Newsday publisher will retire

Amid scandal surrounding false circulation figures, Jansen moves up departure date to hand reins over to second-in-command Aug. 15

BY JAMES T. MADORE | STAFF WRITER

July 20, 2004

Newsday publisher Raymond A. Jansen said yesterday that he will step down amid a spreading circulation scandal that some have called the worst to hit the newspaper industry in decades. Timothy P. Knight will take over as publisher and chief executive on Aug. 15.

Jansen, who turned 65 on Sunday, announced his retirement after 10 years in his post at a hastily called meeting of Newsday's managers. Jansen said he was moving up his planned retirement to help the newspaper restore its circulation credibility.

Tribune Co., Newsday's owner, also announced the retirement of Louis Sito as Hoy publisher and vice president of Hispanic media. Two executives from Chicago will assume his duties on an interim basis.

The management shake-up came four days after Chicago-based Tribune, which purchased Newsday and Hoy in 2000, said an internal investigation had discovered the circulations of both newspapers had been inflated even more and gone on longer than first disclosed last month. Tribune also set aside $35 million for aggrieved advertisers covering a period as far back as 2001.

The appointments came on the same day Newsday published a story in which current and former employees detailed frantic efforts to boost circulation with tactics that included delivering newspapers to abandoned homes, people who hadn't ordered copies, and sometimes outright fabrication of numbers.

Newsday quoted Jansen as blaming the scandal on "a rogue operation" within the circulation department that had violated the "trust" he had placed in them.

Seeking to re-establish trust

In an interview yesterday, Knight said his top priority was "re-establishing trust with advertisers following the circulation issues." He also said it was critical to reassure shaken Newsday employees that "this is a great institution and virtually all of them had nothing to do with the situation we face."

Knight, who turns 39 next month, said he was told late last week that he would become Newsday's top executive. He came to the paper 17 months ago to fill the No. 2 job, executive vice president and general manager. Last month he was named president and chief operating officer.

"You have my personal pledge that we are fully committed to determining why, how and by whom these unacceptable circulation practices occurred," Knight said in a letter to employees. "We are committed to instituting new safeguards to prevent events like these from taking place in the future in any facet of this enterprise."

Knight, who holds degrees in accounting and law, worked for a high-powered law firm with offices around the globe before joining Tribune in 1996 to work on mergers and acquisitions. He then served as vice president of strategy and development for the publishing division before spending about two years at the flagship Chicago Tribune overseeing several departments, include the paper's Internet operation and the Spanish-language Exito.

A long career

Jansen, in contrast, has spent more than 30 years at Newsday, with an interlude at the Hartford Courant, where he served as publisher. In 1994, he returned as Newsday's publisher and soon confronted the task of rebuilding the paper in the wake of then-owner Times Mirror Co.'s decision to shutter the New York Newsday edition. Many yesterday credited him with "saving the paper."

Matthew Crosson, president of the Long Island Association, said: "With Ray Jansen's retirement, Long Island is losing a very, very fine man and one of Long Island's strongest assets." Jansen is a vice chairman of the LIA's board of directors.

Like others interviewed, Crosson said he didn't believe Jansen was responsible for the circulation scandal. "There is absolutely no way that Ray Jansen would ever have tolerated this if he had any way of knowing about it. Whatever happened with respect to the circulation numbers was an aberration that had to be caused by the people who were doing it for their own personal benefit," Crosson said.

On Wall Street, some analysts also expressed regret at Jansen's quick departure but said it was warranted given the magnitude of the inflated circulation, which has been pegged at more than 40,000 of 579,729 daily copies and more than 60,000 of 671,819 Sunday copies.

"Unfortunately, I think this is the type of thing that needs to be done to reassure advertisers as well as investors that this issue isn't going to be recurring," said James M. Marsh of S.G. Cowan Securities in Manhattan.

In a brief letter to employees, Jansen acknowledged that he had not planned to retire until later this year. "But, understanding what our management has to do to repair the damage to our circulation credibility, it became apparent that my departure date should be sooner than anticipated ... It is time for me to go."

Similar sentiments were expressed by Sito, 60, who founded Hoy when he was the No. 2 business executive at Newsday. "I do not want to be a distraction to the great work being done at the newspaper on a daily basis. It is time for me to move on," he said in a statement.

Sito's duties at Hoy will be split between two people on an interim basis: Digby Solomon Diez, general manager of Hoy's Chicago edition, will be publisher of the three Spanish-language editions; and Timothy Kennedy, vice president for strategy and development at Tribune publishing, will serve as chief operating officer.

Staff writer Jamie Herzlich contributed to this story.