James Murdoch has been appointed chairman of pan Euro pay TV giant Sky TV. He will succeed Nicholas Ferguson. The move is not a great surprise given that Murdoch previously served as chairman from 2007 to 2012, having initially joined the board in 2003 and serving as chief exec from 2003 to 2007. James Murdoch also became chief exec of 21st Century Fox, which owns a 39% stake in Sky, last year. His father Rupert and brother Lachlan are both executive co-chairman of 21st Century Fox.
“Nick Ferguson, our chairman since 2012, will step down from the Sky board at the end of April after 12 years as a director,” said Sky Chief exec Jeremy Darroch. “The entire board offers its warmest thanks to Nick for his leadership as chairman and the major contribution he has made to Sky over many years. We’re delighted that James Murdoch has agreed to step into the role of chairman. James’ deep knowledge of the international media industry and his passion for supporting Sky’s ongoing success will make an even greater contribution to our business in the future.”
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The news comes as Sky reported improved operating earnings for the first half of its fiscal year and a growth in subscriber trends for the fiscal second quarter, ending December. The company, created when the UK’s BSkyB completed its acquisition of Sky Italia and majority interest in Sky Deutschland to create a European TV titan in a deal worth nearly $11 billion in November 2014, added 337,000 new customers in the latest quarter, ahead of analysts’ expectations. Operating profit for the first half of the fiscal year rose 12% to $1.07 billion (£ 747 million), compared with £667 million. EBITDA increased 8%. Earnings per share also beat analysts’ predictions, rising 10%.
The UK added 205,000 customers, marking the strongest fiscal second-quarter performance in 10 years for Sky. UK and Ireland growth included 146,000 TV subscriber additions. In Germany and Austria, Sky added 120,000 customers, and a more modest, but still robust, 12,000 new customers in the challenging market of Italy.
By end of year 2015, Sky could boast 21.48 million total retail customers, making it Europe’s biggest pay TV platform. James Murdoch’s appointment as chairman does bring up once again the possibility of 21st Century Fox taking full control of Sky. Those plans were originally scuppered in 2011 following the hacking scandal, which engulfed News Corp (the precursor to 21st Century Fox that also included Rupert Murdoch’s print and publishing interests) at the time and made their move to acquire full control of BSkyB politically unpalatable. Now, however, with a potentially more sympathetic Conservative government majority in place, and the elevation of James Murdoch a Fox takeover may be back on the table.
In June last year, shares in Sky surged, at one point rising 5% and topping the FTSE 100 leaderboard, after reports emerged that the Murdoch family had knocked back interest from both Vivendi and Vodafone for its 39% stake in the pan-Euro pay TV giant. Another theory mooted has been that the elder Murdoch would sell the stake- valued somewhere between $4 billion-$5 billion- to fund a new approach to acquire Time Warner after his initial offer was rebuffed. That interest appears to have cooled in recent months, however.
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