1. Qualified Sponsor – A qualified sponsored shall be considered any business or organization where the primary activity is to sell or provide services or products to the consuming public. This rule application allows organizations having a consumer presence such as retailers or drug manufacture companies to be qualified sponsors as well as charities, consumer information Web sites, local governments and schools.

Companies such as advertising agencies, marketing companies, companies who service delivery of publications to recipient room locations, list rental organizations or other similar firms are examples of companies who typically do not meet this criteria as an eligible sponsor.

Note: Organizations who are affiliated to or have a financial relationship with a publisher are not considered eligible sponsor. This includes, but is not limited to, third-party subscription selling organizations and their subsidiaries and other similar publisher vendors.

3. Contract for Purchase – The transaction for the purchase of the magazine must be separate from any other financial agreement with the sponsor and the magazine or their agent.

The contract for purchase must include itemization of the magazines being purchased (by magazine name), quantity of subscriptions purchased by magazine, term of subscription purchased, amount being charged by magazine and total amount due.

A clear audit trail must be present to validate that a qualifying amount was paid by the purchaser for the sponsored sale.

When sponsored sales are purchased in conjunction with an advertising contract, the requirements for billing and/or invoicing needs to meet one of the following:

• The advertising agreement and magazine purchase agreement are shown on separate contracts; or
• The advertising agreement includes specific language regarding the magazine purchase price within the contract when the agreement includes both advertising and magazine subscriptions; or
• The purchase price of the magazine subscription is a separate itemized line item within the contract when the agreement includes both advertising and subscriptions.

7. Attestation to be executed by the publication-

For Sponsored Sales involving an agent/broker
All publishers will be required to submit a letter of attestation from their Chief Financial Officer (CFO) on an annual basis coinciding with the ABC audit period. The attestation must stipulate that the purchase of magazine subscription by __________ represents a “stand-alone” transaction and is not related to any other relationship between __________, you or the publisher – that is, that there were no other factors such as refunds, rebates, reduced advertising, rates, etc. that influenced __________ in making these purchases.”

For Direct to Publisher Sponsored Sales
All publications will be required to submit a letter of attestation from your Chief Financial Officer (CFO) on an annual basis coinciding with the ABC audit period. The attestation must stipulate that the purchase of magazine subscriptions by __________ represents a “stand-alone” transaction and is not related to any other relationship between you and __________ - that is, that there were no other factors such as refunds, rebates, reduced advertising, rates, etc. that influenced ___________ in making these purchases.

There needs to be one attestation per audit period, per title for all sponsored sales that were performed in the period.

8. Attestation from sponsor-

Publishers are required to submit a letter of attestation from a responsible financial officer of the sponsor organization attesting to the details of the sponsored sale program.

The attestation is to address the following areas:

• Acknowledgement of the transaction (such as: we have agreed to purchase . . .)
• Acknowledgement of 'price paid' (e.g. 'at $x per copy)
• Acknowledgement of the 'totality' [net of all considerations aspect] of the transactions ('this is an independent purchase and not influenced by any financial or other considerations offered to us by either agent or publishers in an attempt to get us involved in the purchase of the magazines’)
• Contact information of the author of letter

10. For Audit – At the time of audit an auditor will need to have proof of purchase, and proof of payment, along with the above attestations.

As determined necessary based on the individual sale transaction, the auditor may request additional information for review.

For additional clarification regarding this rule change, members are encouraged to contact their publisher relations manager at ABC headquarters.