- News Corp is facing fresh questions about its newspaper operations
- Allegations have surfaced that circulation figures for the Wall Street Journal Europe were boosted by complex cut-price deals
- Andrew Langhoff, publisher of the Wall Street Journal Europe, resigned on Tuesday
- His resignation follows revelations of an apparent breach of journalistic ethics
News Corp is facing fresh questions about its newspaper operations, after allegations that circulation figures for the European edition of the Wall Street Journal were boosted by complex cut-price deals with a sponsor to which it had promised editorial coverage.
Andrew Langhoff, managing director of Dow Jones in Europe and publisher of the Wall Street Journal Europe, resigned on Tuesday following revelations of an apparent breach of journalistic ethics regarding a contract with Dutch consulting firm Executive Learning Partnership.
On Wednesday, The Guardian alleged that ELP had been paying just 1 cent per copy for 12,000 daily copies of the WSJE, equivalent to 16 per cent of its circulation, to be sent to students bearing its name. All told, discounted student deals equated to 41 per cent of WSJE circulation, The Guardian reported.
Dow Jones did not comment on the figures. It denied that it had effectively bought thousands of copies of its own paper through complex agreements with ELP and two "middle men" companies and said it paid ELP for conference services. "ELP was paid for legitimate services rendered; however, the manner in which they were paid was admittedly complex but nevertheless legitimate," it said.
"The Guardian's inflammatory characterisation of WSJE's former ELP circulation program is replete with untruths and malign interpretations," Dow Jones said. "Andrew Langhoff resigned because of a perceived breach of editorial integrity, not because of circulation programmes."
In a note to staff, Mr Langhoff said he was resigning because of the perception that news coverage had been influenced by the ELP deal. "There is -- and should be -- an inviolable boundary between our commercial relationships and the content we produce," he said.
ABC UK, which audits newspaper circulation figures, had certified the agreements, Dow Jones said. ABC UK declined to comment, beyond saying that it had strict procedures for investigating any complaint and that complaints were confidential until rulings had been reached.
"The practice of sponsored distribution to business schools and universities is common in the industry and clearly identified in all WSJE publisher statements," Dow Jones said. "While the copies associated with ELP were legitimate and appropriate, we were not comfortable with the appearance of the programmes."
Alan Mutter, a US newspaper analyst, said subsidised copies were common, but rarely on such a scale. "What's really different here, if The Guardian story is correct, is that it was much more complex and a much larger portion of circulation than most people would be comfortable with," he said.
In past circulation controversies, "publishers were forced to restate circulation and had to make some recompense to advertisers who were smart enough to complain", Mr Mutter said.
The Wall Street Journal -- which is a competitor of the Financial Times -- and its European edition are managed separately from News International, News Corp's UK newspaper arm, which closed down the News of the World in July in the midst of a phone hacking scandal at the Sunday tabloid.