Rules & Resources
Newspaper Support Center

Third-Party Sales Guidelines - Canadian Newspapers

CONSIDERATIONS

Tthe purchaser of newspapers must pay a qualifying price for the newspapers “net of all considerations.”

What is the meaning of “net of all considerations"?

“Net of considerations” is defined as follows:

  • The purchaser has paid the required price for the newspapers and, where applicable, the recognized retail value of any other good or service that was an influencing factor in the decision to buy the newspapers.
It is the publisher’s responsibility to ensure the newspaper purchase is being made because the buyer wants to purchase the newspapers, not because the purchaser can gain other goods or services of value in return (or discounts for these goods and services).

Examples of goods and services commonly provided to third-party purchasers in addition to a simple purchase of the newspaper includes, but is not limited to, the following:

  • Wraps, stickers or sticky notes containing an advertisement for the purchaser
  • ROP advertising to promote to consumers that a newspaper can be obtained at its location or event
  • Delivery or distribution credits, if a purchaser uses its own staff to distribute newspapers and wants the newspapers to compensate them for that effort
For example, if the purchase of newspapers was contingent on the purchaser also receiving free or discounted advertising space, the sale of newspapers would not qualify as paid circulation.

NOTE: The calculation of “net of considerations” is not limited to the contract or agreement for the purchase of newspapers.

Charge to Purchaser for Each Good and Service Provided

ABC does not restrict a newspaper from offering other goods and services as part of the third-party sales transaction. However, in order to ensure the “net of considerations” requirement is met, and therefore the price paid by the purchaser for the sale qualifies, the following must occur:

  1. A charge to the purchaser must be incurred for every good or service provided by the newspaper in addition to the copies of the newspaper (unless it is limited notification as described in Notification.)
  2. The amount charged to the purchaser for each good/service must be comparable to the same amount the newspaper would charge to any other client EXCLUSIVE of the purchase of newspapers (fair market value).
  3. Documentation must be maintained by the newspaper to support the fair market value charged to the purchaser for each good/service.

Transaction Summary Form

During the circulation audit it is the publisher’s responsibility to present to ABC staff the full scope of the entire third-party sale transaction resulting in how the “net of considerations” requirement was met. If the purchaser was offered any other good or service (anything in addition to a simple purchase of copies of the newspaper), that was an influencing factor in the decision to buy newspapers, then a Transaction Summary Form (Microsoft® Excel® Spreadsheet) must be completed. This form must:

  • Be completed for each separate third-party sale transaction
  • Disclose ALL transactions influencing the third-party sale (not limited to the contract/agreement for the purchase of newspapers)
  • Result in a qualifying price paid for newspapers, net of all considerations
A separate “Transaction Summary Form” must be completed for EVERY program that involves anything in excess of the simple exchange of payment by the purchaser for copies of the newspaper. This applies to both cash and barter transactions.

You can view a completed Transaction Summary Form – Example (Microsoft® Excel® Spreadsheet).

Net of Considerations Attestation

During the circulation audit, it is the publication’s responsibility to present an attestation to ABC staff acknowledging the “net of all considerations” requirement was met for all third-party programs.

Therefore, ABC requires the newspaper’s senior management to complete and Attestation of Net of All Considerations (Microsoft® Word® Document). This attestation must:

  • Be completed at the end of each audit period (one per audit period)
  • Must be completed by a representative of the newspaper’s senior management who is familiar with the financial record keeping process and can certify a qualifying price was paid for all third-party transactions – net of all considerations




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