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Murdoch, the first shoe falls

April 5, 2012

So James Murdoch has quit as chairman of BSkyB. That phrase implies he had a choice, which isn’t really true. The other investors in Sky – who, let us remember, own most of it – were getting nervous that under the continued scrutiny of Parliament and Ofcom the presence of Murdoch in the chair was, as they say, a material reputational risk. News Corp’s influence is hardly fading much, James remains a director (though that may change if the going gets much tougher), and Tom Mockridge, until recently head of Sky Italia and now chief of News International, is elevated to deputy chairman.

The much bigger question is whether James Murdoch’s position at News Corp will be fatally undermined? Everyone is waiting to see if the other shoe will fall? Cornered between allegations of malpractice or incompetence at News International his departure from that company tacitly admitted the latter. Soon he will now be heavily censured by Parliamentary Committees and probably criticised in Ofcom’s ‘Fit and Proper’ test.

But the worst, by far, is yet to come. Several very senior UK News executives have been arrested pending charges ranging from data theft, to bribing public officials, to conspiracy to pervert the course of justice. The cultish loyalty normally ascribed to News execs will melt as they try and plea bargain their way out of jail. Who knows how this story will end except that it certainly won’t be in the way Murdoch Senior or Junior would have predicted one year ago.




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