James’s resignation has a lot to do with the BskyB share price. Having fallen by 26% last summer, BskyB – which has nothing to do with News International (the Times, Sun etc) other than the Murdoch family presence – has had what’s called a ‘share overhang’. This means that the question marks over James Murdoch relating to hacking and whether he knew it was going on or not at NOTW has hindered the BskyB share price advance.
By resigning James distances himself from BskyB and this will probably benefit the share price going forward – assuming there are no further damaging revelations at Leveson or indeed the Culture Committee.
It also means that if Ofcom finds that JM is not a ‘fit n proper’ person to run a broadcaster, BskyB will now be only tangentially affected as he’s no longer in charge – though still on the board.
Non Murdoch shareholders in BskyB – led by Blackrock and Legal & General – are less concerned with hacking and more with up and coming media issues. The bid for Premier league football rights are to be decided this year. These rights account for 1/4 of BskyB’s programming budget and there is a worry that someone new eg Al Jazeera (back with Qatari oil wealth) might come in and push up the price for the football rights as they did in France. That would eat into profits – especially if Al Jazeera actually secured the broadcast rights.
BskyB investors are also worried about the impact of Apple TV which is on its way and could prove to be a viable alternative to Sky’s pay TV offering
Away from the financial side of things, JM’s resignation denotes the all but complete withdrawal of the Murdoch family presence from the UK media scene. Rupert arrived with great fanfare in 1969, his anointed son arrived in 2003 and now they are both back in New York licking their wounds
Although Murdoch enemies will tell you that JM is not fully gone from the UK. He remains deputy COO at News Int (the papers) and on the board of BskyB.
The bid from News Corp to buy the rest of BskyB (it already owns 40%) is probably only parked for now until the heat dies down. So JM will have to settle for only running the biggest global pay TV company in the world from Manhattan instead of Isleworth!