The Sun records £68m loss amid falling sales and hacking damages

The Sun recorded a loss of £68m last year amid falling print sales and the enormous cost of phone-hacking claims against its parent company from figures including Sir Elton John and Heather Mills.

Rupert Murdoch’s News Group Newspapers, which publishes the Sun and retains liability for the activities of the News of the World, spent an enormous £54m on legal fees and damages related to the illegal interception of voicemails.

The figures, which cover the 12 months to July 2019, were revealed in accounts filed this weekend. They show that more a decade after the phone-hacking scandal began, the company is still spending an eighth of its revenue dealing with the fallout, as new cases involving the likes of Prince Harry continue to be filed at the high court.

Lawyers for phone-hacking victims have previously used pre-trial hearings to claim that phone hacking was widespread at the Sun but these cases have always been settled before going to trial, avoiding the need for the claims to be tested in court.

Settlements between News Group Newspapers and phone hacking victims usually include a statement that it was journalists at the News of the World, not the Sun, who were responsible for intercepting voicemails. The company has always said voicemail interception was limited to the defunct Sunday newspaper and did not take place at the Sun.

The Sun remains the biggest-selling print newspaper in the UK but is on track to lose that title to the Daily Mail at some point this year, as its paid circulation heads below 1.1m copies a day. This month it appointed a new leadership team of Victoria Newton as editor and Keith Poole as her deputy, with a focus on driving traffic to its website in competition with MailOnline.

Losses at the Sun’s parent company would have been substantially higher had the company not received a windfall as a result of the collapse of its Sun Bets gambling venture, which struggled to attract customers and was best known for being fined by regulators after paying a non-League footballer to eat a pie on television.

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The joint venture with the Australian betting company Tabcorp – which thought that it would be able to break into the UK market by gaining access to Sun readers – was considered such a disaster by the bookmaker that it paid the newspaper a £39.5m fee to exit the deal early. The Sun has previously said it would welcome a new partner for its gambling operation, although it has yet to find a replacement and accounts suggest there is more potential growth at its Sun Bingo operation.

While the Sun’s underlying financial performance continues to worsen, its sister company that owns the Times and the Sunday Times managed to grow revenue slightly in a tough market. The decision to put the more upmarket newspapers behind a hard paywall helped boost revenue, with more than 300,000 digital subscribers – closing in on the numbers of people who buy the daily newspaper in print.

The company is also pushing ahead with plans to invest substantially in Times Radio, which recently hired the BBC’s John Pienaar to host its drivetime programme when it launches later this year.