Advertiser alleges local daily misrepresented circulation of its free Spanish weekly Espejo

Gannett Satellite Information Network, Inc., doing business as the Rockford Register Star, filed an arbitration complaint in March against an advertiser who they say breached his contract to advertise in Espejo, a free Spanish weekly published by the local daily.

The plaintiff seeks $10,534.93, plus interest and legal costs.

The advertiser, however, argues he had a good reason not to honor the contract. He has filed a counter-claim, alleging Espejo’s circulation numbers, as presented by the local daily, were inflated.

Newspaper advertising rates are based on circulation.

In August 2006, Larry Goldstein, owner of Largo Automotive in Belvidere, entered into a 52-week deal to publish his full-page used car ads in the Spanish weekly at the rate of $400.02 per week.

Goldstein’s answer to the initial complaint argued: “The Defendant stopped advertising with the Plaintiff based on the Plaintiff misrepresenting the circulation figures AND the content of the publications that the Defendant had contracted to advertise in.”

A Register Star ad rate card for Espejo, an exhibit in the case, states 15,000 copies of the weekly publication are dropped at more than 450 spots throughout Boone, DeKalb, Lee, McHenry, Ogle, Whiteside and Winnebago counties each week.

Espejo’s interior staff and circulation box cited the same circulation number and 480 distribution points as recently as the Aug. 23-29 issue; however, that information was excluded from the Sept. 6-12 issue. The June 14-20 issue of Espejo said it had “more than 500” distribution points. On the back page of Espejo’s Oct. 4-10 issue, a listing was presented of some “algunos” of the businesses where readers may pick up a copy of Espejo every Thursday, numbering 177 locations. Readers were directed to go to the online version of Espejo for a complete listing of distribution points. When The Rock River Times attempted to do so Oct. 9, clicking on “Advertising Info,” the following message appeared: “Page Not Found – Error 404. We’re sorry, but we can’t seem to find the page you’re looking for.”

Rockford Register Star President and Publisher Fritz Jacobi said Espejo is distributed at 508 locations in seven counties.

Goldstein isn’t so sure the rate card claims about circulation and distribution can be backed up. His September motion for leave to file the counter-claim indicates the plaintiff’s response to discovery includes “admission that there are no reports, documents or other records supporting the circulation of these publications consistent with the solicitation statements.”

Although Espejo has not been independently audited, Jacobi stands by the claim 15,000 copies of the Spanish language paper are produced.

“We track the circulation of Espejo each week,” Jacobi reported. “The circulation is tracked not only in total, but by location, showing gross distribution and pick-up rate.”

Because Espejo is a weekly publication, Jacobi stated, it has not been audited by the Audit Bureau of Circulations (ABC).

GateHouse Media, Inc., the local daily’s new owner, has since assumed Gannett’s role in the proceedings.

According to the ABC’s most recent audit, the local daily’s average circulation is 58,588. The 12-month study was completed in March. GateHouse announced its purchase of the Register Star in April.

Neal Lulofs, the ABC’s senior vice president of Communications & Strategic Planning, indicated no audit of Espejo had been conducted by his organization.

An arbitration hearing is set for Oct. 17. If no settlement can be reached, the matter is expected to go to trial.

Goldstein’s attorney, James C. Thompson, could not be reached for comment in time for publication.

In 2003, the Chicago Sun-Times admitted its reported circulation numbers had been “significantly overstated” over a number of years—a violation of the Illinois Consumer Fraud and Deceptive Trade Practices Act.

Class-action suits were subsequently filed by allegedly overcharged advertisers against the paper’s owner, Hollinger International, Inc. Hollinger agreed to a $20 million settlement with the advertisers.

In response to misrepresenting circulation, the ABC censured the Sun-Times in 2004.

from the Oct. 10, 2007, issue

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