LONDON ? The Wall Street Journal says its publisher in Europe resigned after an internal investigation determined that he had tried to influence editorial content to favor a partner in a cut-price circulation deal.
The report on the newspaper's website Thursday appeared to differ from a statement by its owner, News Corp. subsidiary Dow Jones, which said Tuesday's resignation of publisher Andrew Langhoff was unrelated to a circulation deal with the Netherlands-based Executive Learning Partnerships, a business consulting firm.
There was no immediate explanation for the apparent discrepancy in the statements.
The Wall Street Journal is the U.S. crown jewel of the papers in Rupert Murdoch's global media empire, which has been badly shaken by a phone hacking and police bribery scandal in Britain that has forced some of his top executives to resign. Murdoch's News Corp. bought the Journal's owner Dow Jones & Co. in 2007 and has worked hard on increasing circulation.
At issue in the latest revelations is whether, in pursuit of higher circulation, the paper breached the journalistic wall between advertising content and editorial content.
Announcing Langhoff's departure on Tuesday, Dow Jones said its links to ELP "could give the impression that news coverage can be influenced by commercial relationships" and that Langhoff resigned because of a "perceived breach of editorial integrity" ? not because of circulation programs.
While The Wall Street Journal Europe apparently did not deceive advertisers about its circulation, those numbers rested on a foundation of cut-rate deals.
According to the Audit Bureau of Circulations report for the first half of this year, just under 14 percent of the daily circulation of Wall Street Journal Europe was sold at full price at newsstands or at the basic annual rate. Some 71 percent of the paper's circulation was sold at 5 percent of the cover price or less, including 26,000 bulk sales mostly to airlines, 13,000 by barter and 7,500 by controlled free circulation.
"Most savvy advertisers would not be deceived" by the newspaper's circulation figure of 74,800 per day, said Bill Nichols, senior lecturer in marketing and communications at Buckingham New University. "I think anybody on the media buying side would be aware that those figures are inflated."
The Journal, quoting what it called people familiar with the matter, said ELP paid 1 euro cent (1.3 U.S. cents) each for 12,000 copies of the paper daily. The paper retails for 1.50 pounds ($2.35, euro1.71) in Europe.
The Guardian, a U.K. newspaper that broke the story Wednesday, says in April last year, Dow Jones sweetened its deal with ELP by offering free ads and "a minimum of three special reports." The Wall Street Journal said stories linked to ELP were published in the European edition on Oct. 14, 2010 and March 14, 2011 as part of the deal.
The Journal confirmed that the promise of editorial content favorable to ELP was made last year when the two companies renegotiated their relationship. The arrangement with ELP, the paper said, was part of a broader program of hosting seminars and other events, and distributing copies of the paper in bulk to universities.
The Journal also said in 2010, Dow Jones arranged a a complex series of deals that channeled "thousands of euros" to ELP through third parties. Dow Jones said it has since ended those arrangements, which it described as legitimate but "admittedly complex." Those deals also hinted of a concerted effort to inflate circulation figures.
The Journal quoted its sources as saying those deals were arranged by Langhoff and a circulation department employee, Gert Van Mol. The Journal quoted Van Mol, whose job was eliminated earlier this year, as saying that he had prompted an internal whistleblowing investigation by filing a complaint about the ELP arrangement.
Dow Jones said the "whistleblower" had been "first investigated by the company because of concerns around his business dealings."
ELP is a business consulting agency that "empowers talent to act into the unknown," according to its website. It also has personnel ties to the paper ? Rien van Lent, an ELP partner, was publisher of The Wall Street Journal Europe from 2001 to 2006.
The reports this week add to the turmoil besetting Murdoch's media empire. In July, longtime Murdoch executive Les Hinton resigned as chief executive of Dow Jones and publisher of The Wall Street Journal.
Hinton was forced out because he was formerly chairman of News International, the U.K. unit of News Corp. that is embroiled in a U.K. telephone hacking scandal and is also suspected of bribing U.K. police officers.
Hinton has said he knew nothing about illegal activity at Murdoch's News of the World tabloid in Britain, which was under his watch. Murdoch shut down the 168-year-old paper this summer as the scandal grew.
In the United States, authorities are investigating whether those alleged police bribes violate the Foreign Corrupt Practices Act, which can result in hundreds of millions of dollars in fines even if the activity occurred abroad.
The controversy comes ahead of News Corp.'s annual shareholders meeting in Los Angeles on Oct. 21, where Murdoch, 80, could face shareholders with small stakes for the first time since the hacking scandal broke.
Despite calls this week for Murdoch to be voted out by a prominent shareholder advisory firm, Institutional Shareholder Services, he is likely to survive the criticism because he controls 40 percent of his company's voting shares, and with solid backers has a near majority.
On Wednesday, News Corp.'s widely traded Class A shares rose 28 cents, or 1.7 percent, to close at $17.09, buoyed in part by a $5 billion share buyback plan.
mixology sarah shourd sensa sister wives season 2 kerry collins kerry collins jermichael finley
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.