Leading gay publication misleads its advertisers

This story was reported for the San Diego News Network on May 11, 2010.

See original copy of story.

One of San Diego’s oldest gay and lesbian print publications has been misleading its advertisers with false circulation numbers and at the same time racking up debt, according to information obtained by San Diego News Network (SDNN.com) and San Diego Gay & Lesbian News (SDGLN.com).

In written materials, the Gay & Lesbian Times claims it prints 15,700 newsmagazines weekly, but printing invoices show it has scaled back to as few as 9,000 copies since February 2010.

In a joint investigation, SDNN.com and its media partner SDGLN.com obtained 15 invoices dated from Sept. 23, 2009 to Feb. 17, 2010 that show that the publication’s printer, Advanced Web Offset, printed 10,000 copies of the 60-to-72-page newsmagazine each week.

Additionally, invoices dated Feb. 24, 2010, March 3, 2010 and March 10, 2010 show the Times printed 9,000 copies of issues 1157, 1158 and 1159.

In an e-mail response to an ad query April 28, 2010, though, a Times sales person wrote: “Our weekly readership is 65,000. Every Thursday we publish 15,700 copies, send the paper out via E-blast to 13,000 subscribers and our websites www.gaylesbiantimes.com and www.gltnewsnow.com receive 25,000 to 35,000 hits per week.” Attached to the e-mail was the publication’s 2009 advertising rate information that claims “15,700 issues [were] printed each run” and boasts a readership of 38,750.

According to QuantCast, a website which monitors web traffic for registered URLs, the combined traffic for both sites totals 21,200 visitors and 63,000 views a month.

Sources say the publication has misled advertisers as far back as 2008. Sources also say publisher Michael Portantino and associate publisher Todd Klein did not inform the sales staff of the decrease in circulation, and allowed them to continue telling potential advertisers the magazine printed 15,700 copies each week.

Sean Suydam, a local computer consultant, signed a six-month advertising contract with the Times in August 2009. The advertising rate information he was sent by a Times employee said the magazine printed 15,700 copies weekly.

Suydam said he was not told the magazine cut its circulation. “I was led to believe the whole time [the Times] was printing 15,700 copies weekly,” he said.

“I feel ripped off,” he said. “I’ve always viewed the paper as a part of our community. It’s not the way I would expect someone in the community to treat someone else. I wouldn’t have expected it.”

According to Tim Marzullo, an ex-sales person, accounting assistant and office manager at the Times, circulation was cut in 2008, and the sales staff did not know how many copies were printed each week. Marzullo says Portantino encouraged sales staff to tell potential advertisers the publication has 65,000 weekly readers, but Portantino did not tell the staff members the new circulation numbers.

Marzullo said Rivendell Media, the nation’s largest LBGT media placement company that coordinates national advertising for the Times was never notified of the decrease in circulation either.

When potential advertisers asked, sales staff would tell them the magazine printed 15,700 copies each week, and Klein and Portantino would skirt the question, or did not call back, Marzullo said.

Asked why sales staff continued to send out advertising rate information that included the 15,700 circulation, Marzullo said, “The sales staff was never told [not to].”

In an e-mail response to questions regarding the decrease in circulation, Portantino claims that is not true, and if outdated circulation information was sent out, it was a mistake.

Portantino also wrote, “Like every print media company in the country we have had to make cuts and circulation is down as we’ve said so on our own website.”

In a column published on the publication’s daily news site www.gltnewsnow.com on May 8, 2010, Portantino acknowledged “circulation is down” but he failed to elaborate. That appeared after SDNN began making phone calls to the printer about circulation numbers.

Regarding the information on the 2009 rate card sent April 28, 2010 to a potential advertiser by a Times employee, Portantino wrote, “Our rate card does not give that figure and hasn’t for some time now. Any correspondence from this office stating anything different is incorrect severely outdated and an unfortunate, unintended mistake.”

The decrease in printed copies may be the result of dire financial straits, a source said.

An AWO invoice dated March 1, 2010 showed past due balances from Sept. 23, 2009, and a total of $124,546.27 owed. In an e-mail from AWO to Klein on March 17, the printer indicated a check from the publication bounced, and that the printer would require it to make “cash deposits from now until further notice.”

On Jan. 14, 2010, the Internal Revenue Service filed a federal tax lien for the tax period ending Sept. 30, 2008, and the amount owed at that time by San Diego Gay Times Inc. – the DBA for the Times – was $45,592.44.

San Diego Gay Times Inc. also received a final notice before levy for $1,219.58 from the state’s Franchise Tax Board on Jan. 25, 2010.

The San Diego county assessor’s office has no record that the debts have been paid, but it is possible the debts were satisfied and the IRS has not released its federal tax lien.

The Times vacated its offices at 1730 Monroe Ave. last month. An unlawful detainer and breach of contract civil lawsuit was filed in the San Diego County Courthouse by Albert Hanna, the building’s landlord. A source says the publication was behind on rent, and a public record shows Hanna filed the suit to recover $6,417.50 from the Times.

In a response to the suit, the plaintiff, San Diego Gay Times Inc., claimed the premises contains black mold and that the plumbing does not work, that it is not ADA-compliant, and that it paid for three parking spaces that are illegal spaces.

Hanna declined to comment to SDNN because the case is pending.

When asked via e-mail if a lawsuit had been filed against the Times, Portantino wrote, “There is none to my knowledge.”

A case management conference for the lawsuit has been scheduled for June 9.

Also, internal communications at the news magazine show urgency to collect cash from advertisers.

In an e-mail to sales staff on March 17, Portantino demanded sales staff “find and bring in $5,000 a piece today” from advertisers.

“Just do it, people are behind, bully them, push them, guilt them, deals were made and they are not following through,” he wrote. “There will be no more trust on our part.”

In the e-mail, Portantino threatened a change in the commission structure, layoffs and furloughs if the sales staff members did not accomplish the task.

On March 18, Portantino e-mailed the staff to say he was disappointed in collection efforts and on March 22, he e-mailed the staff to announce a 15 percent pay cut for all salaried staff, and a new commission structure for sales staff. In the March 22 e-mail, he also announced the publication would suspend its 401(k) plan, and would not participate in reimbursements for medical, dental and vision benefits.

“I’ve tried my best and my intentions were to try and keep you all from feeling the economic pinch,” he wrote. “Again, I’m sorry I was unable to accomplish that.”

Suydam said finding out the paper cut its circulation without notifying him changes his opinion of the Times – a news organization that, at times, has harshly criticized gay elected officials and gay social service organizations for not disclosing information, misleading the community, and for financial mismanagement.

“It’s almost as if it’s OK for them to do whatever they wanted to do, and it’s not OK for the rest of the community,” he said. “It’s like they’re holding the community to a higher standard than they’re holding their own organization to, and from a news organization I’d almost expect the opposite. I think news organizations hold themselves to a higher standard. I might tend to discount what [the Times] prints now. I probably won’t look at them the same way.”

A complaint against the Times has been forwarded to the Federal Bureau of Investigation and the San Diego County District Attorney’s office. Both the FBI and the District Attorney’s Office requested copies of the source documents provided to SDGLN and SDNN. The documents have been turned over to both agencies, though neither office will comment on whether an investigation will follow.

San Diego Gay and Lesbian News editor in chief Ken Williams and SDGLN.com staff contributed to this report. San Diego News Network staff members Joseph Peña, Hoa Quach and Eric Yates contributed to this report. As a matter of full disclosure, Joseph Peña is a former employee of the Gay & Lesbian Times.