Sunday 23 February 2020 12:17 pm

Murdoch’s media empire hit by phone hacking charges as Sun suffers hefty loss

Rupert Murdoch’s Sun newspapers have posted another year of deep losses after the publisher was forced to pay out millions of pounds to settle phone hacking cases.

News Group Newspapers (NGN), which publishes the Sun and the Sun on Sunday, reported a pre-tax loss of £68m in the year to the end of June 2019.

Read more: Former Sun editor Kelvin Mackenzie calls for radio licence overhaul

The loss — narrowed from £91m in the previous year — was driven by the continued impact of phone hacking cases, with celebrities such as Sir Elton John, Elizabeth Hurley and Heather Mills all securing payouts last year.

Many of the cases refer to activity at the News of the World, which was published by NGN before closing in 2011. Civil cases related to matters at The Sun have been settled without admissions from the newspaper. 

In October Prince Harry filed a lawsuit against the tabloid titles over claims his voicemail messages were illegally intercepted.

Despite the costs, NGN posted turnover of £420m, up from £401m the previous year. This was primarily due to a £39.5m boost from Australian gambling firm Tabcorp, which pulled out of its agreement to operate Sun Bets.

The Sun, which is the UK’s best-selling newspaper, was hit by a wider slowdown in the print sector, though its circulation fell at a slower rate than the wider market.

The publisher has continued to invest in its online presence, which is now the number one digital newsbrand with a monthly audience of 32.8m, according to figures from Pamco.

In January the company launched a US version of its website as it looks to expand its online presence across the Atlantic and cash in on demand for entertainment and royal coverage.

Separate accounts filed for Times Newspapers Limited, which publishes the Times and the Sunday Times, showed Murdoch’s premium titles posted a pre-tax profit of £3.8m in 2019, down from £9.6m the previous year.

The company said its profit was dented by higher operating costs, including more investment in its editorial team and higher newsprint costs.

However, the publisher’s turnover rose from £326m to £330m over the year thanks to growth in digital subscriptions and digital advertising.

Digital-only paid subscriptions for the two newspapers rose 19 per cent year on year to 304,000, representing more than half its total subscriber base.

In October parent company News UK won a key tax tribunal case over its requirement to charge VAT on the digital edition of its paper.

The ruling, which came after the firm successfully argued that its digital edition was effectively a print edition as it was updated infrequently, could save the company millions of pounds.

The Times and Sunday Times have also won regulatory approval to share resources across both titles, meaning that some smaller desks such as Travel and Money have been merged into seven-day operations. However, it is not yet clear how significant the resulting cost savings will be.

Murdoch’s radio operation, which runs stations such as Virgin Radio and Talksport, boosted its turnover from £41m to £46m last year.

However, profit slipped from £6.5m to £1.6m as the company pumped money into new studios and launched the Chris Evans breakfast show on Virgin after poaching the presenter from Radio 2. 

Murdoch has ramped up his attack on the BBC in recent months, unveiling the launch of talk stations Times Radio, which has been mooted as a new rival to Radio 4.

Read more: Times Radio poaches veteran BBC presenter John Pienaar

The nascent station has already tapped veteran BBC journalist John Pienaar as drive time presenter, while other big-name hires are understood to be in the pipeline.

Times Radio, which will launch later this year, will run without ads, with top executives hoping to draw in new subscribers to its newspapers.