James Murdoch Steps Down From BSkyB

Apr 3, 2012



From NPR News, this is ALL THINGS CONSIDERED. I'm Audie Cornish.


And I'm Robert Siegel.

More today in the British tabloid phone hacking and police bribery scandals. News Corp executive James Murdoch has resigned as chairman of the broadcasting giant BSkyB. He acknowledged to becoming a lightening rod for criticism.

As NPR's David Folkenflik reports, James Murdoch was once heralded as a leader at BSkyB but recent headlines have taken a toll.

DAVID FOLKENFLIK, BYLINE: James Murdoch's resignation today was preceded by his earlier departure as chairman of News International, News Corp's British newspaper division. BSkyB is a separate, publicly traded company and far more central to News Corp's bottom line. News Corp has the controlling minority stake in it of nearly 40 percent and, as Andrew Neil says, oh, is that a sweet investment.

ANDREW NEIL: It now throws off the billion pounds of free cash every year.

FOLKENFLIK: That's nearly $1.7 billion. Neil was executive editor of the Murdoch's Sunday Times and a founder of BSkyB. He says James Murdoch provided needed leadership in recent years.

NEIL: It is by far the most successful British media company there has ever been, so he gets kudos for doing that. But hacking tainted everything. And as it's moved through the tabloids into news international as a whole, now into BSkyB, it is likely to become more prominent in the workings of News Corp too.

FOLKENFLIK: Until last summer, News Corp was poised to receive the British government's approval to takeover all of BSkyB. That bid collapsed amid the tabloid scandal, a setback both for James and his father, News Corp Chairman and CEO, Rupert Murdoch.

Now, an independent regulator is reviewing whether News Corp is fit and proper enough to continue as proprietor of BSkyB.

ROY GREENSLADE: Like father like son, James Murdoch's now had his most humbling day until the next humbling day.


FOLKENFLIK: Media critic Roy Greenslade was a top editor at two British Murdoch newspapers.

GREENSLADE: News Corp has a credibility problem, has a trust problem. Media companies survive on credibility and trust. And I think that's a problem that they know hangs over them.

FOLKENFLIK: A turning point occurred last August when James Murdoch testified before a parliamentary committee that he had never been told of the scope of phone hacking at his newspapers and didn't realize that a large confidential payment to a victim was intended as a cover up. In a second round, he faced sharp questions from lawmakers such as MP Adrian Sanders.

ADRIAN SANDERS: I'm not a shareholder. But were I in your company, I'd actually expect you to know what was going on. And it begs the question, which do you think is worse: knowing what was going on but being willfully blind to it, or not knowing what was going on when you should have known what was going on?

FOLKENFLIK: Murdoch stressed just how large his portfolio was.

JAMES MURDOCH: This is a company of over 50,000 employees globally. And appropriately so, senior management in the company, myself included, rely on executives at various levels in the business to behave in a certain way.

FOLKENFLIK: That is not his fault because his team didn't tell him. But it subsequently emerged an executive had emailed him about it. His new defense, he hadn't read the key email because it was sent on a weekend. Murdoch's resignation comes only days before that very parliamentary committee is expected to release a caustic report.

NEIL: It wasn't meant to end like this.

FOLKENFLIK: Again, Andrew Neil.

NEIL: For Rupert Murdoch, it was meant to end with him presiding over the biggest and most successful global media company the world has ever seen and with the Murdoch siblings vying to take over from him, and, hey, presto, a dynasty would have been formed. Instead, never mind the chances of a dynasty. That isn't going to happen now.

FOLKENFLIK: Rupert Murdoch and his deputy, Chase Carey, today affirmed their support for the younger Murdoch's continued work at News Corp. David Folkenflik, NPR News. Transcript provided by NPR, Copyright National Public Radio.