Phone-hacking scandal: News Corp costs rise to $340m

Figures released by News Corp today reveal the enormous ongoing financial impact of the News of the World phone-hacking scandal.

In the three months to 31 December the company incurred $56m (£35.7m) in costs relating to phone-hacking – bringing the total figure to more than $340m (£216.9m).

Lawyers at News Corp’s UK publishing arm News International have been settling claims with phone-hacking victims since the Sunday tabloid was closed in July 2011.

Payouts include singer Charlotte Church (£600,000), actor Jude Law (£130,000), former Labour deputy leader Lord Prescott (£40,000), Labour MPs Chris Bryant (£30,000) and Denis MacShane (£32,500)

Last month the company agreed to settle 130 High Court claims including that of Cherie Blair and  David Beckham's father and, according to The Guardian, it has agreed  out-of-court settlements on 143 of the 165 outstanding civil damages cases.

A hearing is scheduled at the High Court on Friday.

Despite the hacking payouts News Corp was able to report a strong set of results this morning with overall revenue up 5 per cent in the last quarter to $9.43bn (£6.02bn), while profits reached $2.38bn (£1.52bn).

The publishing division, which includes the company's newspapers and book publishing operations, saw operating income (profit) rise to $234m (£149m) for the quarter up 7 per cent year on year from $218m (£139m).

The company said the increase was in part down to increased contributions from the UK newspapers, which benefitted from the launch of the Sunday edition of The Sun in February 2012.

News Corp is currently in the process of demerging its publishing business into a new division called New News Corp. The costs of splitting up the business was $23m (£14.7m) in the last quarter.

Chairman and chief executive Rupert Murdoch said: "News Corporation's fiscal second quarter performance reflects our strong momentum. 

“Double-digit gains in our Cable and Television businesses, along with improvements in our Publishing segment, drove revenue and earnings growth even as we seized opportunities to invest in our core businesses for long-term and sustainable growth.

 "The strategies we executed against in the quarter continue to bolster News Corporation's competitive position and enhance our ability to benefit from global demand for content, especially sports programming.  As we make progress toward the proposed separation of our entertainment and publishing businesses later this year, I am confident in the future prospects for both businesses."

 

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