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James Murdoch is to become Chairman of Sky, succeeding Nick Ferguson, Chairman since 2012, who will step down from the Sky Board at the end of April after 12 years as a Director. Murdoch previously served as Chairman of the former BSkyB from 2007 to 2012, but resigned in the wake of the phone-hacking scandal at the News of the World newspaper and News Corp dropping its plans to take over the 61 per cent of BSkyB it did not own.
The move has increased speculation that 21st Century Fox will make a fresh bid to acquire the remaining shares in the pay-TV operator that it doesn’t already own.
Murdoch revealed in October 2015 that at some stage the company intended to take full control of Sky, some four years after it was forced to drop its plans.
In a detailed interview in the Hollywood Reporter (together with brother Lachlan) Murdoch noted that following the acquisition by BSkyB of its German and Italian counterparts and the separation of News Corporation’s print and TV assets, Fox had 40 per cent of an unconsolidated asset. “The Sky businesses, we’ve only just brought them all together into one big European platform. That integration is going really well. The company is moving at a very fast pace and has grown in value enormously. We’ve also been clear that over time, having 40 per cent of an unconsolidated asset is not an end state that is natural for us. Right now, we’re 100 per cent focused on supporting the company to get this integration going and get it done for the business to move forward, so there are no plans on the agenda right now,” he suggested.
“We believed that the proposed acquisition of BSkyB by News Corporation would benefit both companies, but it has become clear that it is too difficult to progress in this climate,” said then News Corp deputy chairman and president Chase Carey in a statement on July 13 2011. “News Corporation remains a committed long-term shareholder in BSkyB. We are proud of the success it has achieved and our contribution to it.”
CEO Jeremy Darroch made the announcement as the pay-TV operator announced its results for the six months ended 31 December 2015.
“The entire Board offers its warmest thanks to Nick for his leadership as Chairman and the major contribution he has made to Sky over many years,” said Darroch. “We’re delighted that James Murdoch has agreed to step into the role of Chairman. 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.”
The Board of Sky plc currently comprises 12 Directors, made up of two Executive Directors and 10 Non-Executive Directors. At least half of the Board of Directors are determined to be independent by the Board. The six independent Directors are Martin Gilbert (appointed Deputy Chairman), Andrew Sukawaty (appointed Senior Independent Director), Dave Lewis, Tracy Clarke, Adine Grate and Matthieu Pigasse.
Not all investors are happy, Royal London Asset Management, which owns £50 million (€66m) of Sky shares, believes Murdoch’s reappointment is “inappropriate” and a conflict of interest as he runs Sky’s biggest shareholder.