More than a decade after the phone-hacking scandal began, the Sun is still paying a high price for the behaviour at its former sister paper the News of the World. According to the most recent accounts, the Sun’s parent company News Group Newspapers (NGN) spent £54m on legal fees and damages in the year to July 2019, contributing to a record £68m loss.
Less than a decade ago, the two papers were making close to £100m a year in profits and the Sun regularly sold close to three million copies a day. But the combined impact of legal costs and the structural crisis facing the entire newspaper industry have severely weakened the position of the once unambiguous market leader.
When I covered the civil cases over phone hacking as a media reporter, it was clear that the primary goal of NGN lawyers was to minimise any contamination spreading to the Sun from the News of the World, which was closed in 2011 at the height of the scandal.
Opposing lawyers would repeatedly introduce evidence they claimed implicated journalists and executives at the Sun. In every case, NGN settled before trial, avoiding the embarrassing prospect of court appearances by the likes of Rebekah Brooks, chief executive of News UK, which owns NGN as well as the Times newspapers and radio stations including talkRADIO. Brooks was previously editor of the News of the World and the Sun and resigned as chief executive at the height of the phone-hacking scandal before returning in 2015.
The Sun’s parent company has always maintained that phone hacking was confined to the News of the World, and that senior executives were in no way involved. Brooks was acquitted of all charges at a criminal trial.
But total costs from hacking claims against the News of the World have already run into hundreds of millions of pounds. Even as each set of claims is settled, new cases emerge, with Prince Harry one of the latest to launch action.
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Yet the Sun’s difficulties cannot be blamed solely on phone hacking. In common with the rest of the newspaper industry, the tabloid is engaged in a struggle for readers and advertising revenue in a shrinking market.
At its mid-Nineties zenith, the Sun was selling four million copies a day and, as recently as a decade ago, it sold three million. But in January of this year, that figure fell to 1.25 million (a year-on-year drop of 11 per cent). And while its rival for the top spot, the Daily Mail, has also lost readers rapidly over the last two decades, and in particular the last 10 years, its decline has not been as steep.
On the current trajectory, at some point this year, the Sun will drop below the Mail and lose its bestseller status. Both titles will likely fall below the one million copy mark in 2021, though the Sun is on course to suffer the psychological blow of reaching that unwanted milestone first.
Though the phone-hacking scandal may have had some early impact on the Sun’s sales, the paper has suffered more from its exposure to the structural challenges facing all newspapers.
It has always had a slightly younger readership than the Mail, making it more susceptible to the social and lifestyle changes that have incrementally reduced newspaper sales. The Sun has also always depended more heavily than its broadsheet rivals on entertainment coverage, which has been upended by the ability of stars, great and small, to reach their fans and haters directly via social media.
Douglas McCabe, chief executive of Enders Analysis, says the combined impact of the phone-hacking scandal and digital competition has dented the aura of confidence that was so integral to the Sun’s brand.
“There is a perception, I don’t think that this is really just specifically about phone hacking... that the Sun’s voice, its optimism, its gung-ho pro-UK position just doesn’t feel quite as coherently confident as perhaps it once was. All these things will ultimately affect circulation.”
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So where does the Sun go now? According to the Guardian, a recent reshuffle at the top of the newspaper was in part aimed at re-energising its digital operation as it bids to compete with Mail Online. As well as appointing former Sun on Sunday editor Victoria Newton as editor-in-chief, the tabloid named its digital editor Keith Poole, who was originally recruited from Mail Online, as her deputy on the paper.
Mail Online, which is run almost entirely separately from the print Daily Mail, long ago built a vast digital audience, driven largely by free celebrity news that wouldn’t find a place in the newspaper. By contrast, the Sun website launched an ill-fated paywall, which, even with the addition of Premier League highlights, was unable to attract paying readers in the same number as the more upmarket Times.
Since abandoning its paywall in 2015, the Sun has made up lost ground. It regularly tops the comScore rankings for the total number of UK online readers each month, with more than 30m unique readers, though other figures from the Audit Bureau of Circulations show that Mail Online attracted twice as many global daily readers on average in 2019.
The scale of the challenge facing the Sun business remains huge. Retaining its place at the top of the newspaper food chain, in print or online, will be no easy task, and making money from digital audiences remains tough. With the millstone of phone-hacking claims around its neck, the Sun will struggle to turn a profit.
And yet there is no sign that its ultimate owner, News Corp, which is controlled by Rupert Murdoch, who bought the Sun in 1969, has any doubts about its immediate future.
“They believe in the brand, they believe there is something really meaningful for that brand to represent, not just to the existing audience but a new audience coming through too,” says McCabe. “To do that they are going to have to invest big. It’s almost like a startup phase, while also continuing to run the Sun as a newspaper and website.”
Don’t expect the Sun to disappear over the horizon anytime soon.