As James Murdoch surely knows by now, corporate dramas don’t merely play out in the boardroom. Unfortunately for him, they also unfold in the vast media landscape his family’s various businesses have helped shape. Rightly or wrongly, millions of Britons now perceive him as the incompetent manager who allowed widespread hacking to take place under his watch as executive chairman of News International. Others are less generous, viewing him, as one politician put it, as “a mafia boss running a criminal enterprise.” Hoping to spare News International from his apparent toxicity, Murdoch stepped down from that role on Feb. 26. So it wasn’t altogether surprising when news broke this morning that Murdoch—until today the chairman of British Sky Broadcasting (BSkyB)—would be exiting that role, too. You can’t say he isn’t a team player: the scoop went to BSkyB’s very own Sky News Channel.
In a letter sent to staff of the company, Murdoch said the company’s well-being was more important than him keeping his position. “In light of the continuing intensity and volume of commentary around past events at News International, I want to ensure that the interests of BSkyB should not be undermined by matters that ultimately have nothing to do with it,” he wrote. “In these circumstances, I’m aware that my role as chairman could become a lightning rod, so this is now the right time for me to step aside.”
Murdoch Jr. served as chief executive of BSkyB between February 2003 and December 2007, at which point he took on the role of chairman. Today’s resignation will help calm the nerves of investors who have grown increasingly wary of him—and how his links to the phone-hacking scandal might harm the company’s reputation moving forward. In November, around a fifth of BSkyB shareholders opposed his re-election as chairman at the company’s annual meeting. News Corporation, the parent company of News International, owns a 39% stake of BSkyB. Rupert Murdoch has long sought to control the entire firm. Nicholas Ferguson, BSkyB’s current deputy chairman and one of Britain’s most respected private equity bosses, will succeed Murdoch. It’s a move that suggests the company is keen to repair its relationship with outside investors.
Murdoch’s resignation comes ahead of a series of events and reports that could undermine his reputation further—and at the very least will have cable news channels looping footage related to phone hacking. Ofcom, the government-approved regulating authority for broadcasting and telecommunications, launched an inquiry in January that will assess whether BSkyB should still hold a broadcasting license following revelations in the wake of the phone-hacking scandal. If the company fails Ofcom’s fit and proper test, officials could force Rupert Murdoch to reduce his 39% share in the company.
Elsewhere, the parliamentary committee probing the reporting practices at News of the World will publish its findings imminently. Given the Murdoch family’s track record with that committee, it may not be pretty. In July Murdoch testified before that committee and apologized for what had taken place at News International under his watch. But he denied knowing that hacking extended beyond one rogue reporter. In September, though, former NotW attorney Tom Crone contradicted Murdoch’s testimony, telling the panel he was “certain” he had informed Murdoch of an e-mail indicating that phone hacking was more widespread. Colin Myler, the former editor of the NotW, backed Crone up. Based on those statements, the committee decided to recall Murdoch to the inquiry, where he was smeared as a “mafia boss.” (The infamous foam attack on Rupert Murdoch—and Wendi Deng’s bold response—also took place before the committee).
The third and final element that may explain Murdoch’s departure is the ongoing Leveson inquiry into media ethics. In recent months, the inquiry has led to spectacular revelations and exposed the cozy relationship between police in the U.K. and editors at some of the country’s biggest tabloids. On March 8, former Metropolitan police commissioner Ian Blair testified that Scotland Yard had loaned a horse to ex-News of the World editor Rebekah Brooks on the same day he shared a meal with her. Witnesses have also testified that Lucy Panton, the former crime editor at NotW was told by a news editor to “call in all those bottles of champagne” to get inside information from former counter-terrorism chief John Yates about a terrorist plot. Just today Panton dismissed the talk of champagne as “banter,” but testified that Yates had attended her wedding.
Champers aside, sources close to the inquiry have told Reuters that Rupert Murdoch will be called before the committee. His appearance will, no doubt, resurrect questions about how much the Murdochs knew. In recent weeks, questions regarding what James knew of what went on at News International have been submerged by horsegate and other eye-catching headlines. After extracting himself from the British arm of the family business, he probably hopes to keep it that way.