News Group Newspapers, a subsidiary of News UK, has written down the book value of The Sun newspaper to zero, reports The Guardian:
Rupert Murdoch has written down the value of the Sun newspapers to zero as the impact of the Covid-19 pandemic helped to fuel a £200m loss at his flagship tabloid titles.
Advertising and sales revenues at the Sun and the Sun on Sunday plummeted, with turnover falling by 23% from £419.9m to £324m in the year to the end of June 2020.
The torrid market conditions, coupled with one-off charges related to ongoing legal action over allegations of historical phone hacking, led to pretax losses more than tripling from £67.8m in 2019 to £201.4m.
As a result News Group Newspapers, the subsidiary of News UK that operates the two titles, wrote down their value to zero. The £84m non-cash “impairment of publishing rights” essentially means the publisher does not believe the titles will return to positive growth.
Another factor is the value of the daily print newspaper as an advertising platform. As more ad dollars flow online and elsewhere, the economic value of the print product fades.
This would appear to be an extreme case none the less a sign of the “times”(no pun intended).
Murdochs’ problems are bigger than these results.
This 23% turnover decline covers the year to June 2020 and had 9 months normal trading, 3 months covid. 2021 will be worse.
Also in June 2020 the Sun stopped publishing the audited circulation numbers and in the same month The Mail made the claim it was now the UK’ s largest selling daily.
Pity poor Murdoch, losing sales to covid and to main rival.
On the bright side for 2021 results, there will be no assets left to make write offs.
Can almost hear the cheers from Liverpool