The Sun posted a £51million loss last year as the Covid pandemic and a shift in online advertising spending hurt its newspapers, while its parent company sought to end the legal affairs of phone hacking that cost him hundreds of millions of pounds over the past 15 years.
Rupert Murdoch’s News Group Newspapers, which publishes the Sun and retains responsibility for the activities of the former News of the World, has spent £49million in legal costs and damages linked to historic phone hacking allegations at the during the year until June 27, 2021. This compares to the £80m spent the previous year.
Financial documents show NGN’s highest-paid anonymous director – most likely Rebekah Brooks, chief executive of parent company News UK – received a 50% pay rise last year to £3.6million .
On Thursday, NGN begins a two-day hearing at the High Court in an attempt to end ongoing managed hearings where new potential claimants start legal action each year.
There have been hundreds of cases filed over the past 15 years – in December NGN agreed to a substantial settlement with actress Sienna Miller to ensure her piracy allegations did not go to trial – the lawyers saying there could still be thousands of potential victims to come forward.
In terms of the Sun’s financial performance, the company said revenue fell from £324m to £318.6m last year. Digital advertising and other customer revenue, including its betting and gaming operations, were able to partially offset print media losses, he added.
“The decline in revenue was primarily due to adverse print market conditions exacerbated by the pandemic, particularly in Monday-Friday sales, although performance has continued to improve since the first lockdown and throughout the year,” the company said in its file at Maison des Entreprises.
“There was a decline in both newspaper circulation and print advertising revenue due to an industry-wide acceleration in the shift in spending to digital.”
By contrast, The Times and The Sunday Times, also News UK titles, posted record profits in the same financial period as digital revenue and increases in cover prices helped them counter the wider decline. Of the industry.
Their parent group, Times Newspapers Limited (TNL), said pre-tax profits had more than tripled from £10m to £34m year-on-year, the highest since the securities began trading. turn a profit in 2014. Revenues increased from £310m to £310m. 327m.
“The increase in revenue was supported by strong growth in digital subscription revenue and digital advertising revenue which, supported by the impact of increases in cover prices for both titles during the period, were more than capable of mitigating industry-wide declines in both newspaper circulation and print advertising,” TNL said.
Digital-only paid subscribers hit 399,000 at the end of last year, with total subscribers, including print, surpassing 600,000.
Robert Thomson, chief executive of News UK’s global parent company, News Corporation, told the publisher’s latest business update that the UK operation made its strongest profit contribution for the second quarter of the year. company at the end of December since 2011.
The Christmas quarter also proved to be a milestone for The Sun, which reported that digital advertising revenue exceeded print advertising for the first time.
However, the scale of the challenge facing publishers was made clear this month when Reach, owner of the Daily Mirror and Daily Express as well as hundreds of regional brands, announced that its market value had plunged by a quarter as he warned of a significant cost. increased.
Reach said the existing problem of rising newsprint costs, caused by rising distribution costs and supply issues, was exacerbated by soaring energy prices.
NGN, which employed an average of 543 editors last year, reported a total payroll of £42.5million. The subsidiary’s three directors, including News UK chief operating officer David Dinsmore, received a combined salary of £6.7million, up from £4.5million in 2020.
Last June, it emerged that Rupert Murdoch had reduced the value of the Sun newspapers to zero. And last year, in a piece of Fleet Street symbolism, the Sun lost its UK’s best-selling newspaper title to the Daily Mail. It had been the country’s most popular newspaper since 1978.
Most of the costs associated with the phone hacking are covered by Murdoch’s US-listed Fox Corporation, which agreed to compensate News Corporation when the companies were separated in 2013.