Analysts reacted positively to the appointment of a new topper to BSkyB, Europe’s biggest paybox, following the news that topper James Murdoch is heading News Corp.’s activities in Europe and Asia.
Steve Liechti, a media analyst with Investec, described Jeremy Darroch, BSkyB’s new CEO who joined the satcaster as finance director in 2004, as “a safe pair of hands.”
He added that investors had confidence in Darroch, whose strategy is unlikely to be any different to Murdoch’s.
At Numis Securities, Paul Richards said, “We regard Jeremy highly and believe that he is inheriting a business in excellent shape.”
He added that Darroch’s background in retailing — he was group finance director at U.K. electronics giant Dixon’s — has been a significant asset for BSkyB as it evolved from a pay TV outfit to a broader operator providing broadband and telephony services.
That Murdoch, who took over as BSkyB CEO in 2003 despite accusations of nepotism from some investors, will remain on board as non-executive chairman — a role held by his father, Rupert — is a big plus, Richards added.
“Jeremy has played a crucial role in the company’s transformation,” BSkyB senior non-executive director Nicholas Ferguson said. “He is the first chief executive to be appointed from within Sky and is the unanimous choice of the board.”
Despite these ringing endorsements of the BSkyB topper, Darroch is unlikely to be such a colorful or outspoken character as Murdoch.
In Blighty, the view is that the younger of Murdoch’s two sons has done a good job running BSkyB in difficult times.
He has increased subscriber numbers — the paybox is in more than 8.5 million homes — established digital video service Sky Plus, and launched new initiatives including broadband and high definition.
But his biggest coup came a year ago when he surprised rivals by buying a 17.9% stake in ITV, Blighty’s biggest private terrestrial broadcaster, for almost $2 billion.
The move scuppered an ITV takeover bid from rival cable group NTL, subsequently relaunched as Virgin.
However, regulators are unhappy about the stake and may force BSkyB to dilute the holding or give it up entirely.