Ofcom: Sky 'fit and proper' but James Murdoch is slammed

Sep 20, 2012

Damning personal attack by media watchdog 'stains' Murdoch Jr's career chances

OFCOM has ruled that Sky is a "fit and proper" company to hold a broadcasting licence, following its investigations into the satellite broadcaster in the wake of the phone hacking scandal at its sister company News International.

But the normally moderate media watchdog's lengthy personal attack on former chairman James Murdoch - questioning his "competence" and "attitude to wrongdoing" - could have lasting consequences for him.

Ofcom's probe into Sky was launched because it is 39.1 per cent owned by News Corp, the company which also owns News International. Today the watchdog stated that "on the evidence currently available and having taken into account all the relevant factors, Sky is fit and proper to hold its broadcast licences".

It also warned, however, that it would reopen its investigations "should further evidence become available".

The report is highly critical of James Murdoch - once seen as the heir to his father Rupert's media empire - for his failure to uncover the problems earlier.

There is no proof that he was “complicit in a cover up”, says Ofcom, but it goes on to note that he "repeatedly fell short of the exercise of responsibility to be expected of him" as the then-CEO and chairman of News International. This includes the way Murdoch - who stepped down from that role in February 2011 - handled allegations made in civil law suits against the News of the World.

Murdoch's conduct "including his failure to initiate action on his own account on a number of occasions" was "both difficult to comprehend and ill-judged". The regulator added that there were “questions regarding [his] competence in the handling of these matters, and his attitude towards the possibility of wrongdoing in the companies for which he was responsible".

The "fit and proper" ruling will come as a relief to News Corp, reports the Financial Times. The media conglomerate’s stake in BSkyB could have been threatened with partial sale had it been unable to win over the regulator. Sky's share price rose nearly one per cent in early trading this morning.

But, says The Guardian, it seems “absolutely clear” that had Murdoch not resigned as Sky chairman in April, he could not have remained in the position for five minutes after this report was published: "Most likely, he cannot regain that role either.”

The normal "conservative" and "measured" regulator's ruling has done "lasting damage" to James Murdoch, says The Daily Telegraph. "Ofcom might not have enough evidence to hold him to account for the phone hacking at the moment, but they think he is an inadequate chairman.

"Its words put an indelible mark on James Murdoch’s record, which will stain his chances of ever running a listed company again."

Nor can Sky afford to get "too comfortable" after today's ruling, adds the Telegraph. Ofcom's "sweeping powers to revoke the licence of any broadcaster that is not 'fit and proper' is an 'ongoing' test, it said, and it could come into play if the various police investigations into phone hacking and police bribery at News of the World turn up damning new evidence".

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