The growing argument over compensation for inflated circulation figures between the Institute of Practitioners in Advertising and the TrinityMirror-owned Birmingham Post & Mail, could go legal if no settlement is reached IPA insiders said today.
After a heated meeting last week between the two parties, the IPA rejected a plan put forward by TrinityMirror-owned Birmingham Post & Mail newspaper group to compensate advertisers for the paper group’s past Audit Bureau of Circulations figures which were revealed to be overstated.
Representatives of BPM which includes the Birmingham Evening Mail, Birmingham Post and Sunday Mercury, said it would set up an arbitration panel chaired by a senior QC to help settle claims by direct clients and agencies.
In a statement following the meeting the IPA rejected the scheme saying it was “unnecessary and complicated” and called for BPM to pay compensation to advertisers on a formula pro rata to the levels by which the paper’s circulation had been overstated.
“We think the arbitration panel is a smoke screen” said Marc Mendoza, member of the IPA Media Policy Group responsible for press sales practices. “We see the issue as a straightforward one. Birmingham Post & Mail published inflated ABC figures. It should now pay compensation based on the amount by which its circulation figures were inflated.”
The IPA is now advising its members not to respond to any approaches from BPM’s lawyers regarding the dispute.
Trinity Mirror has already set aside £20 million to cover future claims from advertisers following revelations that the three title’s circulations had been exaggerated over a period of six years. It has frozen its ad rates until January 2002 and is offering advertisers a 10% discount on bookings next year.
Mark Haysom, managing director of the Birmingham Post said: “We are aware that there are 80 of our larger customers who are not satisfied with what we have proposed. We understand and respect their position. We now want to ensure that these outstanding issues are handled in a fair and even-handed manner - hence the arbitration approach we are pursuing.”
Further discussions between the IPA and BPM are expected soon.