Belo Corp., publisher of the Dallas Morning News and the Providence Journal, said it will
pay $23 million to advertisers for overstating circulation and $3
million more to investigate the errors.
Belo will give cash, credits and free ad space for
circulation misstatements at the Morning News, the company said
in a statement. The newspaper’s reported circulation will have a
5 percent decline daily and an 11.5 percent decline Sunday for
the six months ended Sept. 30, in part because of the mistakes.
“This does a good job of dealing with past problems, but
the future impact on advertising revenue is an open question,”
said George Smith, an analyst at Davenport & Co. in Richmond,
Va., who rates Dallas-based Belo shares. By admitting it has fewer readers, Belo, which also owns 19 television stations may have a “modest”’ decline in future advertising, he said.
Advertisers will receive a cash payment equal to 10 percent
of their total Sunday advertising expenditures from Aug. 1, 2003
through July 31, 2004, Belo said. Advertisers will receive a
credit for future ad purchases equal in value to five percent of
their total ad expenditures for the same period.
Bloomberg News
