The value of the Sun titles owned by Rupert Murdoch has been slashed to zero following a sales slump due to the Covid crisis and costs associated with the phone hacking scandal.
News Group Newspapers, which publishes the Sun and the Sun on Sunday and is the former publisher of the News of the World, reported a pre-tax loss of £202m for the year to the end of June 2020, according to its latest filing on Companies House.
The company wrote down the value of the Sun brand by £84m, meaning that for accounting purposes the tabloids are now worthless amid concerns about the outlook for print advertising and circulation.
That took its one-off charges for the year up to £164m, more than three times the figure for the previous year when the tabloids suffered a loss of £68m. Legal fees and damages as a result of "voicemail interception allegations" added up £52.3m for the year.
The cost of civil settlements will ultimately be covered by Fox, another company controlled by Mr Murdoch, which agreed to indemnify News Corp as part of a deal to separate the firms in 2013.
The losses mark News Group Newspapers’ second-highest loss after it fell £250m into the red for the year to June 2015 following another big writedown.
After more than four decades as Britain’s biggest-selling newspaper, the Sun lost its crown to the Daily Mail last year. At its peak the red-top sold an average of more than 4m copies a day.
Rupert Murdoch married Jerry Hall in London in 2016
Separate accounts have also been filed for Mr Murdoch’s Times Newspapers, the publisher of The Times and the Sunday Times, where pre-tax profits for the 12 months to June rose from £3.7m to £10m following lower spending on marketing and cost of sales.
The company said it has faced a hit on newsstand sales during the week "due to the lower level of daily commuters" as workers stayed home during the pandemic.
The results have emerged days after the chief executive of the Guardian Annette Thomas quit after losing a battle with editor Katharine Viner over the future of the left-leaning title.
Insiders said the newspaper’s complex structure had contributed to tensions between Ms Viner and Ms Thomas over who is in charge and how the Guardian should proceed.
The Guardian, which runs a system of donations to help fund its journalism, has reported that a combination of cost cuts and stable revenues meant that overall cash outflow last year was £16m. That compares with £29m in the year before the pandemic struck.