Belo begins refunding advertisers over inflated circulation figures

DALLAS (AP) - Belo Corp. has begun distributing 19,000 checks totaling $23 million to compensate advertisers at The Dallas Morning News for inflating circulation figures. 

"The advertiser compensation plan recognizes the trust our advertisers have placed in The Morning News, and all of us should consider these payments to be an investment in Belo's future," Robert Decherd, chairman, president and chief executive, said Sept. 9 in a letter to employees. 

Decherd also said he was recommending that members of the management committee, including himself, receive no bonuses or salary increases in 2005 because of persistent economic weakness in many markets. 

Belo disclosed on Aug. 5 that the newspaper had overstated newspaper sales by 5 percent on Sundays and 1.5 percent for other days. The company said it would pay the $23 million to compensate advertisers who overpaid, as rates are typically based on circulation. 

The Dallas-based media company said Aug. 16 it would make the payments to advertisers who placed ads in the newspaper between Aug. 1, 2003, and July 31, 2004. The company also said it would incur $4 million in newsprint costs associated with credits that will be given to advertisers. 

Decherd also said a law firm is conducting an independent investigation into the circulation practices. 

At least five lawsuits have been filed on behalf of Belo shareholders because of the circulation overstatement. 

Belo owns 19 television stations and four other newspapers: the Denton (Texas) Record Chronicle, The Providence (R.I.) Journal, The Press-Enterprise in Riverside, Calif., and Spanish-language Al Dia in Dallas.