Murdoch buys time as Sky shares jump

 
Steve Dinneen
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JAMES Murdoch’s performance at the select committee may have bought him precious time with the board of BSkyB.

He has resisted pressure to step down as chairman of the broadcaster, with sources close to the Sky board telling City A.M. they would closely monitor his damage limitation skills. A major slip-up would almost certainly have prompted a request for his resignation.

But shares in Sky rose almost three per cent yesterday to 734p – up from a low of 669p in the wake of the collapsed News Corp bid.

Murdoch impressed his critics with his display, which combined an in-depth knowledge of the issues with the requisite amount of contrition. However, his long-term future at the company still hangs in the balance.

News Corp investors also appeared to view the hearing positively, with its shares jumping more than 5.5 per cent. Losses incurred as the crisis blew over the Atlantic to the US knocked an eye-watering $5bn from its market cap, ramping up pressure on its embattled boss.

However, Murdoch quickly scotched rumours circulating before the hearing that he would step down as chief executive.

His problems are far from over though. The California Public Employees’ Retirement System (CalPERS), a major News Corp investor, has hit out at the firm’s share structure, which gives the Murdoch family voting rights of around 40 per cent, despite holding just 12 per cent of its stock. It has called for an overhaul of the system, which gives Murdoch’s ‘B’ shares voting rights. The move comes amid growing anger in the US over the allegations levelled at News Corp.

The firm’s independent directors are also seeking legal advice from US law firm Debevoise & Plimpton to advise them over the newly formed Management and Standards Committee.