DALLAS (AP) _ Belo Corp. announced Monday it would pay $23 million in cash to compensate advertisers for overstating circulation figures at its flagship newspaper, The Dallas Morning News.
Belo said it would also spend $3 million on an internal investigation into the problem as it takes a $26 million charge in the current quarter. The charge amounts to $16.6 million, or 14 cents per share, after taxes.
Belo disclosed Aug. 5 that the Morning News had overstated newspaper sales by 5 percent on Sundays and 1.5 percent on other days. Advertisers overpaid because rates are usually based on circulation.
Robert W. Decherd, Belo chairman, president and chief executive, said the compensation was fair and ``should be regarded as an investment in the company's future.''
The charge amounts to nearly half the 32 cents per share that analysts had expected Belo to earn in the quarter ending Sept. 30, a survey by Thomson First Call shows.
Combined with other declines in circulation, Belo said the Dallas paper would report an overall circulation drop of 11.5 percent on Sundays and 5 percent during the week for the six-month period ending Sept. 30, compared to a year earlier.
Belo is the third major media company to report a problem with overstating circulation numbers.
Tribune Co. said in June that circulation at New York's Newsday and its Spanish-language paper Hoy were overstated. Hollinger International Inc. said its Chicago Sun-Times overstated circulation.
Besides the Morning News, Belo owns 19 television stations and three other daily newspapers.