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Tue April 3, 2012
James Murdoch Steps Down From BSkyB
Originally published on Wed April 4, 2012 2:01 pm
DAVID GREENE, HOST:
In Britain, scandal has plagued the Murdoch family and its News Corp. media conglomerate. And today, another blow. Under pressure, Rupert Murdoch's son, James Murdoch, is stepping down as chairman of British Sky Broadcasting, also known as BSkyB. This occurs against the backdrop, of course, of the phone hacking and police bribery scandal that has focused heavily on two Murdoch tabloid newspapers. NPR's media correspondent David Folkenflik has been covering all of this and he joins us now to sort this out. Good morning, David.
DAVID FOLKENFLIK, BYLINE: Good morning, David.
GREENE: So, we've been following all the twists and turns of this scandal for a long time. Tell us about this development - James Murdoch steps down. Why does this matter?
FOLKENFLIK: Well, this matters, in part, because if you think about it, it's symbolic for the company, on one hand. BSkyB is the heart of the present and the future of News Corp. - that is television, broadcasting, entertainment and content - as opposed to the past, which is the newspapers, the base of News Corp. which has gotten it into this whole mire in the first place. News Corp. was intending to take BSkyB over last summer. It owns the 40 percent stake in BSkyB. And that was stopped cold by the scandals - that was suspended. This is an attempt, of course, by News Corp., by James Murdoch himself, to remove himself as a lightning rod, as he put it in his own statement, for attention on that very question.
GREENE: So it's getting the Murdoch name, which could be, I guess, a distraction, out of the television side of things.
FOLKENFLIK: That's right.
GREENE: Well, what does this mean for News Corp. as a whole? I mean, does this change the, sort of, dynamic of the scandal, speaking broadly?
FOLKENFLIK: Well, right now there's an independent agency called OfCom in Britain, which is reviewing, not - instead of reviewing whether News Corp. should take it over, reviewing whether News Corp. is a fit and proper, a minority but controlling owner of BSkyB. That's a huge source of revenue for them. And there's also these questions about James Murdoch and the company's response to the scandal in the first place. You know, James' testimony before Parliament, over the course of recent months, has come into deep, deep doubt and suspicion. A parliamentary committee is expected to review - to release a report in a matter of days, that's supposed to express whether they have skepticism towards it or discount it entirely. His credibility has been badly damaged. The corporation's credibility has been damaged, in part because there's been belief of a cover-up, which was testified to by two of his lieutenants. And there's this real question about what his future's going to be.
I think what happens now is that he's, in a sense, been removed from day to day management of BSkyB. The release today said that he would continue on as a corporate director. But the real question now is, you know, he's the number three executive at News Corp., would he be allowed to succeed his father as chairman? That, to me now, looks like a proposition very much in doubt.
GREENE: And just remind us, David, James Murdoch, I mean, has - what was his involvement in some of the original hacking allegations, you know, at the tabloids?
FOLKENFLIK: Well, he came on as a chairman of the British newspaper arm after most of the hacking allegations are said to have taken place. But in 2008 he participated in paying off a target of hacking, that's now been described by some of his former lieutenants and executives, as an effort to cover this up. And there's been a question of how candid he was with investigators, with members of Parliament looking in to this when they were asking him for information about this in subsequent years.
GREENE: And briefly, David, I guess one thing that people in this country wonder is if this whole scandal has had any effect on Murdoch's companies here in the United States - I mean, notably Fox TV?
FOLKENFLIK: There's been no allegations surrounding Fox TV or Fox News, or for that matter, the American newspapers, of any substance. There is a question, however, about a special unit involving computerized cards for pay TV subscribers, and that have - could have implications across the globe for News Corp.'s pay TV units.
GREENE: All right, that's NPR's David Folkenflik, updating us on the phone hacking scandal in Britain. Thanks so much, David.
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GREENE: And you're listening to NPR News. Transcript provided by NPR, Copyright NPR.