering 19,000 checks totaling $23 million to compensate advertisers at its flagship newspaper, The Dallas Morning News, for inflating circulation figures.
"The advertiser compensation plan recognizes the trust our advertisers have placed in The Morning News, and all of us should consider these payments to be an investment in Belo's future," Robert Decherd, chairman, president and chief executive, said in a letter to employees Thursday.
Decherd also said he was recommending that members of the management committee, including himself, receive no bonuses or salary increases in 2005. He did not offer a reason for the decision, and Belo did not immediately return a call Friday for comment.
Belo disclosed on Aug. 5 that the Morning News had overstated newspaper sales by 5 percent on Sundays and 1.5 percent for other days. The company said it would pay the $23 million to compensate advertisers who overpaid, as rates are typically based on circulation.
The Dallas-based media company said Aug. 16 that it would make the payments to advertisers who placed ads in the newspaper between Aug. 1, 2003, and July 31, 2004. The company also said it would incur $4 million in newsprint costs associated with credits that will be given to advertisers.
Decherd also said a law firm is conducting an independent investigation into the circulation practices.
At least five shareholder lawsuits have been filed on behalf of Belo shareholders because of the circulation overstatement.
Belo owns 19 television stations and five newspapers: the Denton (Texas) Record Chronicle, The Providence (R.I.) Journal, The Press-Enterprise in Riverside, Calif., and Spanish-language Al Dia in Dallas.
Belo shares fell 13 cents to close at $23.30 Friday on the New York Stock Exchange.