By JULIA WERDIGIER and ALAN COWELL
Published: April 3, 2012
LONDON — BSkyB, the British satellite broadcaster partly owned by the Murdoch family, said on Tuesday that James Murdoch had resigned as chairman to shield the company from the phone hacking scandal engulfing his family’s British newspaper outpost.
BSkyB said Nicholas Ferguson, currently deputy chairman, succeeds Mr. Murdoch as chairman. Mr. Murdoch continues to be a non-executive director of the company.
“I am aware that my role as chairman could become a lightning rod for BSkyB and I believe that my resignation will help to ensure that there is no false conflation with events at a separate organization,” Mr. Murdoch wrote in a letter to the BSkyB board which was made public by the company.
The Murdoch family has a roughly 40 per cent stake in BSkyB that it had hoped to expand in order to strengthen its hold on the British satellite television business. Along with its news division, Sky also operates lucrative sports, movie and general entertainment channels.
But as the hacking scandal within its British newspaper holdings gripped the nation last July, the family announced that it was withdrawing a $12 billion bid to buy complete control of the broadcaster — a major setback to its corporate planning and European ambitions.
Almost immediately, analysts began speculating about Mr. Murdoch’s tenure as chairman.
The news came only weeks after Mr. Murdoch resigned as head of his family’s scandal-ridden newspaper properties in Britain.
At the time, he said he would concentrate on his family’s lucrative television properties. He also said he would work from the New York headquarters of News Corporation, the global media conglomerate run by his father, Rupert Murdoch, who is chairman and chief executive of the company.
James Murdoch, 39, is Deputy Chief Operating Officer of News Corp., according to its Web site.
His resignation as executive chairman of News International, the British newspaper subsidiary of News Corp., came at a moment of intensifying scrutiny of the Murdoch tabloids at the center of the British hacking scandal, The Sun and the now-defunct News of the World.
The papers’ reporters, editors and corporate executives, including Mr. Murdoch, have been at the center of overlapping investigations by the police, Parliament and a judicial inquiry into a pattern of widespread phone hacking and payoffs to police and other public officials.
Britain’s regulator for the communications industry, Ofcom, said last month it was stepping up its investigation into whether James Murdoch was a “fit and proper” person to be part of the BSkyB board given the ongoing probe into hacking allegations at News International.
On Tuesday, Mr. Ferguson, his successor as chairman of BSkyB, said he thanked James Murdoch “for the outstanding contribution he has made” and said that “the board’s support for James and belief in his integrity remain strong. We understand his decision to step aside at this time."
Mr. Murdoch has been shedding titles since the scandal heated up.
Last month, in a continuing effort to distance himself from News Corporation’s British newspaper unit, Mr. Murdoch stepped down from the board of Times Newspapers Holdings. That entity was created to safeguard the editorial independence of The Times of London and The Sunday Times after the media conglomerate bought the British newspapers in 1981, according to public filings with the British government.
In March, the auction house Sotheby’s said in a filing with the United States Securities and Exchange Commission that James Murdoch would not return to his board position. Earlier this year he gave up his position on the board of the pharmaceutical company GlaxoSmithKline.