Independent Sky investors back Murdoch as chairman
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