Market Overview

Murdoch Jr. Walks Away From BSkyB

It was revealed on Tuesday that News Corp (NASDAQ: NWSA) Deputy COO James Murdoch is leaving his role as chairman of UK pay-TV company British Sky Broadcasting (BSkyB).

According to the Wall Street Journal, this is just the latest fallout following the ongoing phone hacking scandal, not to mention the alleged police bribery at NWSA's British newspapers.

39-year-old Murdoch will hand over the reins to nonexecutive director Nicholas Ferguson with immediate effect, though Murdoch will remain on the board as a nonexecutive director himself. NWSA owns 39.1% of BSkyB.

The scandal seems to have very long legs, with much of the Murdoch Empire crashing down around the father-and-son team. They might be a long way from the poverty line, but it is fair to say that the last twelve months has hurt Rupert Murdoch, a man known for his successes in the years before that.

The News of the World newspaper closed after 168 years because of the phone hacking scandal, though few Brits were mourning the loss of an institution, rather dancing on the grave of a publication that has squared up against moral decency again and again.

James Murdoch's handling on the situation has obviously severely damaged his candidacy to take over when his father eventually retires, something that at one time was considered a formality.

On March 29, Miller Tabak published a research report stating that NWSA may be forming a national sports network to leverage current distribution and offer more to advertisers. All media majors need to have significant sports rights in order to deliver a full array of demographics to advertisers, and sports continue to be the consistent way to deliver male viewers.

"The auspicious timing of this News Corp. development (which has not been officially announced by the company) means that News could continue to be a serious contender to retain LA Dodgers' TV rights when its current deal expires; the $2 bn sale announcement of the Dodgers yesterday is possibly one catalyst, as a long-term lucrative TV rights deal, or even the creation of its own RSN (regional sports network, like the Yankees' YES Network), will be necessary to fund that purchase. News' Fox currently has Dodgers rights, and should be expected to continue to compete for rights. "

Posted-In: News Legal Management Best of Benzinga

 

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