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.”
Ferguson led the Board during a period of strong growth for the company, including the transaction to bring together the Sky businesses across Europe.
Murdoch has been a Director of the company since February 2003 and previously served as Chief Executive from November 2003 to 2007 and as Chairman from 2007 to 2012. Martin Gilbert has been appointed as Deputy Chairman, with Andrew Sukawaty taking over his former role as Sky’s Senior Independent Director.
Nicholas Ferguson said: “It’s difficult to find the right time to step down from chairing a great company and working with an outstanding Board and management team. I joined the Board 12 years ago, in 2004, meaning that I have been with Sky for nearly half its life. When I became Chairman in 2012, I wrote in the Annual Report that I would stay on long enough to ensure continuity. The then virtually new Board is now seasoned and bedded in. We have completed major international acquisitions in Germany and Italy; they are running to plan and we have first-class management in place. Sky continues to grow impressively, to innovate with wonderful products and to serve its customers to the highest standard. So now is the right time for me to step back. I am sure that the company will continue to prosper under the leadership of Jeremy supported by James and the Board.”
James Murdoch commented: “I would like to thank Nick for his outstanding contribution to the Board over the last decade and more. I am proud to have been asked by the Board to serve as Chairman of Sky, one of the world’s leading pay TV companies. Jeremy and the team at Sky have done an outstanding job in building a dynamic and successful company. As Chairman, I look forward to working with the Board and management as they continue to deliver a great service for Sky’s customers and create value for all shareholders over the years to come.”
Martin Gilbert added: “I would like to give the warmest thanks to Nick for the major contribution he has made to Sky. He has provided valuable leadership as Chairman and played a significant part in the company’s progress over many years. I am very pleased that James has agreed to succeed Nick. Having seen first-hand James’s contribution to and passion for Sky, the Board feels he is uniquely qualified to become Chairman. I am also pleased that Andrew Sukawaty, with his meaningful experience in public companies and in our industry, has agreed to serve as Sky’s Senior Independent Director.”
According to Sky, Murdoch brings significant media sector knowledge and experience through his role as Chief Executive Officer of 21st Century Fox. Before taking up his current position in 2015, he was Co-Chief Operating Officer of 21st Century Fox and previously served as Chairman and CEO, International. He was also Chief Executive Officer of STAR, the Asian satellite television group, from 2000 to 2003.
In announcing his resignation in April 2012, Murdoch said: “As attention continues to be paid to past events at News International, I am determined that the interests of BSkyB should not be undermined by matters outside the scope of this Company. I am aware that my role as Chairman could become a lightning rod for BSkyB and I believe that my resignation will help to ensure that there is no false conflation with events at a separate organisation.”
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.