BSkyB chief executive James Murdoch was today handed the task of leading his father Rupert’s media empire in Europe and Asia.
Murdoch, who is 34, will take direct responsibility for the strategic and operational development of News Corporation’s television, newspaper and related digital assets in Europe, Asia and the Middle East.
He will step down as chief executive of BSkyB but take over his father’s role as non-executive chairman of the satellite broadcaster.
James Murdoch has been a director of Sky since February 2003 and its chief executive since November of that year. His father became a director of the company in 1990 and has served as chairman since 1999.
BSkyB is 39 per cent owned by News Corp. James Murdoch’s role as chief executive will be taken by current BSkyB finance director Jeremy Darroch.
The appointment of Murdoch as BSkyB chairman may raise concerns among some shareholders about best corporate practice, which recommends that a chief executive should not step up to become chairman of the same company.
However, BSkyB defended the move, given Murdoch’s “deep knowledge and understanding” of the strategic issues facing the company.
It added: “Sky has strong independent directors and we were quite clear that our overriding duty in selecting a chairman was to do what was in the best interest of the company and its shareholders.”
Mr Darroch joined Sky from retailer Dixons in 2004, where he held the position of group finance director.
Nicholas Ferguson, Sky’s senior independent director, said the changes ensured continuity of leadership at the satellite broadcaster.
He added: “Jeremy has played a crucial role in the company’s transformation. He is the first chief executive to be appointed from within Sky and is the unanimous choice of the board to lead the company’s continued growth.”
While BSkyB’s overall trading performance has been robust, the company is under pressure on other fronts.
In particular, BSkyB faces the prospect of having to sell down its 17.9% stake in ITV, which it acquired for £940 million last November, after the Competition Commission said it believed the holding operated against the public interest.
The Commission has been consulting on possible remedies. And Ofcom, the UK media regulator, is looking at BSkyB’s proposals to charge for the channels it plans to offer on Freeview, the free-to-air digital platform.