James Murdoch becomes chairman of Sky, renewing buyout talk

AP News
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Posted: Jan 29, 2016 11:00 AM
James Murdoch becomes chairman of Sky, renewing buyout talk

LONDON (AP) — James Murdoch will become chairman of European broadcaster Sky, a move that will renew speculation that his family's media empire will try to take over the company, in which it already has a stake.

The 43-year-old is the second son of tycoon Rupert Murdoch, whose family assets include The Wall Street Journal, Fox News and the 20th Century Fox movie studios.

James Murdoch will succeed Nicholas Ferguson four years after resigning from what was then known as BSkyB amid the phone-hacking scandal.

"James' deep knowledge of the international media industry and his passion for supporting Sky's ongoing success will make an even greater contribution to our business in the future," said Jeremy Darroch, group CEO.

James Murdoch served as CEO from 2003 to 2007 before holding the position of chairman from 2007 to 2012. But while briefly in charge of British newspapers for Murdoch family interests, he was tainted by the phone-hacking scandal that forced the closure of the tabloid News of the World in 2011.

The scandal shocked Britain and though James Murdoch denied any involvement, the furor provided a setback to the man seen as vying for control of the empire with his siblings.

The outcry that followed the scandal has largely died down since then, following the conclusion of an inquiry into the behavior of the media, and after several attempts to prosecute journalists on bribery and other charges failed to secure any high-profile convictions.

The acquittal of Rebekah Brooks, a protege of Rupert Murdoch, on charges related to phone hacking signaled that James would be restored, said Claire Enders of Enders Analysis and a longtime Murdoch family watcher.

"When she was acquitted, that was the 'go' button," Enders said. "It didn't take more than five minutes for him to get the ... job at Fox."

Once Brooks was re-established to a top spot in Murdoch's media empire in London, it became a question of "why ever not restore James to the top of the business concern that he has been very largely responsible for over 13 years since he joined as CEO," Enders wrote in an email.

James Murdoch became CEO of Twenty-First Century Fox last year after his father began preparing to hand over aspects of his empire to his children. Coming back to Sky shows that his return from exile is now complete, Enders said.

"The fact that he was appointed as Sky CEO at 31 in 2003 showed that his father was confident in him and more so than the other children," Enders said.

But James Murdoch's move will also fan rumors about Sky's future ownership. Shore Capital analyst Roddy Davidson said it is likely to "rekindle speculation regarding 21st Century Fox's plans for its 39 percent stake."

The announcement came as Sky reported first half results in the highly competitive U.K. television and broadband market. Analysts like Charlie Huggins of Hargreaves Lansdown lauded the company for its strongest growth in 10 years in its retail customer base, but noted that profits would be hit as the company absorbed 630 million pounds ($900 million) per year of additional Premier League costs.

Sky plc serves 21 million customers across five countries: UK, Ireland, Germany, Austria and Italy.