Week 18 - News Story

News Corp UK suffers £3.5m loss after £51m profit the year before

http://www.theguardian.com/media/greenslade/2014/dec/17/news-corp-uk-suffers-35m-loss-after-51m-profit-the-year-before

Rupert Murdoch’s British newspaper and publishing division suffered an operating loss of £3.5m in the year up to June 2014 compared to a £51m profit the year before.The loss by News Corp UK & Ireland, which owns the Times, Sunday Times, the Sun and the book publisher HarperCollins, is revealed in accounts filed by the company, without fanfare, at Companies House. One stand-out feature was the plunge in the profitability of the Sun, where operating profits were down to £35.6m from £62.1m in 2013.The Sun’s revenues fell 5.5% to £489m, due, says the report, “to continuing market decline in newspaper circulation, particularly for the popular segment”.Last month, the paper revealed that some 225,000 subscribers had signed up for online packages, which it regarded as a success, but it did not compensate for the continuing decline in print revenues.Similarly, earlier this month, News UK made much of Times Newspapers having returned an operating profit of £1.7m, but the accounts reveal that it suffered a pre-tax loss.The company incurred further legal costs of £17.1m due to the activities that resulted from its post-hacking decision to set up the management and standards committee (MSC). About half of that sum has been indemnified by Murdoch’s other major conglomerate, 21st Century Fox.And the report carries an auditor’s note which stresses that “significant uncertainty” remains about the future costs relating to phone-hacking cases and the on-going cases involving “inappropriate payments to public officials”. The company’s “ultimate exposure” is impossible to gauge, it suggests.Taking into account those legal fees and other items, News Corp UK posted a loss of £75.5m before tax in the 12 months to June 2014, compared to £75.3m in the previous year.News Corp UK is owned by Murdoch’s US-based News Corporation, whose shares – reports the Financial Times – have fallen 16% in the past year, thereby under-performing the wider stock market.

This story looks at News Corp UK and the profit then loss it has made in the previous year. They made a loss due to the decline in print media (news papers) and due to all the scandals that they have been involved in over the years. However I think that News Corp making some sort of a loss was inevitable, as they have their own newspaper and as newspapers are declining means that their business would've made a loss at some point.