The newspaper circulation watchdog is set to launch an investigation into Rupert Murdoch’s flagship Wall Street Journal (NSDQ: NWS) Europe, following the resignation of its publisher amid allegations that it artificially boosted its sales figures. The Audit Bureau of Circulations said it had “recently” decided to take another look at the sales scheme that sold bulk copies to students at cut prices on the basis of “new evidence”, although it did not elaborate on when exactly it received the evidence.
Andrew Langhoff, one of Murdoch’s most senior European executives, resigned on Tuesday after the Journal said he had inappropriately agreed to publish two articles as part of a commercial agreement with a Dutch company. On Wednesday the Guardian reported that the Dutch company had been involved in a scheme designed to artificially boost the newspaper’s sales figures.
The scheme included a contract struck by WSJE’s circulation department and a Dutch consulting firm, called Executive Learning Partnership, which ran from May 2009 until April 2011 and involved sponsorship in the paper and an agreement to publish articles promoting the firm.
Through Executive Learning Partnership and other companies, the Journal had effectively been secretly buying thousands of copies of its own paper at low prices, boosting its audited circulation. In total, 41% of the Wall Street Journal Europe’s audited circulation of 75,000 came via this method.
ABC (NYSE: DIS), the official body responsible for auditing the sales of newspapers in the UK, said on Thursday that it had originally reviewed the scheme when it began in 2009 and was “deemed to be compliant with the rules” that govern the category of circulation measurement called “multiple copy subscription sales”.
A second audit of the WSJE’s circulation, carried out to provide a sales figure for the six-month period to the end of December, also gave the newspaper a clean bill of health with ABC stating that it “found the scheme to be in order”.
However, in the light of the resignation of Langhoff and the further allegations, ABC has now changed its stance. “More recently we have re-examined the scheme based on some new evidence available,” said Jerry Wright, chief executive of ABC UK. “There now appears to be additional new information which may give grounds for further investigation.”
According to the official ABC definition of what constitutes a “multiple copy subscription sale”, which it has deemed that the WSJE’s scheme fell into, is as follows: “These are multiple subscriptions purchased on a contractual basis by an organisation for their employees/members, or for students at educational establishments. The final recipients of these copies do not need to be known but the publisher must be able to demonstrate that the subscription copies are delivered to the same fixed pool of individuals. Payment may be by someone other than the recipient”.
This article originally appeared in MediaGuardian.