BSkyB: Murdoch’s Role As Chairman Could Be Gone By The End Of The Week

Up to now, the British pay-TV operator BSkyB (NYSE: BSY) has continued to endorse James Murdoch as its chairman — despite the abandoned bid from News Corp (NSDQ: NWS) and the many problems that have beset the executive in the wake of the hacking scandal at News International. But that could change by the end of this week.

The BBC is reporting that a “well-placed” source says that the board is concerned that Murdoch is too busy “fighting the fires” at News Corp to devote the time needed to BSkyB.

“We would not be pre-judging the guilt or innocence of James Murdoch or of News Corporation in asking him to stand aside,” the BBC quoted the source saying. “But it really is difficult to see how he can play a full role as chairman”.

It’s important to note, however, that even if shareholders as Murdoch to step down, it might not be permanent, but only until the current problems die down. Shareholders have stood by Murdoch up to now because of his strong track record from when he was CEO of BSkyB.

We have reached out to BSkyB for comment for this story and have yet to get a response.

For the moment, it looks like the time requirements on the chairman’s role could be ramping up: Ofcom may end up lodging an inquiry into whether BSkyB is “fit and proper” to hold a UK broadcasting license. That inquiry would not be related directly to anything that BSkyB itself has done, but because of News Corp’s 39 percent shareholding.

The BBC says that a likely successor to James Murdoch at BSkyB would be Nick Ferguson, a non-executive director at the broadcaster and pay-TV provider, who has taken up that role when Murdoch has had to recuse himself during News Corp ownership negotiations.

Murdoch, in his role as head of European operations and deputy chief operating officer for News Corp, will be appearing before the Commons Committee on Culture, Media and Sport to answer questions from MPs about the hacking scandal at News International — an issue that started with tabloid News of the World and has now spread to the upper reaches of executive management and other bodies such as the Metropolitan Police.

He will be appearing on the same day as his father, CEO Rupert Murdoch, and Rebekah Brooks, who had been chief executive of UK publishing division News International until she resigned last Friday.

James Murdoch is facing heat over how much he really knew about illegal events that were going on. When he originally testified in an original investigation in 2009, he claimed to know nothing, a position he has kept. Meanwhile, colleagues like Les Hinton, who ran News International at the time of the hacking problems and also claimed ignorance of what was going on, has resigned.

News Corp’s attempt to buy the 61 percent of BSkyB that it did not already own was abandoned last week, just as MPs were preparing to pass a motion to block the bid after the hacking scandal started to spill out of control and raise questions of too much media control by one single company that was not necessarily a “fit and proper” owner.