MINNEAPOLIS, June 28, 2005 (PRIMEZONE) -- Advertisers have commenced a lawsuit against the Star Tribune and its parent company, The McClatchy Co. (NYSE:MNI), alleging that the newspaper inflated its paid circulation rates, resulting in higher, unjustified advertising rates. The lawsuit was filed today in U.S. District Court for the District of Minnesota and seeks reimbursement for the overpayments during the past 6 years.
The advertisers allege that the Star Tribune manipulated its circulation volumes in order to drive up the advertising rates in several ways, including: 1) requiring distributors to deliver unsold papers to residential addresses, hospitals, apartment buildings, or shopping centers, despite the fact that none are paying subscribers; 2) requiring distributors to dump unsold newspapers; and 3) manipulating circulation reports to the Audit Bureau of Circulations (ABC), an organization that certifies a publisher's circulation volume upon which the publisher's advertising rate is based.
This is not the first time advertisers have challenged the print media for exaggerating its circulation rates to increase revenue. In 2004, four newspapers -- Newsday, Hoy, The Dallas Morning News, and the Chicago Sun - Times -- admitted that they had grossly overstated their circulation numbers to the detriment of advertising customers. Reportedly, the parent companies of these newspapers collectively set aside more than $130 million to reimburse advertisers who had paid inflated advertising rates due to their practices.
Attorney Clayton Halunen reported that newspapers reap substantial increased revenue by improperly inflating circulation rates, "This is like biting the hand that feeds you. Newspapers survive only because of people like my clients who spend thousands of dollars each year on advertising. All they ask for in return is to get what they pay for. Today, these advertisers showed their determination to be the driving force of change."
The Minneapolis law firms of Zimmerman Reed, PLLP, Halunen & Associates, and Saliterman & Siefferman represent the advertisers.
A copy of the Complaint is available at www.zimmreed.com.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca