Murdoch steps into shadows at BSkyB

Exec takes lower profile in wake of scandal

When James Murdoch stepped down from his role as chairman of BSkyB last week, media outlets were awash with fresh speculation of the implications it would have on the future of the embattled exec and for News Corp., of which he still remains deputy chief operating officer and head of international. But while some paint the move as an abdication, others suggest it is merely a tactical retreat.

Chris Bryant, a U.K. politician and victim of the phone hacking scandal, says Murdoch is “running away with his tail between his legs.”

Yet instead of leaving entirely, Murdoch will continue to serve as a non-exec director of BSkyB, thus positioning himself for continued involvement, but on a less hands-on level.

Murdoch’s successor is Nicholas Ferguson, who was appointed director of the company in June 2004 and previously served as deputy chairman and senior independent non-exec director.

“It’s a faked transition,” says U.K. media analyst Claire Enders. “There is no doubt that News Corp. has thought of this as being a necessity, and clearly the Murdoch name is a problem at the moment.”

With the name gone, it’s likely that a Parliamentary report, due later this month, won’t need to expand as heavily on views of his stewardship.

“It’s good for News Corp., because ultimately it’s a family business, and the issues and allegations surrounding News Intl. and James Murdoch are all, in my opinion, going to go on for at least two years,” Enders says.

Further, the transition could give News Corp. another shot at taking over the 61% of BSkyB that it doesn’t already control, a bid that was thwarted last summer amid the hacking allegations.

“They want BSkyB to be seen as a normal business so that they (can) then make a normal transaction,” Enders says.

In the meantime, Murdoch, who is credited with Sky’s investments in new technology, will likely continue to focus on the brand’s activities on the Continent (Sky Italia, Sky Deutschland) and build up TV assets for News Corp., while developing a closer relationship with News Corp. chief operating officer Chase Carey.

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