Rules & ResourcesNewspaper Support Center
Third-Party Sales Guidelines and Rules
(U.S. and Canadian Newspaper Publications)
LIMITATIONS
There are two limitations for third-party sales circulation.
- Limitation on third-party sales circulation in its entirety.
- Limitation on ‘sponsored’ third-party sales.
Overall Limitation
Bylaw 2.11 Paid Circulation, states:
‘A publication with paid circulation is hereby defined to be one of which 70 percent or more of the total distribution during a regular six-month Publisher Statement period…qualifies as paid circulation under the standards of the Bureau. For newspapers, third-party sales are to be excluded from paid circulation for membership eligibility purposes…’
This means the total average circulation for third-party sales and unpaid, combined, cannot exceed 30 percent of a newspaper’s total distribution.
EXAMPLE:
| Circulation Type | Average |
| Home-Delivery | 60,000 |
| Single-Copy | 25,000 |
| NIE | 2,000 |
| Employee | 500 |
| Hotels | 500 |
| Third-Party Sales | 11,000 |
| Unpaid | 1,000 |
| Total Distribution | 100,000 |
In this example, the third-party sales and unpaid distribution combined equals 12,000 copies. A total of 12,000 divided by the total distribution of 100,000 = 12 percent.
Since the total distribution for third-party sales and unpaid combined is less than 30 percent of the total distribution, the newspaper maintains its eligibility for ABC membership.
‘Direct’ and ‘Sponsored’ Third-Party Sales
Third-party sales are, by definition, newspapers purchased by a third party, often referred to as a “sponsor.” However, per Rule C 3.3 Third-party Sales, ABC distinguishes the category of third-party sales into two distinct subcategories – direct and sponsored.
The sponsored subcategory of third-party sales is limited to two percent (2%) of total average paid circulation.
Direct Third-Party Sales:
- The purchase of newspapers by a single entity or individual for a specific event or program. The single purchaser controls all aspects of the distribution.
- If multiple entities are involved in a single third-party program, the circulation generated through the program is also considered ‘direct’ third-party sales circulation provided each entity has an independent relationship with the newspaper (separate contract for each entity that identifies the specific amount of newspapers they are purchasing and reflect a qualifying rate).
- Examples:
- A home improvement company purchases 10,000 copies, which will be delivered to non-subscribers, to promote a grand opening of a new store.
- A real estate firm purchases a three-month, 7-day subscription for every client who buys a home from them.
- A total of 2,000 copies are provided to local hotels for their guests. Four local restaurants that are responsible for 500 copies each, pay for the copies. The newspaper maintains a separate contract with each individual restaurant. Each contract reflects a qualifying rate per paper.
- The purchase of third-party sales newspapers that involves the solicitation of funds from multiple entities/individuals to fund a single program.
- Examples:
- Pooling of subscriber ‘vacation donation’ funds to support a Meals-On-Wheels, nursing home or hospital program. (Subscriber MUST identify the specific program to which they wish their funds to support.)
- A total of 5,000 copies are home-delivered to non-subscribers. Ten local businesses have agreed to each provide one-tenth of the funding for this program. The newspaper maintains a single contract for the full program and/or the invoice to each business reflects a quantity of 5,000 newspapers at one-tenth of a qualifying rate.
Any sponsored third-party sales in excess of two percent (2%) of average paid circulation (for the ABC Publisher’s Statement period) should be excluded from paid circulation.
EXAMPLE:
| Circulation Type | Average |
| Home-Delivery | 60,000 |
| Single-Copy | 25,000 |
| NIE | 2,000 |
| Employee | 500 |
| Hotels | 500 |
| Third-Party Sales | 11,000 |
| Total Paid Circulation | 99,000 |
The newspaper must be able to breakdown the 11,000 third-party sales average between programs that are sponsored versus direct. Let’s assume the 11,000 third-party sales average is comprised of 1,800 sponsored copies and 9,200 direct copies.
The sponsored sales average of 1,800 is only 1.82 percent of the total paid circulation of 99,000. Therefore, all 1,800 may remain in paid circulation.
If the sponsored sales average was over 1,980 (2% of 99,000), the excess copies would need to be excluded from paid circulation.