Son rises at Rupe’s BSkyB

James takes top spot at Brit pay TV co.

This article was updated at 7:49 p.m.

LONDON — Rupert Murdoch-backed BSkyB confirmed late Monday that James Murdoch has been appointed chief executive of Britain’s largest pay TV company, risking a confrontation with shareholders.

The media mogul’s 30-year-old son will start work today replacing chief exec Tony Ball, who announced he was resigning in September.

James Murdoch was chosen by a four-member nomination committee headed by non-exec director Norman St. John Stevas.

Institutional investors led by the Assn. of British Insurers and the National Assn. of Pension Funds have questioned the selection process. Shareholders had opposed the appointment of Murdoch pere‘s younger son, fearing it could compromise the firm’s independence. There also were doubts about the depth of his experience.

Murdoch’s News Corp. owns 35.4% of BSkyB. James Murdoch will resign from the board of News Corp. and its technology subsidiary NDS. However, some still find the situation unacceptable.

Speaking on behalf of the Assn. of British Insurers, a sizable investor in the paybox, head of investment affairs Peter Montagnon said shareholders would protest at the annual general meeting on Nov. 14.

“They could vote James off the board as a non-executive director,” Montagnon said. “There’s also a lot of concern about reappointing Norman St. John Stevas.”

BSkyB’s board hopes to head off a shareholder revolt by appointing Lord Rothschild, an influential member of the Rothschild banking dynasty, to the board in the new role of non-executive deputy chairman.

Allan Leighton, the BSkyB non-executive director who is also Royal Mail chairman, will become head of the satcaster’s audit committee. The board also is expected to appoint another independent director.

Rupert Murdoch issued a release stating, “The board and I are pleased that the nomination committee has completed its task and it is unanimous in its conviction that James is the right man for this job.”

Both Martin Stewart, BSkyB finance chief, and Richard Freudenstein, the satcaster’s chief operating officer, were in the running for the job. It’s not clear whether they will ankle their posts.

James Murdoch has headed Star TV, News Corp.’s Asian pay TV service, since 1999. It claims about 300 million viewers across Asia and reported its first profit last year. He is the youngest chief executive of any FTSE 100 company.

BSkyB is capitalized at $20.6 billion, making it the 19th largest company in Blighty, with annual revenues of $4.8 billion.

BSkyB shares rose 3.7% on the London Stock Market to $11.12 on Monday before the announcement of James Murdoch’s appointment.