CIRC SAGA: Newsday and Spanish-language newspaper Hoy have agreed to forfeit $15 million to the U.S. government as part of an agreement to resolve a criminal investigation into fraudulent circulation reporting practices by the newspapers. To date, the two publications have already paid $83 million in restitution to their advertisers and cooperated with the investigation, among other things, so the government has agreed not to prosecute further. The agreement comes more than two years after the circulation scandal saw its first three arrests on charges that included paying employees to buy copies of Newsday from a street vendor that was monitored by the Audit Bureau of Circulations.
Formally, as part of the settlement, the newspapers admitted that between 2001 and 2004, employees inflated paid circulation numbers and underreported the number of copies of papers that were returned unsold. Also, Newsday acknowledged that senior managers coached distributors in advance of ABC audits to lie when questioned by auditors. It was also confirmed that Newsday employees, posing as customers, were sent to purchase newspapers at sales outlets across Long Island.
This story first appeared in the December 19, 2007 issue of WWD. Subscribe Today.
A spokesman for the U.S. Attorney’s Office for the Eastern District of New York said that nine persons have pleaded guilty, and seven will be sentenced on Thursday.
The issue drew the government’s attention to circulation practices in the broader publishing industry. The spokesman declined to provide more details on the Newsday and Hoy case, or whether the government continues to actively eye other potential circulation-related cases. Newsday and Hoy are subsidiaries of the Tribune Co. — Amy Wicks
FOOD GROUP: The publisher shuffle in the epicurean category seems to have settled for now, with the appointment at Martha Stewart Living Omnimedia of Amy Wilkins as publisher of Everyday Food magazine. That magazine had lost publisher Anne Balaban to Everyday With Rachael Ray, whose publisher, Christine Guilfoyle, had decamped for WWD in the fall. The digest-sized Everyday Food posted a 16.5 percent ad page growth this year over 2006, and it will raise its rate base to 900,000 next month. Although the position has been open for about six weeks, MSLO didn’t look very far for the pick: Wilkins is already the publisher of Martha Stewart Weddings, and she now has a bit more time on her hands, since the company closed her other responsibility, the younger lifestyle book Blueprint, last week. Curiously, the 500 words of the press release included no mention of Blueprint. — Irin Carmon
3RD DATE: Nicole Miller’s new ad campaign for her 3rd Date Collection of lingerie gives lingerie advertising a different spin: a sexy-looking bra brandished with one of her cocktail dresses. Styled by Miller, the campaign appears in the January issue of Elle. “Right now is the hottest time for lingerie at stores through Valentine’s Day,” said Bud Konheim, chief executive officer of Nicole Miller Ltd. “Nicole took over the styling because everybody else, top stylists and ad firms, came up with something that was either raunchy or didn’t make sense. What she and Gilles Bensimon came up with was a young woman in her office holding a 3rd Date bra and wearing a Nicole Miller dress. A sign on her computer tells it all — ‘7:00 Dinner!'” — Karyn Monget