Murdochs could be stripped of BSkyB control in wake of phone hacking and bribery scandals
Ofcom will consider whether Sky’s chairman James Murdoch and his father’s News Corp are ‘fit’ to run the TV company
News Corp may have to sell much of its controlling stake in the broadcaster and James Murdoch could be forced to resign from BSkyB board
A dedicated team has been set up to investigate material emerging from the Leveson media ethics inquiry and Met Police investigations
The MailOnline understands that the chances of Sky going off the air are ‘non-existent’
By Martin Robinson
PUBLISHED: 09:11, 9 March 2012 | UPDATED: 16:44, 9 March 2012
Rupert Murdoch’s grip on BSkyB could be under threat after an investigation was launched into whether his company is ‘fit’ to run the TV giant in light of the phone-hacking and bribery scandals engulfing his newspapers.
Media regulator Ofcom has confirmed to MailOnline they will probe whether the media tycoon’s News Corp should hold a 39 per cent stake in Britain’s biggest broadcaster.
Mr Murdoch’s son James, chairman of BSkyB, could also be forced to resign and News Corp may have to sell the majority of its Sky shares if they fail ‘fit and proper’ tests.
It has been revealed today a dedicated Ofcom team has been in place since January to investigate material emerging from the Leveson inquiry, the Met Police’s investigations into phone hacking and allegations of illegal payments to police and public officials by reporters at The Sun.
However, sources say that the chances of Sky going off the air are almost ‘non-existent.’
The phone-hacking scandal already forced News Corp Chairman Rupert Murdoch to abandon his bid for full control of the hugely profitable BSkyB and now Ofcom could worsen the pain.
‘Ofcom has a duty under the UK Broadcasting Acts 1990 and 1996 to be satisfied that any person holding a broadcasting licence is, and remains, fit and proper to do so,’ the regulator said this morning.
‘New evidence is still emerging from hacking and corruption allegations. Ofcom is continuing to assess the evidence, including the new and emerging evidence, that may assist it in discharging its duties.’
James Murdoch has remained chairman of BSkyB, despite stepping down as executive chairman of News International, the British newspaper arm of Rupert Murdoch’s News Corp group, last month.
The 39-year-old quit to distance himself from the increasingly toxic phone-hacking scandal engulfing his father’s empire.
Instead he will focus on expanding Rupert Murdoch’s international TV businesses and will be based in New York, but any role with BSkyB could also be scuppered by this investigation.
BSkyB currently employs around 16,000 workers and in 2010 posted a profit of almost £900million.
‘Ofcom has written to, met and is in dialogue with the various authorities investigating the allegations. This includes the police, the relevant parliamentary committees and British MPs,’ Ofcom added.
The details of this probe has come to light in an FOI lodged by the Financial Times.
Papers show that the investigation, known as Project Apple, was discussed at a board meeting on January 24 and again in February.
In its September and November meetings Ofcom’s chief executive, Ed Richards, also spoke about subjecting BSkyB to a ‘fit and proper’ persons test but then early this year it was given the official name and a team to match.
If Ofcom decided James Murdoch himself posed a problem, his departure from the BSkyB chairmanship may solve the issue.
But if Ofcom were to give News Corp itself the thumbs down, a forced sale could follow.
However, that would be an extraordinary verdict against one of the world’s biggest media groups.
Ofcom says it doesn’t want to pre-empt police, public and parliamentary inquiries. But since the fit and proper test carries a lower burden of proof than a criminal conviction, it wouldn’t necessarily have to wait for long-running court cases to conclude.
It is understood that BSkyB has already drawn up a contingency plan for the succession to James Murdoch as chairman in case he is singled out for heavy criticism in an MPs’ report due at the end of the month.
Deputy chairman Nick Ferguson has been put on notice to take over from Murdoch, amid growing anxiety that the Sky chairman would not be able to survive an excoriating treatment from the Culture, Media and Sport select committee.
The board is understood to feel that while there is no immediate pressure to depose the chairman, any further damage to his reputation in the wake of the News of the World phone hacking scandal would make his position untenable.