Murdoch Minor Survives BSkyB Shareholder Revolt

17 November 2003

In the aftermath of BSkyB's annual meeting on Friday, few eyebrows were raised in the City of London at the ceremonial crowning of James Murdoch as the new chief executive of the News Corporation-controlled satellite broadcaster.

And to the disappointment of those who enjoy a good slugfest, the shareholder machismo of the past few weeks evaporated to little more than a few whines.

But a slow-burning fuse was lit when it came to light that former Sky ceo, the highly respected Tony Ball, will formally depart the company in May (seemingly of his own volition) with an estimated £10 million payout in return for a two-year non-compete agreement.

Full details of this were not disclosed to shareholders, chairman Rupert Murdoch telling them they must wait until a filing to the US Securities and Exchange Commission is published in “the next two or three weeks”.

But the non-compete deal could well be cosmetic. It has already been mooted that Ball will remain within the NewsCorp ambit -- possibly as executor of the group's acquisition of US satellite giant DirecTV.

Meantime, in a lower league, Murdoch minor survived a few half-hearted challenges to his appointment as Sky ceo, ably defended by Pop's penchant for sarcasm. At one point in the annual meeting Murdoch senior mockingly told one dissident shareholder: "You made a great impact, I can assure you."

Another was instructed that he should sell his BSkyB shares if he didn't believe in the "huge value we've created". BSkyB, Murdoch senior said, expected to declare its first dividend since 1998 by the June 30 close of the fiscal year.

As to the elevation of James and the corporate governance issues implicit in a father and son serving respectively as chairman and chief executive of a public company, Murdoch gave no ground. "There is no funny business," he growled.

"There is no conflict of interest in this ….NewsCorp founded this company. It's very proud of it. It's very important to News Corp that the value of its investment keeps increasing."

He could "fully understand the suspicion of possible nepotism with my son as a candidate, not to speak of the salivation of my newspaper competitors, so I refrained from taking any part in the process of selection."

But as one industry observer noted: "The NewsCorp chairman did not refrain from making his wishes very explicitly known to those involved in the selection process."

Data sourced from: The Wall Street Journal Online and Times Online (UK); additional content by WARC staff