Rupert Murdoch has written down the value of The Sun newspapers to zero, acknowledging the tabloid brand that helped build his global media empire has become a worthless asset.
The Sun titles, whose accounts were published on Friday, suffered badly as the pandemic hit print advertising and circulation, with its turnover falling more than a fifth to £324m in the financial year to June 2020.
The bleak year left News Group Newspapers, a subsidiary of Murdoch’s NewsCorp that operates The Sun and The Sun on Sunday, nursing a pre-tax loss of £201m, even after slashing its costs and marketing.
The grim medium-term outlook for the print revenues, which carried the business through its heyday, forced the company to write down the asset by £84m, an impairment that left The Sun brand with zero carrying value.
The estimate of The Sun’s asset value was based on the assumption that the titles, according to management estimates in the accounts, would not return to positive growth.
Other one-off charges included £80m of legal costs relating to the phone hacking scandal, including £52m of fees and damages paid to civil claimants. Total legal charges amounted to £54m in 2019.
The accounts mark one of the worst years in the history of The Sun, which under Murdoch became Britain’s best-selling daily newspaper, with formidable political sway and a circulation that peaked at close to 5m in the mid-1990s.
After 42 years as the UK’s best-selling newspaper, The Sun lost its title to the Daily Mail last year, with its circulation — which is no longer made public — falling below 1m daily copies on average. NewsUK said The Sun’s brands reached 36.5m adults in the UK via its print titles and website.
The Sun has experimented with various digital business models to try to make up for the decline of its core business, including an online paywall that it introduced for two years and then dropped in 2015. NewsUK, the operating company for Murdoch’s UK businesses, has tried to expand The Sun brand into audio, betting and gaming.
“Our priority is to sustain our market-leading position as the number-one news brand in the UK by ensuring the proposition maintains its relevance for readers,” the company said in its accounts, noting The Sun Online continued to be a “key growth area”.
“While adverse changes caused by Covid-19 are expected to continue impacting the company’s performance in the fiscal year 2021, the rate and magnitude of the impacts should gradually slow,” it added.
NewsUK declined to comment.