Rupert Murdoch’s BSkyB begins fightback at UK officials
Rupert Murdoch’s empire launched a fightback on Thursday after a mauling by British lawmakers, with satellite broadcaster BSkyBannouncing large profits and insisting it is fit to hold a licence.
A parliamentary committee said in a majority decision on Tuesday that Murdoch was “not a fit person” to run a global company because of his poor handling of the phone-hacking scandal at theNews of the World newspaper.
The findings were potentially damaging as regulators recently stepped up a probe into whether BSkyB, in which Murdoch’s US-based News Corp. holds a 39-percent share, is fit to hold a broadcasting licence.
But just a day after the committee’s report, BSkyB announced that group net profit jumped 19 percent to £689 million (845 million euros, $1.12 billion) in the first nine months of its fiscal year.
BSkyB Chief Executive Jeremy Darroch told reporters in a conference call it “remains a fit and proper” company.
“It’s important to remember that Sky and News Corporation are separate companies, we believe that Sky’s track record as a broadcaster is the most important factor in determining our fitness to hold a licence,” Darroch said.
The broadcaster also said it gained 78,000 subscribers in the three months to March 31, giving it a total of 10.55 million customers.
Public outrage over the hacking scandal forced News Corp. to abandon a bid to win full control of BSkyB last year and the broadcaster has continued to face pressure over the Murdoch dynasty’s involvement.
Murdoch’s son James resigned as chairman of BSkyB on April 4, saying he did not want to become a “lightning rod” for criticism over the hacking scandal, but he remains a non-executive director.
Both Murdochs were accused in the report by the British parliament’s influential culture committee of “wilful blindness” over the hacking scandal at the News of the World.
The paper closed down in July last year after it emerged it had illegally accessed the voicemails of murdered schoolgirl Milly Dowler.
In an email late Tuesday to staff at News International, the British newspaper division of News Corp., Rupert Murdoch admitted the damning MPs’ report made for “difficult” reading.
But he announced that an internal purge following the hacking scandal was now over and had found no wrongdoing at his British broadsheet titles The Times and the Sunday Times, apart from one incident that had already been disclosed.
He said a probe into The Sun was also over but did not disclose the results.
“For all of us — myself in particular — it is difficult to read many of the report’s findings,” the 81-year-old Murdoch said. “But we have done the most difficult part, which has been to take a long, hard and honest look at our past mistakes.”
The Times quoted Wall Street analysts as saying that the British report was of little significance to News Corp., adding that many investors would be happy to divest the firm’s British papers because “newspapers are a crappy business.”
News Corp. earlier said the comments on Australian-born Murdoch were “highly partisan” and pointed out that the cross-party parliamentary committee itself was split on whether to include the remarks about his fitness to lead.
Four Conservative committee members voted against the remarks but they were pushed through by five Labour members and one Liberal Democrat.
The BSkyB bid has also proved toxic for the British government.
Regulator Ofcom stepped up its investigation into the broadcaster last week after it emerged that the department of Culture Secretary Jeremy Hunt leaked information to News Corp. as the BSkyB bid was being assessed.
Hunt’s special adviser resigned and Hunt faces calls to resign.
James Murdoch meanwhile told a publc inquiry that he had discussed the bid with David Cameron, although the prime minister has insisted that he had done nothing improper.
– Dow Jones Newswires contributed to this report –