Not the best of years for Rebekah Brooks, Rupert Murdoch’s prodigal UK media executive. Brooks resigned in 2011 at the height of the News of the World phone-hacking scandal but Murdoch returned to her to his embrace to run his UK newspaper operation after she was cleared of criminal charges in 2014; 2015-16 was therefore her first real hands-on year, and brought red ink for News Corp’s two key UK newspaper titles in the 2015-16 financial year as the British print operations of clan News Corp suffered another fall in revenues and introduced a surge in marketing to try to keep The Sun in the public eye, especially with its new sports gambling business.
The Sun made a loss of nearly 63 million pounds in 215-16 as steep declines in print advertising, redundancy costs and phone-hacking charges battered the tabloid, while The Times also slipped into the red, reporting a pretax loss of 5 million pounds in the year to July 3, down from a profit of 8.8 million pounds in 2015, thanks mostly to 13.7 million pounds in redundancy restructuring costs. But overall the performance of The Times and Sunday Times was far stronger and resilient than that of The Sun, which continues to struggle to offset sliding sales (down around 8%) and plunging ad revenues.
But The Sun’s loss was smaller than the 79 million pounds in 2015, thanks to a significant fall in charges relating to legal claims and costs relating to phone hacking. These costs and provisions fell from about 65 million pounds in 2014-15 to 30 million pounds last year.
The Sun’s weak performance was in stark contrast to The Times and Sunday Times. Their parent company, Times Newspapers Limited, said there was a “solid” performance in print sales income, including the first cover price increase in two years last April, and digital subscriptions, which grew to 182,000. The parent company said that, stripping out the exceptional costs, The Times had made an adjusted operating profit of 11.2 million pounds, down from 18.6 million pounds.
We will not see anything approaching this level of disclosure for The Dow Jones Co in the US (owners of The Wall Street Journal) or News Corp Australia. Both companies though are cutting close to US$100 million in costs in 2016-17, including dozens of jobs lost at all papers, printing and other production and backroom staff. — Glenn Dyer