The audit of all Media24 titles found two more Media24 magazine, !_LT_EMFinweek!_LT_/EM and !_LT_EMBestLife!_LT_/EM, had overstated their circulation figures.
These discrepancies do, however, not justify these titles’ suspension from the ABC, said Charles Beiles, general manager of the ABC.
The ABC this afternoon (Friday, 8 February) released a three-part statement on an audit of all Media24 magazine titles, covering the period July 2005 to June 2007. The audit was ordered last year by the ABC after discrepancies in the circulation figures of seven magazine titles had been found.
A forensic audit commissioned by Media24 has since discovered that 12 magazines (including the seven mentioned previously) had inflated their circulation figures. These are: True Love, True Love Babe, True Love Bride, Lééf, Fairlady, SARIE, InStyle and Touchline’s Men’s Health, Sports Illustrated, Kick Off, Shape and The Wisden Cricketer.
InStyle and The Wisden Cricketer has since been closed.
The ABC audit has now found that two more titles had overstated their circulation figures. These are Finweek and BestLife.
!_LT_EMBestLife!_LT_/EM had overstated its circulation by 5,000 in January to March 2007.
Finweek had overstated its circulation by 2,810 in the quarter January to March 2006 and by 3,439 in January to March 2007. The total reported circulation for these quarters were 29,003 and 34,374 respectively.
!_LT_EMFinweek!_LT_/EM said in a statement it “strongly disagrees” with the ABC regarding these two instances. Rikus Delport, general manager of Fin24, said the transaction in question was approved by a member of the ABC staff. “There is no question of dishonesty or fraud.”
Delport said !_LT_EMFinweek !_LT_/EMand the ABC were in dispute about the validity of circulation figures resulting from inter-group transactions – an issue Beiles was “at this point” not prepared to elaborate on. He would only say it had to do with “a deal between Media24 and Touchline”.
!_LT_STRONGReinstated!_LT_/STRONG
According to the ABC statement, the Media24 titles which were suspended last year after it had been discovered that their circulation figures had been fraudulently inflated, would be reinstated from 1 January 2008.
“The board of the ABC has censured Media24 for these fraudulent activities and is of the view that circulations were deliberately manipulated.
“The audit of all Media24 titles has revealed that there are a number of other transactions which have not been correctly reported. In particular, those involve inter-group transactions which, inter alia, have breached the Code of Conduct of the ABC.
“This conduct is disapproved by the board which requires that the circulation of these titles covering the period January 2006 to March 2007 be invalidated or re-classified,” the statement reads.
Beiles said no new titles would be suspended, following the outcome of the audit of all Media24 magazines.
He said the new discrepancies which had come to light were “not of the same nature” as the fraudulent transactions which had led to the earlier suspension of 12 Media24 titles.
He said it was “extremely difficult” to say whether the new discrepancies were the result of deliberate actions.
Aside from cases in which circulation had been overstated, other transactions that had, according to the ABC, not been correctly reported, included:
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Bulk sales that had been incorrectly classified as subscriptions (Finweek);
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Back issues that had been incorrectly classified as current sales (New Media Publishing’s Taste);
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Controlled free distribution that had been incorrectly classified as third party bulk sales, despite copies being sold at less than 50% of the cover price (New Media Publishing’s Time Out)
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Third party bulk sales that had been incorrectly classified as copy sales (Real Simple);
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and sales that had been declared in the incorrect quarter (8Ink Media’s Real Simple and Seventeen).
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The incorrectly reported actions listed above (except for the overstatements) did not affect the titles’ overall circulation figures.
Beiles said as far as the ABC was concerned, the matter had now been concluded.
Media24 said in a statement it noted “that the final ABC audit has confirmed that no further incidents of dishonesty have been found”.
It said !_LT_EMFinweek !_LT_/EMand other affected magazines would “engage vigorously with the ABC to resolve… differences of opinion about its interpretation of the (ABC) rules”.
■See the attached ABC releases (Related Links: Documents) for a breakdown of the ABC audit’s findings.
