NEW DISTRIBUTION MODEL FOR TWO EDITIONS OF 'HOY'

Chicago, L.A. Get Controlled Circ of Spanish-Language Daily

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NEW YORK (AdAge.com) -- Tribune Co. announced today that Spanish-language newspaper Hoy will become a controlled circulation daily in Chicago and Los Angeles starting in January 2005. The more established New York edition of Hoy will remain a paid-for newspaper.

Circulation scandal
Hoy, one of the newspapers widely

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reported to have inflated its circulation, revised figures downward by more than 40% after the Audit Bureau of Circulations found that the New York daily's circulation for the 12-month period ended Sept. 30, 2003, was 49,681, not 92,604 as previously reported. Tribune Co. expects daily circulation for the six-month period ended March 31 of this year to be between 40,000 and 50,000. The Chicago and Los Angeles editions of Hoy, started in September 2003 and March 2004, respectively, are too new for audited circulation figures.

Scott Smith, the Tribune Co.'s chief operating officer, said at the Credit Suisse First Boston media conference today in New York that the move to controlled circulation in the two cities is a way for Hoy to reach a broader advertising base.

Mr. Smith told AdAge.com that there is advertiser interest in Hoy but that getting Hispanic consumers to pay for the paper was a challenge.

"In New York, Hoy is well established, and New York is a good single-copy market," he said.

Targeted home delivery
The company later said in a statement that the Chicago and Los Angeles editions will be home delivered to targeted ZIP codes and distributed through vending boxes, stores and restaurants. Tribune Co. already has gained experience in free papers through its amNY and Red Eye titles in New York and Chicago.

Before the circulation setback, which forced the retirement of Hoy publisher Louis Sito, Tribune Co.'s strategy was to build a national daily city-by-city under the Hoy brand. The 6-year-old New York edition of Hoy competes against long-established El Diario La Prensa. In Chicago, Tribune last year revamped a weekly publication called Exito into daily Hoy. In Los Angeles, Tribune started Hoy after selling its 50% stake in leading Spanish-language daily La Opinion. The other shareholders, the Lozano family, now publish La Opinion as part of a larger Hispanic newspaper group called ImpreMedia.

Tribune CEO Dennis FitzSimons said at the media conference that the company has taken steps to recover from the circulation scandal at its Hoy and Newsday papers, which he described as "unethical and wholly out of character for Tribune." He said that the company has replaced the management team, overhauled certification and changed compensation plans.

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