Amid legal battles, declining readership, and the costly venture of TalkTV, The Sun reports a staggering £66 million loss, casting shadows over Rupert Murdoch’s media empire. Here’s the full story.
Financial Challenges
UK right-wing tabloid The Sun, owned by the infamous Murdoch empire News Corp, has faced significant financial challenges in recent years.
£515 Million Loss
Amid a precipitous decline in print sales, spiralling legal costs related to the phone-hacking scandal, and expenses accumulated by running the failing right-wing news channel TalkTV, the tabloid reported a loss of £66 million in the past year. This brings the Sun’s losses over the last half-decade to an eye-watering £515 million.
Phone Hacking Scandal
The Sun’s financial woes are primarily driven by the phone-hacking scandal, which has plagued the Murdoch media empire for years. The tabloid has been embroiled in lawsuits, including by Prince Harry, over illegal information-gathering practices.
Drain on Resources
The ongoing legal battles stemming from the phone-hacking scandal continue to drain News UK’s resources. While the company has settled numerous claims, including those from celebrities like Sienna Miller and Paul Gascoigne, the litigation process remains a costly endeavour.
Hacking Victims
The scandal erupted when the Guardian revealed that legions of journalists working for News UK, a wholly owned subsidiary of News Corp, had hacked the phones of actors, celebrities and, perhaps most shockingly, the phone of murdered schoolgirl Milly Dowler.
Deleting Evidence
According to The Guardian, in the police investigation into the newspaper’s phone hacking, detectives found that journalists had erased messages from Milly Dowler’s voicemail, potentially crucial evidence, to make room for new ones.
False Hope
While Dowler was missing, the deletions falsely suggested to her loved ones that she was still alive.
Millions in Damages
Due to the illegal and disturbing phone hacking that took place at News UK, the company has paid out millions in damages to victims, as well as ruinous legal costs.
£51.6 Million
The company has paid out £51.6 million in costs to victims, though this represents a significant reduction from the £128.3 million paid out last year.
4 Million Reader Decline
As if this were not bad enough news, the Sun’s woes have been compounded further by a significant decline in its online audience, which has dropped by 4 million readers in the past year alone.
Decline in Print Sales
This decline and a similarly steep decline in print sales have led to a stark reduction in the tabloid’s total reach.
Advertising Losses
A rise in the cost of the newspaper slightly offset the disastrous reduction in readership, but it was not enough to compensate for the slashing of advertising budgets for companies that previously advertised in the newspaper.
TalkTV
However, perhaps the largest contributing factor, aside from the payouts to victims of the phone scandal, was the astronomically high cost of the TalkTV brand. Despite high hopes that it would compete with its main right-wing rival, GB News, it crashed and burned.
Online Only
The channel’s market share was so disappointing that it recently announced it was going online only, eliminating TVs entirely.
Cash Strapped Channel
The cash-strapped TV channel could not attract viewers and, subsequently, couldn’t generate advertising revenue to offset its high operational costs.
Piers Morgan
Piers Morgan, the channel’s best-known host, recently announced his departure from the network to focus more on his YouTube content.
Times Media Ltd
In contrast to The Sun’s struggles, Times Media Ltd, which owns The Times and The Sunday Times, reported a profit of nearly £61 million.
Paywalled Content
The rise in online subscribers seeking access to paywalled content has buoyed the company’s financial performance despite challenges in the advertising market and rising newsprint costs.
Trio of Disasters
Despite the trio of disasters contributing to the company’s financial misfortunes, News UK attempted to put a positive spin on the announcement of its losses, with a spokesperson stating that the company hoped it was reaching the “tail end of litigation.”
Prince Harry’s Legal Battle
Despite this, Prince Harry has an upcoming legal battle with News UK, scheduled for January 2025, which might mean yet more bad financial news for the embattled company.
Self Inflicted Financial Wound
The Sun’s £66 million loss reflects not only the broader challenges facing traditional media outlets in the digital age, such as declining readership and reduced advertising revenue, but also a self-inflicted financial wound that, five years after the phone-hacking scandal broke, is still affecting the newspaper.
Sun’s Survival
As News UK attempts to overcome the twin obstacles of costly legal battles and the general decline of print media, it remains to be seen whether the Sun will survive.
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The post £66M Loss: Has the Sun Set on Murdoch’s Media Empire? first appeared on Edge Media.
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Grant Gallacher is a seasoned writer with expertise in politics and impactful daily news. His work, deeply rooted in addressing issues that resonate with a wide audience, showcases an unwavering commitment to bringing forth the stories that matter. He is also known for satirical writing and stand up comedy.