LONDON — Sam Chisholm, one of Rupert Murdoch’s most trusted lieutenants, has resigned as chief executive of British Sky Broadcasting, the satellite TV powerhouse he built virtually from scratch over the past six years.
He will be replaced at the end of this year by Mark Booth, currently chief operating officer of Murdoch’s Japanese venture, JSkyB.
The reason for Chisholm’s exit was given as ill heath, although he will remain as a director of BSkyB.
“Running BSkyB has been a most wonderful experience and very stimulating, but in the manner of these things it has also been extremely demanding,” he said. “It is no secret that I am an asthma sufferer and my doctors have advised me that I should not take on the next stage of BSkyB’s development.”
Murdoch, whose News Corp. owns 40% of BSkyB, said: “Sam Chisholm is unquestionably one of the best executives I have ever worked with. I’m really sorry that he has to step down and I’m very glad he is staying on the board of BSkyB.”
Rumors of Chisholm’s departure had been circulating for days in the financial markets. Chisholm himself described these reports as “rubbish” only two days ago. But the resignation announcement was greeted without surprise by local analysts.
BSkyB’s stock price dropped 21-1/2 pence, closing at £566-1/2, but this had more to do with a big dive across the board by London shares than by the news about Chisholm.
“He’s 57 and he had to go sometime,” said one analyst. “For the last seven years he created the business and it’s no surprise that he’s handing over to someone else for the second phase of BSkyB’s development.”
The only raised eyebrows came with the appointment of Booth to replace Chisholm, ahead of BSkyB’s highly touted deputy chief exec David Chance. But Chance’s background is in marketing, and observers suggested that Booth had been brought in because of his negotiating experience with big rights owners such as the Hollywood studios.
One figure not in the frame was Elisabeth Murdoch, Rupert Murdoch’s 29-year-old daughter who is currently earning her spurs as head of BSkyB’s programming.
Booth, a 40-year-old American, is described by people who have worked closely with them both as a complete contrast in style to the ferocious Chisholm. “Mark’s much more benevolent and much younger,” said a friend.
Booth made his name running MTV Europe in its earliest days, when he worked for the late Robert Maxwell, and ended up successfully suing the Maxwell pension fund for about $5 million. He joined the Murdoch empire via Foxtel in Australia before moving to JSkyB.
Chisholm, a New Zealander, first rose to prominence as head of Kerry Packer’s Nine Network in Australia, before being poached six years ago by Murdoch to run his fledgling British satellite TV company, Sky, which was then struggling in a life-or-death battle with rival satcaster BSB.
Chisholm’s first big job was to crunch Sky and BSB together in what can best be described as a hostile merger to form BSkyB. Most of BSB’s staff were fired in a brutal round of bloodletting, with Chisholm’s abusive and bullying management style well to the fore.
His rudeness and hostility became legendary among TV execs and journalists, but so did his talents as a fearsomely bold and effective deal-maker. Among his greatest coups was the renegotiation of BSkyB’s Hollywood output deals following the merger, and then the soccer pact which really launched BSkyB on the road to its present dominance of the British pay-TV scene.
The past year has been a more frustrating one for BSkyB, with the failure of its attempt to expand into continental Europe, first through an aborted deal with Bertelsmann and Canal Plus, and then through a similarly fated pact with the Kirch Group. There were growing rumors that the relationship between Chisholm and Murdoch had started to cool.
BSkyB has delayed the launch of its proposed digital package in the U.K. until next spring, and is waiting to hear in the next two weeks whether its consortium with Carlton and Granada will be awarded a license for digital terrestrial broadcasting.