Rupert Murdoch slashes value of newspaper empire

Rupert Murdoch's News Corp has scrubbed billions of dollars from the value of its newspaper publishing businesses and promised a big programme of cost cuts over the next year.

The company, whose UK titles include The Sun and The Times, plunged into the red after cutting $2.85bn from the value of its publishing businesses, as recorded on the company's balance sheet.

Although it did not spell out how it had calculated the write-down, it said that the Australian newspaper business was the biggest single contributor. Meanwhile, there was also an admission that the cost of dealing with the police investigations in the UK and resulting legal actions had now hit $224m, and that the loss of income from the shuttered News of the World was still weighing on the company's financial results.

While the cost of the hacking scandal continues to mount, last night's annual results also signalled that a defiant Murdoch family is determined to act as if the issue is receding into the past.

James Murdoch, still embroiled in the legal and political investigations into whether he helped cover up the scandal while running the UK newspaper business, appeared for the first time on a conference call with Wall Street to discuss the latest results, although he confined his remarks to answering a question about the Sky Italia satellite TV business.

James Murdoch is deputy chief operating officer, the No 3 executive at the company behind his father and chief operating officer Chase Carey.

Mr Carey addressed the weakness in the publishing business directly, saying that several divisions had new management that were looking at how to improve profits in the middle of a difficult environment for newspaper circulation and advertising revenues.

In the UK, where Tom Mockridge was appointed chief executive of the Murdoch titles 13 months ago, Mr Carey said he expected the company would be "moving into a very significant restructuring this year".