In­de­pen­dent Sky in­vestors back Mur­doch as chair­man

The Daily Telegraph - Business - - Business - By Christo­pher Wil­liams

JAMES MUR­DOCH nar­rowly won the sup­port of the ma­jor­ity of in­de­pen­dent Sky share­hold­ers to re­main chair­man of the com­pany as he tar­gets it for takeover as CEO of 21st Cen­tury Fox.

At Sky’s AGM just over half of the votes not con­trolled by Fox were cast in favour of Mr Mur­doch’s reap­point­ment. There was no prospect of him be­ing di­rectly ousted given Fox’s 39pc share­hold­ing. How­ever, Mr Mur­doch has faced City crit­i­cism over his dual role in the deal and calls to stand down if he could not at­tract sup­port from most in­de­pen­dent Sky share­hold­ers.

At 51.5pc Mr Mur­doch’s vic­tory among in­de­pen­dent share­hold­ers was slim, but rep­re­sented an im­prove­ment on last year when the ma­jor­ity voted against his reap­point­ment.

The shift in part re­flects a change in Sky’s share­holder base since Fox made its £11.7bn bid to buy out the rest of the share­hold­ers last De­cem­ber. City in­sti­tu­tions have sold shares and US hedge funds have built up large stakes in the hope of mak­ing a swift profit when the deal is com­pleted.

The shares have been trad­ing at an in­creas­ing dis­count to the £10.75 of­fer price amid fears that the Mur­doch fam­ily will be thwarted again by the phone hack­ing scan­dal, sex­ual ha­rass­ment al­le­ga­tions at Fox News or po­lit­i­cal op­po­si­tion. The Com­pe­ti­tion and Mar­kets Author­ity this week launched a six­month in­ves­ti­ga­tion of the deal’s im­pact on me­dia plu­ral­ity and broad­cast­ing stan­dards. The watch­dog said it will look at the po­ten­tial for greater Mur­doch in­flu­ence over Sky News and the po­lit­i­cal agenda. The in­quiry is also ex­am­in­ing “stan­dards of in­tegrity and ac­cu­racy” at the fam­ily’s news­pa­pers, which are still suf­fer­ing the fall­out from the phone hack­ing scan­dal. A High Court hear­ing this week heard al­le­ga­tions that se­nior Mur­doch news­pa­per ex­ec­u­tives de­stroyed ev­i­dence.

James Mur­doch came through what was po­ten­tially Sky’s last AGM be­fore join­ing the Fox em­pire, as the com­pany re­ported rev­enue and earn­ings growth for its cru­cial first quar­ter, which in­cluded the start of the foot­ball sea­son.

On a con­stant cur­rency ba­sis over­all rev­enues across its Euro­pean op­er­a­tions were up 5pc to £3.3bn. In the UK, Sky’s big­gest mar­ket, sales were up 4pc to £2.2bn, driven by price rises, the re­turn of Game of Thrones and the com­pany’s push into the mo­bile sec­tor. The fig­ures in­cluded items such as mo­bile hand­set sales and the block­buster May­weather vs Mc­Gre­gor box­ing match, which brought in around £30m.

Earn­ings be­fore in­ter­est, tax, de­pre­ci­a­tion and amor­ti­sa­tion for the quar­ter were up 11pc to £582m, boosted by the de­ci­sion to ac­count for new set-top boxes as cap­i­tal spend­ing rather than an op­er­at­ing ex­pense.

Sky said the ef­fect was small and that rev­enue in­creases and a rel­a­tively flat cost base played a big­ger role. Costs are due to rise mod­estly soon as a new Ger­man foot­ball rights deal kicks in. Sky is also gear­ing up for the next Premier League auc­tion at the end of the year. Chief ex­ec­u­tive Jeremy Dar­roch said the earn­ing fig­ures had “par­tic­u­larly pleased” Sky “against the back­drop of pres­sure on con­sumer spend­ing and lower spend on UK TV ad­ver­tis­ing”.

The shares ended the day at 926.5p, up 1.4pc.

In the UK, Sky sales rose 4pc to £2.2bn, driven by price rises, the re­turn of Game of Thrones, above, and a push into the mo­bile sec­tor

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