Inadequate Tribune Report on Circulation

In its Third Quarter report to stockholders, the Tribune Co. gives a truncated explanation of circulation declines at its various newspapers without listing just what the new circulation figures are, nor making any commitment to expending enough time and money to reverse the trend.

The report declares:

"Internal audits at our major newspapers are largely complete and we have detected no evidence of circulation misstatements like those at Newsday. While these results are preliminary until verified by the Audit Bureau of Circulations, they confirm our belief that the unethjcal actions in New York were isolated incidents.

"Nevertheless, as outlined in our second quarter report, we've significantly tightened our circulation procedures across the publishing group. In the third quarter we took additional steps. We standardized circulation policies at all newspapers, increased the role and responsibility of our finance department in circulation activities, and further tightened controls over third-party sponsored home delivery programs.

"Our tighter policies were partly responsible for the declines in circulation reported by the Chicago Tribune and Los Angeles Times for the six-month period ending Sept. 30, 2004. We are being conservative in our reporting. In Los Angeles, for example, we cut back on less profitable circulation such as third-party sponsored home delivery and single copy bulk sales. This reduces total circulation but improves the quality of our audience, which is very important to advertisers.

"As we anticipated, the nationwide implementation of Do Not Call (DNC) legislation has affected the telesales operations of our newspapers--another factor in circulation declines. To offset DNC, we've invested heavily in database marketing systems to improve our ability to grow readership and target high-quality circulation through direct mail and other methods."

This is the latest of various excuses given by management for the precipitate decline in circulation at The Los Angeles Times, now exceeding 200,000 daily since the Tribune bought the paper. Going unmentioned are the thousands of subscribers who have stopped taking the paper because they are offended by the leftward drift of its editorial pages.

To be fair, even Mark Willes--who had once announced an unrealistic goal of 2 million daily circulation for The Times--acknowledged during his tenure that it was proving to be a struggle just to keep Times circulation fairly even. He said he had been shocked, for example, to find out how many readers cancelled their papers when they went on vacation and then didn't renew when they got back.

But as soon as the Tribune took over, there was evidence that the new company was more than ready to see circulation decline.
The key moment, in my view, came when daily circulation was allowed to slip below a million. This was a psychologically important moment, and publisher John Puerner's reaction was not reassuring. He launched no effort to speak of to reverse the decline, and since then Times daily circulation has continued to slip, the latest figure being 902,000.

Falling circulation and falling advertising will surely be accompanied by further cutbacks in The Times, such as the closing of the National Edition and the cutting back of sports which has already occurred.
The statements about higher quality circulation are the same kind of excuse given by Life magazine just before it ceased regular circulation years ago. (It has since been revived in much shortened form).

The Times is not going to go out of business, but unless more vigorous owners take over, I fear the circulation decline will only continue, and the quality of the paper will inevitably slip.