It was a big breakthrough for News Corp over Easter, with regulatory filings of its UK newspaper subsidiary showing the costs of the phone hacking scandal — now starring Prince Harry — crossed the £1 billion mark (almost A$2 billion at the current exchange rate).
The figure offers some context to the high-profile US$1.6 billion claim from Dominion Voting Systems (which starts hearings in the US next Monday), along with the claim from Smartmatic for US$2.7 billion.
Filed in London on the Wednesday before Easter, the most recent accounts of the company’s loss-making News Group Newspapers Pty Ltd — the corporate vehicle for The Sun and related assets — reported another year of “operating one-off charges” totalling £128.31 million (about A$240 million) related to the phone-hacking cases.
It includes a provision for the company’s best estimate of damages from continuing claims, including the most high-profile claim launched in 2019 by Prince Harry, in a major break, he now says, from the royal family’s reluctance to take the tabloids to court.
These most recent costs come on top of £133 million (A$248 million) reported over the past two years, and the £800 million (A$1.5 billion) earlier identified by Crikey in previous decades’ company reports.
Across its accounts, News Corp delicately refers to the scandal as “UK newspaper matters”. In its UK accounts, the hacking is politely termed “voicemail interception allegations” and police bribes as “inappropriate payments to public officials”. It breaks up the outgoings into the claimants’ legal fees and damages, its own costs (most of them for its own high-priced lawyers) and the costs of the management and standards committee set up in the wake of the scandal.
The names paid out are a who’s who of the UK, from the royal family down, all caught up in the story-gathering practices of phone hacking, police bribes and improper influence. The practices seem to go as far back as the 1990s, although were not publicly known until The Guardian broke the story in 2009. Two years later, the story exploded when it was revealed News of the World had hacked the phone of missing teenager Milly Dowler.
News is eager to draw a line under the claims, relying on last September’s deadline for cases in the current tranche of managed litigation. As a result, this year’s costs included both outgoings for the financial year ending July 3 2022 (about £47 million or A$88 million) and £53 million (A$99 million) provision for claims lodged shortly before the deadline.
The Sun, meanwhile, continues to fade. Back in 1992, it could brag that it changed elections (“It’s The Sun Wot Won It”). When the scandal broke just over a decade ago, it sold more than 3 million copies a day. In March 2020, when it last released circulation numbers, it sat at 1.2 million. The next year, the company accounts wrote the value of the masthead off to zero.
Now, best guess, it’s around 800,000, dropping behind the Daily Mail and falling. Like most tabloid papers, it hasn’t been able to transition to a digital subscriber base.
The UK hacking — er, “voicemail interception allegations” — marks a significant shift in large-scale damage actions against global media corporations. Before that, disputes were settled with what, in retrospect, seem quite modest defamation payouts — usually measured in thousands of dollars, occasionally in millions.
The Australian record for defamation remains the $2.9 million awarded to actor Geoffrey Rush in 2019 over allegations of inappropriate behaviour front-paged on The Daily Telegraph. It’s a record expected to stand for some time, as a result of the recent “public interest” amendments to defamation law. (The first major test of that defence seems set to arise in Lachlan Murdoch’s defamation action against Private Media, which owns Crikey.)
Now that it’s a billion here, a billion there, maybe we need a better measure for costs incurred in actions against News and Fox journalism. Let’s call it a Standard Murdoch Measure (SMM) at, say, $2.4 billion — the net worth, according to last month’s rich list in The Australian, of the eldest Murdoch child, Prudence McLeod.
Not all Murdochs are equal, of course. According to the rich list, Lachlan is worth about 1.5 SMMs, with a net worth of $3.6 billion, boosted by his investments such as the Nova radio network. Rupert, of course, is far from standard. According to Forbes, his net worth sits at around 11 SMMs.
On that measure, the hacking scandal looks set to fall just short of one SMM. Will it be Dominion or Smartmatic that sets the new record?
