Trinity Mirror has reached a compromise with the Institute of
Practitioners in Advertising on the compensation to be paid to
advertisers resulting from the fraudulent reporting of circulation at
its Birmingham Post & Mail newspapers.
The newspapers are to reimburse advertisers at an average rate for the
six years of the overstatement. This rate will not be be disclosed until
a full agreement is reached.
However, Media Business has discovered that it will be less than the 17
per cent the IPA was originally seeking. There will also be a 10 per
cent rate discount this year and a rate freeze in 2001.
Trinity Mirror had already offered these last two deals but had wanted
to go to arbitration on the level of repayments. Both sides have
compromised to avoid the costs of court action. The total cost to
Trinity Mirror will be covered by the pounds 20 million it had set aside
to deal with the compensation issue.
Subject to the ironing out of a couple of small differences, the IPA
expects to be able to recommend the deal to its members this week.
Meanwhile, to re-establish its credibility and avoid a future Birmingham
debacle, the Audit Bureau of Circulations has set up a working party to
review its auditing and inspection process.
The newly formed working party will review the frequency of inspections
and the role of financial auditors such as PricewaterhouseCoopers, which
was criticised in the Birmingham case. It will particularly consider the
need for mandatory circulation audit training for accountants who work
on behalf of ABC.
The six-person working party is overseen by new ABC chairman John
It includes representatives from magazine, national and regional
newspaper publishing as well as senior media agency staff. Its members
are: MediaVest’s client services director Nigel Conway, Telegraph
circulation director Cliff Ewan, Marketforce managing director David
Stam, Newcastle Chronicle & Journal sales manager Roger Winfield and IPA
research director Lynne Robinson.