Sky’s declaration of independence from Murdoch’s troubled empire

Jeremy Darroch, Chief Executive Officer of BSkyB. Picture: Getty/AFP
Jeremy Darroch, Chief Executive Officer of BSkyB. Picture: Getty/AFP
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PAY TV giant BSkyB has underscored its independence from its major shareholder, Rupert Murdoch’s scandal-hit News Corporation, amid suggestions that the satellite group’s broadcasting licence might be at risk.

Announcing record operating profits for the first nine months of the year, BSkyB chief executive Jeremy Darroch made a rare comment upon the on-going investigation by Ofcom, the UK’s media regulator. Despite NewsCorp’s 39 per cent stake in the business, BSkyB insists it “remains a fit and proper licence holder”.

“I would emphasise that it’s important to remember that Sky and News Corporation are separate companies,” Darroch told reporters.

“We believe that Sky’s track record as a broadcaster is the most important factor in determining our fitness to hold a licence,” he added.

Darroch went on to highlight BSkyB’s contribution to the UK economy, including billions invested in programming content. The firm employs about 19,000 people across the UK, including roughly 6,000 Scottish staff working primarily out of centres in Dunfermline, Livingston and Uddingston.

“The evidence shows that Sky serves UK audiences and customers well,” Darroch said.

“We are proud of our on-going contribution, which I think is second to none. We will keep doing our day job well, keep delivering and our record will speak for itself.”

His comments came the day after a committee of MPs declared by a majority vote that Murdoch was “not a fit person” to oversee a major international company. Regulators at Ofcom are examining that report as part of their investigation, but are not obliged to agree with its conclusions.

Ofcom has also launched a separate investigation into Sky News after the channel admitted that it had hacked the e-mails of individuals suspected of criminal activity. Sky News says it was acting in the public interest, and shared its information with police.

BSkyB is attempting to insulate itself from the phone hacking scandal that last year engulfed the News of the World and has since spread to other parts of NewsCorp’s UK publishing empire.

Murdoch’s son James, who oversaw the newspaper division from 2007 until earlier this year, stepped down as BSkyB chairman last month in an attempt to contain the damage. However, he remains a non-executive board member.

The on-going saga partly overshadowed the group’s latest financial performance, though the shares did advance by 1.5 per cent yesterday after the group posted record nine-month operating profit on the back of strong growth in broadband subscribers.

Revenues for the period to the end of March were up 5 per cent on the previous year at £5.1 billion, with adjusted operating profit 15 per cent higher at £908 million. BskyB added a net 78,000 households to its subscriber base in the first quarter of this year, taking the total to 10.55 million. However, demand for its main TV service slowed to just 15,000 new customers against 51,000 in the first quarter of 2011.

Nearly 160,000 added high definition to their package in the first three months of this year.