Report says Brown Publishing 'inflated' circulation numbers

Report says Brown Publishing 'inflated' circulation numbers

A report in the Dayton Daily News this week alleges Brown Publishing inflated some of its circulation numbers before filing for bankruptcy earlier this year.

The Aug. 7 DDN report says Brown overstated "the numbers to advertisers by as much as 18 percent, according to an internal document obtained by the Dayton Daily News and Springfield News-Sun. In the document, Brown executives admit inflating the circulation numbers to maintain revenue from preprinted advertising inserts. Ad rates are tied to circulation numbers."

The newspaper goes on to say that "Publisher Frank Beeson discussed the false numbers at a Jan. 18, 2008, meeting with Chief Financial Officer Joe Ellingham and 10 other executives, according to the document."

As previously reported, U.S. Bankruptcy Court Judge Dorothy Eisenberg ruled July 29 in favor of the $26 million sale of Ohio-based newspaper chain Brown Publishing Co. to a group of company insiders led by current President and Chief Executive Roy Brown and two of his top executives, including Ellingham, The Associated Press reported. 

Eisenberg ruled that Brown Media Corp. could purchase the majority of the Brown Publishing Company chain for $22.4 million and also approved the purchase of two of Brown's Ohio newspapers, the Van Wert Times and the Ada Herald, to Delphos Herald, Inc., the AP said. 

Eisenberg reject the sale of three real estate parcels in Ohio. Brown Media was the lone bidder on the properties, offering $10,000 for parcels in Urbana, Xenia and Bellevue, according to reports. These properties were valued at several hundred thousand dollars, and Eisenberg said they had not been properly marketed for the highest possible sale price.  

According to Bloomberg News (www.bloomberg.com), "The official committee of creditors with unsecured claims opposed the real estate sale, claiming that Brown accepted the $10,000 bid for three parcels even though they might be worth more than $555,000. "Shareholder Windjammer Capital Investors LLC also opposed the sale." Windjammer sued Brown Publishing in 2009. Brown Publishing Co. filed for Chapter 11 bankruptcy relief earlier this year. 

Brown Publishing owns The Times-Gazette and County Shopper in Hillsboro, as well as newspapers in surrounding counties, including: The Wilmington News Journal and Star Republican, The Record Herald in Washington C.H., The People's Defender in West Union, The News Democrat in Georgetown and The Ripley Bee.

A report in the Dayton Daily News this week alleges Brown Publishing inflated some of its circulation numbers before filing for bankruptcy earlier this year.

The Aug. 7 DDN report says Brown overstated "the numbers to advertisers by as much as 18 percent, according to an internal document obtained by the Dayton Daily News and Springfield News-Sun. In the document, Brown executives admit inflating the circulation numbers to maintain revenue from preprinted advertising inserts. Ad rates are tied to circulation numbers."

The newspaper goes on to say that "Publisher Frank Beeson discussed the false numbers at a Jan. 18, 2008, meeting with Chief Financial Officer Joe Ellingham and 10 other executives, according to the document."

As previously reported, U.S. Bankruptcy Court Judge Dorothy Eisenberg ruled July 29 in favor of the $26 million sale of Ohio-based newspaper chain Brown Publishing Co. to a group of company insiders led by current President and Chief Executive Roy Brown and two of his top executives, including Ellingham, The Associated Press reported. 

Eisenberg ruled that Brown Media Corp. could purchase the majority of the Brown Publishing Company chain for $22.4 million and also approved the purchase of two of Brown's Ohio newspapers, the Van Wert Times and the Ada Herald, to Delphos Herald, Inc., the AP said. 

Eisenberg reject the sale of three real estate parcels in Ohio. Brown Media was the lone bidder on the properties, offering $10,000 for parcels in Urbana, Xenia and Bellevue, according to reports. These properties were valued at several hundred thousand dollars, and Eisenberg said they had not been properly marketed for the highest possible sale price.  

According to Bloomberg News (www.bloomberg.com), "The official committee of creditors with unsecured claims opposed the real estate sale, claiming that Brown accepted the $10,000 bid for three parcels even though they might be worth more than $555,000. "Shareholder Windjammer Capital Investors LLC also opposed the sale." Windjammer sued Brown Publishing in 2009. Brown Publishing Co. filed for Chapter 11 bankruptcy relief earlier this year. 

Brown Publishing owns The Times-Gazette and County Shopper in Hillsboro, as well as newspapers in surrounding counties, including: The Wilmington News Journal and Star Republican, The Record Herald in Washington C.H., The People's Defender in West Union, The News Democrat in Georgetown and The Ripley Bee.