Bloomberg News

Tribune to Pay $15 Million to Settle Newsday Probe

December 18, 2007

Dec. 18 (Bloomberg) -- Tribune Co., the publisher being bought by a group led by billionaire Sam Zell, agreed to pay $15 million to settle a New York investigation of overstated circulation figures at Newsday and Spanish-language daily Hoy.

The Tribune newspapers admitted inflating circulation numbers between 2001 and 2004, according to Benton Campbell, the U.S. Attorney for the Eastern District of New York. Newsday admitted that senior managers coached distributors to lie before circulation audits were conducted, Campbell said today in a statement.

Newsday, based in Long Island, New York, fired all employees involved in the misstatements and installed a new circulation- data management system, the newspaper said today in a statement. It also set aside $90 million for restitution payments to affected advertisers as part of the settlement.

``When these issues came to light in 2004, Tribune, Newsday and Hoy took full responsibility and swift action,'' Newsday Publisher Timothy Knight said in the statement.

Tribune, based in Chicago, gained $1.02, or 3.2 percent, to $33.31 at 4 p.m. in New York Stock Exchange composite trading.

To contact the reporter on this story: Joe Schneider in Toronto at jschneider5@bloomberg.net.

To contact the reporter on this story: Meg Tirrell in New York at mtirrell@bloomberg.net.


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