Hundreds of copies of The Age, the Herald Sun and The Australian newspaper counted in official circulation statistics are piling up unread on pallets at the Melbourne University Student Union during the university’s mid-semester break.

A photo of one pallet taken last week outside the basement newsagent shows the full extent of the carnage, with stacks of unread newspapers shrink-wrapped and ready for the tip. But because the unread papers are technically the same as rolled-up copies left on an individual subscriber’s front lawn, they are counted as paid sales under official Audit Bureau of Circulations definitions.

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The latest evidence of soft circulation comes after media website Mumbrella published an exclusive video this morning of copies of the Sydney Morning Herald sitting idle in the University of Sydney’s Wentworth Building. SMH CEO Lloyd Whish-Wilson told the website that it was “normal practice that deliveries of the Sydney Morning Herald to universities are reduced significantly during semester recess”.

“This did not happen in this instance and, as a result, we are now examining our internal processes,” Whish-Wilson said.

Under a ‘tertiary subscription’ arrangement with students, thousands of copies of The Age and thousands of copies of The Australian and the Herald Sun are bulk-delivered each day to a number of Victorian university campuses. At Melbourne and Monash universities the daily amount is around 3,500 each. But many are never picked up and end up in recycling, rather than being ‘returned’ to Fairfax or News.

But a loophole in ABC rules means media companies are not required to break out  the bulk copies from their headline net paid sales figure or reduce daily circulation amounts to take into account the unread papers because the tertiary and secondary deals are with individual ‘subscribers’.

Two weeks ago, Crikey revealed that in 2007 Fairfax was distributing a total of around 40,000 copies of The Age — around 20% of its total circulation — each day to schools and universities. A senior Fairfax executive, who is still with the company, said that if the 40,000 figure was ever made public the masthead would have to “write down” its advertising by the same amount. A former executive, Antony Catalano, backed those claims, saying that finding weak points in the guidelines were an “office sport” while he was still with the company.

Since then, further tip-offs have come thick and fast, with News Limited also fingered over unread bulk copies littered on campuses and in high school staff rooms.

*Do you know where they’re dumping free papers? Tell us and we’ll plot it on our Free Newspaper Tracker