REVEALED: Progress Press Inflated Print Figures In Invoices To Magazines
Progress Press, which is part of the Allied Newspapers that publishes the Times and Sunday Times, is alleged to have inflated figures on the number of printed copies in invoices to publishers of magazines inserted in The Sunday Times for several years, an investigation by Lovin Malta has found.
The monthly glossy magazines were produced by outside media houses, which had an agreement with Progress Press on payment of a monthly fee. The business model of the media houses was to make money from advertising revenue. And the monthly charges by Progress Press, which typically ran to many thousands of euros, accounted for the bulk of production expenses on that particular magazine.
On invoices, Progress Press used to bill magazines for 40,000 printed copies. Yet multiple unconnected sources, including sources within Allied Newspapers, told Lovin Malta that the actual circulation of the print newspaper at the time hovered at a bit more than half that figure.
They said that the figures only regularly rose above that in the last three months of the year in the runup to Christmas and other important national events, such as elections.
The sources said that the inflated figures of copies put on invoices went on for years before some of the media companies found out around ten years ago that the actual circulation or print-run was far lower than declared.
This soured the relationship with at least some of the media houses, and eventually led to salvoes of legal threats and posturing, including garnishee and sequestration orders, made over years. The sources said that some of these legal standoffs and threats have dragged on until recently, with Progress Press eventually settling for heavy reductions on outstanding payments.
Glossy magazines that were inserted in the Sunday Times at the time include FM Magazine, Homeworks Magazine, Tune In, Style on Sunday, and the Sunday Circle. Only the latter is still published.
In its investigations, Lovin Malta found a frenzy of court activity at the end of 2014. At one point Progress Press served a garnishee order on Network Publications, publishers of the Sunday Circle, which was then escalated a week later to a sequestration order.
The next day, Network Publications filed a judicial letter in which it requested damages or reimbursements from Progress Press on payments made over the “past years” after requests for monthly payments “for publication of 40,000 copies of the magazine Sunday Circle monthly when it results prima facie that the print run was much less than that.”
Less than three weeks later the garnishee and sequestration orders were both revoked.
The two companies eventually made a deal in subsequent years, and Sunday Circle is now produced by Allied Newspapers.
No reply to Network Publications’ judicial letter could be found, and Lovin Malta asked the Acting Chief Executive Officer of Allied Newspapers, Alex Galea, why Progress Press or its parent company did not reply to judicial letters. He replied that “we are not aware of the below-mentioned judicial protests (or letters) filed against Progress Press.”
At that time, in 2014, the managing director of Progress Press was Michel Rizzo (having been appointed to the role in 2013), and Adrian Hillman was director and chairman of the same company. Hillman was simultaneously managing director of the parent company, Allied Newspapers. Rizzo then became managing director of Allied Newspapers after Hillman resigned when he featured in the Panama Papers leak as having been the recipient of hundreds of thousands of euros transferred by an offshore company reportedly belonging to Keith Schembri, who was Chief of Staff of former Prime Minister Joseph Muscat.
Hillman, as well as Vince Buhagiar, who was managing director before Hillman, were recently charged in court with bribery over a multi-million printing press supplied by a company of Schembri’s, who has also been charged in the same case.
The police have alleged in court that Progress Press’ paid millions more than the normal or actual price for the printing press, with a portion of the inflated price being siphoned into kickbacks.
Rizzo has separately and more recently been charged with alleged fraud and making false declaration to a public authority over a grant given to Progress Press by Malta Enterprise.
Galea took over as acting CEO after Rizzo “suspended himself.”
In response to questions on the actual circulation having been fewer than the 40,000 copies claimed in invoices, Galea said: “Any fees charged by Allied Newspapers did not merely cover printing but also pre-press work, insertion and distribution. These were reduced over time as our digital products became market leaders.”
Multiple sources said that Progress Press changed or dropped the wording on its invoices after at least some of the outside media houses confronted the company about the circulation being lower than the number of copies specified on invoices.
Multiple sources within Allied have said that the circulation of the print newspapers has continued to decline, with print circulation of The Sunday Times now fallen to below 10,000.
Asked whether advertisers were or are being misled on print circulation figures, Galea said: “Our loyal advertisers make a conscious decision to advertise with our media because they attract by far the highest readership/viewership in Malta. Furthermore, advertisers are offered packages that take into account our digital reach, which is the largest of any website in Malta and continues to grow.”
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