Periodicals permit a valuable business asset

September 10, 2013

Don’t give it up on
purpose, or accidentally

 

I

 have recently been involved in several situations in which daily and weekly newspapers had decided to quit mailing copies via the Periodicals mailstream for one reason or another and abandoned or gave up, their Periodicals permit.

I’m writing this to warn others to avoid making this mistake if possible, and explain what options exist to reinstate Periodicals mailing privileges.

First, let me establish a basic, if surprising principle: A periodical may qualify for a Periodicals permit whether it is mailing or not. Yeah, that shocked me, too, when I learned it last year. But it’s a fact. As long as one meets certain standards, such as having more than 50 percent of its total distribution paid, it doesn’t matter whether one actively mails each issue or not.

A Periodicals permit is not renewed each year like Standard Mail and some other classes. Its rules allow mailing but do not require it. One still has to complete a Statement of Ownership, Management and Circulation, PS Form 3526, each year, and publish it as required in October. (And if you have electronic subscriptions, include them on a 3526-x, also printed—at least this year again.)

Some newspapers think there is a minimum quantity to be mailed per issue, like 200 in Standard Mail. Not so. You may mail even one copy on a PS Form 3541, Periodicals Postage Statement. (Not that many papers will want to, but it can be done.)

 

WHY SHOULD ONE KEEP PERIODICALS

PERMIT IF NOT MAILING REGULARLY?

Good question. Here are some answers:

1. Current management may have decided to home deliver all copies, or go electronic. But future managers may change the operating plan and want to go back to mail.

2. Many state laws and regulations regarding public notices and eligibility for other purposes, such as entry to state contests, require a newspaper to have a Periodicals permit. They were written this way, frankly, with publisher input in years past to ensure that public notices reach readers who have requested the publication—an increasingly important point as obscure websites compete for legal status. And a newspaper that is required to have a permit but inadvertently forgot this linkage to public notices may jeopardize the legal validity of notices that they run during the period without a permit. That can have broad implications for tax levies, property foreclosures and other serious matters.

3. For these reasons, and possibly others, a Periodicals permit is a valuable intangible business asset that travels with the other assets of the business and should not be dealt with lightly.

4. It is hard to qualify initially. It requires some paperwork and chews up a fair amount of time. If you’ve done it once, you won’t want to have to go through it again.

If a newspaper decides it may not want to actively mail copies, either indefinitely or for some specific period of time, I’d advise that a letter be written to the post office of original entry regarding mailing plans, but specifically stating that the permit holder is not abandoning its permit, and reserves the right to mail again in the future.

Many of the problems I’ve seen came when the paper told the main post office it wouldn’t be mailing, and though not specifically stating abandonment, gave that impression via the wording of the letter. People writing those letters meant well, and only later found out the problems they had caused.

 

HOW DO I REINSTATE A PERMIT?

If you merely stopped mailing, without abandonment, it’s just a matter of starting to mail again, with all the required disclosures in your masthead.

If you inadvertently abandoned the permit, you will have to reapply for Periodicals status. One must complete PS Form 3500, Application for Periodicals Mailing Privileges. A fee, currently $650, will be required with the form. Domestic Mail Manual Chapter 707 details certain requirements, which must be met. You can best access it at the Postal Explorer website. Search for it on the Web, and then click on the DMM, in blue right below the “Domestic Mail” heading in red.

Assuming you keep good records of paid circulation, perhaps for an outside audit company, or for accounting purposes, you may be in good shape to complete the form and submit it through your postmaster. He/she will, in turn, forward it to the New York Pricing and Classification Service Center, perhaps through the district manager, Business Mail Acceptance.

All sales of subscriptions and bulk sales for at least 30 percent of the basic price per term may be counted as valid paid copies, assuming one has a paper trail of the payment records and a bank deposit—30 percent (formerly 50 percent) is the so-called “nominal rate” rule.

Single sales copies, copies exchanged with other publications, and copies furnished to valid advertisers in each addition also count as paid.

USPS accepts an outside audit as documentation of qualification for those newspapers so audited. However, current rules interpretation by the New York Pricing & Classification Service Center require that an audited paper be re-audited as of the date of application, and that date is supposed to be close to the date of the new application.

The National Newspaper Association is asking the PCSC whether a paper with an outside audit (such as by Alliance for Audited Media, formerly ABC) can use the last audit when reapplying after a permit is inadvertently dropped. There is no reason why a newspaper with a long record of audited circulation cannot be judged qualified without having a second audit during the same year.

 

Max Heath, NNA postal chair, is a postal consultant for Athlon Media Group (American Profile, Relish, Spry and Athlon Sports magazine) and Landmark Community Newspapers, LLC. E-mail maxheath@lcni.com.

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