Losses at the Sun newspapers tripled last year as the outbreak of the pandemic took its toll on Rupert Murdoch’s media empire.
News Group Newspapers (NGN), which publishes the Sun and the Sun on Sunday, posted a pre-tax loss of £201m in the year to 28 June 2020 — three times the £68m loss posted the previous year. Revenue dropped by more than a fifth to £324m.
The sharp decline came as the newspaper group battled the “significant adverse” impact of the Covid outbreak and lockdown on both newsstand sales and advertising revenue.
Rebekah Brooks, chief executive of parent company News UK, warned last year of job cuts at the Sun and Times titles — as well as radio stations Virgin Radio, Talksport and Talkradio — amid the impact of the pandemic.
Covid has piled the pressure on Murdoch’s titles, which were already suffering the impact of structural declines in circulation and print advertising that have hit the wider sector.
The lower revenue also reflected the lack of a £39.5m boost in 2019 from Australian gambling firm Tabcorp, which pulled out of its agreement to operate Sun Bets.
In addition, NGN booked costs of £52m linked to ongoing phone hacking claims, many of which relate to the now-defunct News of the World.
The publisher yesterday paid out “substantial damages” to a number of high-profile figures including former Lib Dem MP Simon Hughes to settle phone hacking lawsuits.
Civil cases related to matters at The Sun have been settled without admissions from the newspaper.
The Sun, which is the UK’s best-selling newspaper, has continued to shift its focus to its digital offering as readers increasingly move online.
The title usurped fierce rival Mail Online for monthly unique visitors in June and July last year, with readership boosted by increased demand for updates on the Covid crisis.
In March 2020 the Sun also overtook BBC Sport to become the most-read UK digital sports site.
However, the increase in readership has failed to translate into revenue due to the sharp slump in the UK advertising market.
Separate accounts filed for Times Newspapers Limited, which publishes the Times and the Sunday Times, showed a more resilient performance for the broadsheet titles.
While revenue fell six per cent to £310m over the year, pre-tax profit increased from £3.8m to £10m as the publisher slashed costs.
Digital-only paid subscriptions for the titles grew 11 per cent to hit 336,000 as of 28 June last year, representing 60 per cent of its total 556,000 subscribers.
Newspaper groups have increasingly doubled down on subscription services to help counteract the decline in advertising sparked by the dominance of tech giants such as Facebook and Google.
The publisher warned its financial results for the current year would continue to be impacted by Covid, though it said the decline had improved from lows in April and May 2020.
Nevertheless, Murdoch’s empire said the ultimate impact of Covid was highly unpredictable and said it would continue efforts to cut costs.