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Last Updated: Tuesday, 4 November, 2003, 12:23 GMT
Q&A: Murdoch Jr takes BSkyB reins
Q&A
The board of BSkyB has brushed aside shareholder objections to appoint James Murdoch as chief executive making him the youngest boss of a FTSE 100 company at 30 years old.

Rupert Murdoch - James' father - is chairman of News Corp, which controls 35% of BSkyB, and is also chairman of BSkyB. Some institutional investors say the concentration of Murdoch names at the top is bad for corporate governance.

BBC News Online looks at the issues.

Is James Murdoch up to the job?

James' defenders say he successfully turned around Star TV, News Corp's Asian pay TV channel, when he was chairman and chief executive there.

But that's pretty much where his premier league corporate experience ends. Before Star, James had the reputation as the slacker in the Murdoch clan.

Analysts say there's no way he'd be in with a chance of the job if he wasn't Rupert's son.

But they also say that James is no fool.

News Corp is a business and BSkyB is a flagship enterprise. Murdoch Sr is not the type to wreck it for family indulgence. If levering his son into the top job is a risk, it is certain to be a well-calculated one.

The structure of BSkyB is devolved enough that it can probably run itself while the new kid learns the ropes.

So shareholders aren't happy. Can they do anything about it?

There's an annual shareholder meeting on 14 November where some kind of challenge to the appointment will be mounted.

Most of the dissenters say they don't object to Murdoch Jr personally, just to the selection process and what it says about corporate governance at BSkyB in general.

Institutional investors will probably oppose the re-election of some of the non-executive directors to the BSkyB board, saying they clearly haven't acted independently.

The strongest words will be had with Lord St John of Fawsley, senior independent director and head of the chief executive nominations committee.

And the other contenders for the top job? What happens to them?

There were three internal candidates: finance director Martin Stewart, chief operating officer Richard Freudenstein and marketing director Jon Florsheim.

They are all heavyweights, and they weren't happy about not making the shortlist - of one.

If they decide to go they would take a lot of experience and market confidence with them, so the Murdoch camp has to get down to some deft diplomacy.

Senior executives do not generally like being snubbed, nor do they like being passed over for promotion by the chairman's son. Especially when the chairman also refuses to step down as a compromise.

What about the punters? Will this all change what we see on TV?

Not immediately. BSkyB is Europe's biggest pay TV company and is doing well.

Subscriptions have doubled in the past five years and competitors in the cable TV market have struggled to keep up.

But expansion doesn't come cheap. The company has invested 2bn in its digital pay TV service and has more than 1bn in debts.

There's no reason why content should change but management could decide the time is right to boost cash by raising subscription charges.




SEE ALSO:
Murdoch 'best' for BSkyB job
13 Oct 03  |  Business
BSkyB chief Tony Ball quits
23 Sep 03  |  Business
Subscriber boost lifts BSkyB
12 Aug 03  |  Business


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