Hollinger Takes $27m Charge for New Circulation Stings

07 October 2004

The problems at Hollinger International [H-Intl] are not confined to the alleged misdeeds of former chairman/ceo Lord Conrad Black.

The newspaper publisher's audit committee revealed Tuesday it had uncovered further circulation overstatements beyond those already disclosed at the Chicago Sun-Times.

Over-creative sales practises have been identified at the Jerusalem Post plus two suburban Chicago newspapers, the Daily Southtown and The Star – which in each case were used by advertising sales executives to justify ad rates.

Hollinger said it plans to make restitution to all advertisers affected and intends to take a charge of $27 million (€21.9m; £15.14m) to cover these unforeseen costs.

The company also revealed that circulation inflation at the Sun-Times had been endemic for years, employing such scams as manipulating the counting of unsold newspapers and by using paper recycling proceeds to buy newspapers.

Data sourced from Wall Street Journal Online; additional content by WARC staff