Satellite broadcaster BSkyB sought to distance itself from the controversy over phone hacking at its biggest shareholder yesterday, after lawmakers suggested the ties to Rupert Murdoch’s News Corp might endanger its licence.
Chief executive Jeremy Darroch used the publication of record nine-month results to stress BSkyB’s importance to Britain’s economy, as the country’s media regulator investigates whether it should hold a broadcasting licence in the light of the hacking scandal.
“I would emphasise it’s important to remember Sky and News Corporation are separate companies,” he told reporters. “We believe that Sky’s track record as a broadcaster is the most important factor in determining our fitness to hold a licence.”
A parliamentary report yesterday dropped a heavy hint to regulator Ofcom, which has stepped up its investigation into whether BSkyB is a “fit and proper” owner of a licence, by saying Murdoch was “not a fit person to exercise the stewardship of a major international company”.
Ofcom’s probe centres on BSkyB’s owners and officers. Rupert’s son, James Murdoch, a former chief executive of the satellite broadcaster, stepped down as chairman last month after he admitted mishandling the hacking scandal that has damaged the family name. He remains on the board.
“Sky employs around 19,000 people directly and the growth of our business generates a tax contribution of £1 billion (€1.22bn) every year,” Darroch said. “We’re proud of our contribution, which I think is second to none.”
Shares in Britain’s dominant pay-TV provider, which is in 10.5 million homes, rose 2% in early trading after months in which the uncertainty surrounding the Murdochs weighed on the stock, overshadowing the group’s solid trading during tough economic conditions.
BSkyB posted a 5% rise in nine-month revenue to £5.1 billion (€6.23bn), with earnings per share up 24% and adjusted operating profit up 15% in the period, during which Britain re-entered recession.
It has also started to sell standalone broadband and telephony to customers after previously insisting that the communications services could only be sold to customers who also paid for the more expensive television package.