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Rupert Murdoch’s UK newspaper empire has incurred fresh costs of more than £51mn related to claims made in the phone hacking scandal against the Sun and now defunct News of the World, according to its most recent annual accounts.
However, the year’s costs from ongoing court action against the group — which is still facing claims from Prince Harry as well as celebrities such as the actor Hugh Grant — fell from £128mn the year before when it had been forced to book additional provisions in its accounts.
In total, News UK has paid out about £1bn in settlements and legal costs since the scandal broke more than a decade ago. The group has admitted that phone hacking to procure stories took place at News of the World — leading to the newspaper’s closure, a public inquiry and a police investigation — but not at the Sun.
The costs mean that News Group Newspapers, which publishes the Sun, recorded a loss of about £66mn in the year to July 2023, according to accounts filed at Companies House. Costs of phone hacking claims are covered by US broadcaster Fox under the terms of the split of News Corp and 21st Century Fox.
News Group Newspapers reported an operating loss of £11mn after the one-off costs relating to legal cases were removed, reflecting changes by Facebook to reduce coverage of news as well as a tougher advertising market.
Meanwhile, TalkTV, Murdoch’s fledgling television business, was forced to take a hit of about £54mn in its first full year because of rising operating costs.
TalkTV, which is struggling to gain viewers in the face of fierce competition from the right-leaning TV network GB News, was pulled off linear TV channels earlier this year for an online-only future.
News UK Broadcasting, the company that sits above the channel, generated revenues of just £5.6mn, albeit this is a sharp rise from the £1.1mn the year prior.
Staff employed by the group almost doubled to 115 during the year, contributing to the rise in costs. It is not yet clear how many will be employed by the online-only TalkTV and what costs will be incurred through restructuring the business.
Talksport Ltd — which owns Times Radio, Virgin Radio, Talksport and Talkradio — reported a profit of £8.6mn.
The Times and The Sunday Times, also part of Murdoch’s UK media empire, recorded a pre-tax profit during the year, although this represented a fall from the £73.2mn of a year earlier to £60.9mn. Times Media, the operating company for the newspapers, continued to grow subscriptions, to 565,000 at the end of June 2023.
People close to News UK — which sits above the various operating companies — said that the accounts this year represented one week less compared with the prior year.
They pointed to a tough advertising market, and inflationary cost pressures from wages, energy and newsprint prices, as well as continued investment, as reasons for the fall in profits at the titles.
However, at the level of consolidated earnings before interest, taxes, depreciation and amortisation, News UK contributed a profit to parent company, the US-listed News Corp, for 2023.
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