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James Murdoch Drops BSkyB Chairman Post

James Murdoch, son of News Corp. CEO Rupert Murdoch, stepped down as chairman of British Sky Broadcasting Group, the companies said Tuesday.

As head of News Corp.'s British publishing unit, James Murdoch has been a focus of investigations into the cell phone-hacking scandal that led to the closure of the company's British tabloid News of the World last year.

Fallout from the hacking scandal also included News Corp.'s decision not to pursue acquiring the stake in BSkyB it does not already own, a transaction financial analysts had been enthusiastic about.

James Murdoch had been seen as a potential heir to his fatehr's position as CEO of News Corp., but the scandal has tarnished his candidacy.

In a letter to the BSkyB board, James Murdoch said that "as attention continues to be paid to past events at News International, I am determined that the interests of BSkyB should not be undermined by matters outside the scope of this company." He added: "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."

Murdoch has been replaced by Nicholas Ferguson, who had been deputy chairman and senior independent non-executive director. Tom Mockridge, a BSkyB director, was appointed deputy chairman. Murdoch will continue as a non-executive director of BSkyB.

News Corp. released a statement on Murdoch stepping down at BSkyB.

"We are grateful for James Murdoch's successful leadership of BSkyB.  He has played a major role in propelling the company into the market-leading position it enjoys today -- and in the process has been instrumental in creating substantial value for News Corporation shareholders," said Chase Carey, president and COO of News Corp., in the statement. "We look forward to BSkyB's continued growth under the leadership of Nicholas Ferguson and [CEO] Jeremy Darroch and to James' continued substantial contributions at News Corporation."