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James Murdoch resigns from BSkyB ahead of phone-hacking report

April 3, 2012 | 10:36 am

 

James Murdoch's resignation as chairman of satellite broadcaster British Sky Broadcasting comes ahead of what is expected to be a very critical government report on his handling of the ethics scandal at News Corp.'s British tabloids.

Murdoch, in announcing his decision, alluded to the ongoing investigations into accusations of phone hacking and payoffs to police, allegedly by the News Corp.'s News of the World and the Sun. News Corp. owns 39% of BSkyB and was on track to acquire the rest of the company last year until the problems at the tabloids derailed the deal. Murdoch resigned in February as executive chairman of News International, the media conglomerate's British publishing division.

"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," Murdoch said in a statement released Tuesday. "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 organization." Murdoch will remain on BSkyB's board of directors.

Murdoch, the youngest son of News Corp. Chairman and Chief Executive Rupert Murdoch, has been the focus of scrutiny over his handling of the crisis as head of News International. Last December he informed Parliament that he did not read an email from senior executives saying that the practice of phone hacking -- listening in on voice-mail messages left for celebrities, members of the royal family and even crime victims -- could be widespread. 

More than a dozen journalists and executives with News International have been arrested and questioned by Scotland Yard in connection with its investigation into the allegations of phone hacking and bribery. Police are also probing whether News International was engaged in a cover-up of criminal activity at News of the World and its sister tabloid, the Sun.

James Murdoch, who served as chairman of News International until stepping down from that post in February, has consistently denied any knowledge of widespread phone hacking at the papers then under his command. He insists he was led to believe that phone hacking was confined to one "rogue reporter" at the News of the World who was convicted and jailed for his offense.

James and Rupert Murdoch are expected to appear before Parliament again as part of an ongoing inquiry into possibly illegal activities at the tabloids. The damaging scandal exploded last summer when the Guardian reported that News of the World operatives had eavesdropped on voice-mail messages left for a missing teen girl who was later found murdered.

Murdoch's resignation as chairman of BSkyB does not mean the powerful broadcaster won't suffer collateral damage from the probe into the newspapers. British regulators may investigate whether News Corp.'s tabloid troubles have made it unfit to be part of BSkyB. Nicholas Ferguson, currently the deputy chairman, will succeed Murdoch as chairman of BSkyB.

Once seen as the heir to his father's kingdom, James Murdoch has been severely tarnished by the controversy, although he still holds a senior position at News Corp. as its deputy chief operating officer and focuses on its international television business.

"The story continues to not go away, and the feeling that somehow James was involved to a greater extent than he's willing to let on continues to persist," said Doug Creutz, media analyst with Cowen and Co. "He keeps falling back further and further backwards along the line of defenses in terms of his involvement in the Murdoch empire. There ain't a lot left."

RELATED:

News Corp. heir apparent James Murdoch resigns from London post

James Murdoch insists he was kept in the dark about phone hacking

James Murdoch blames subordinates in phone hacking scandal

 -- Dawn C. Chmielewski

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