BSkyB CEO Jeremy Darroch Defends 'Unanimous' Board Support for Chairman James Murdoch
LONDON - BSkyB attempted to build bridges with investors Friday, announcing a £750 million ($1.2 billion) share buyback just weeks after political fallout from the phone-hacking scandal forced News Corporation to abandon its $12 billion takeover plans.
News Corp. will not increase its voting or economic stake in the company under the buyback arrangement, retaining a 31 percent stake and taking $444 million in cash instead.
The news came as BSkyB chief executive Jeremy Darroch unveiled another stellar performance at the pay TV powerhouse, posting full year revenues up 16 percent at $10.7 billion and operating profits up 23 percent to $1.63 billion.
Speaking on a conference call, Darroch dismissed suggestions that the phone-hacking scandal had tarnished BSkyB chairman James Murdoch, saying that the News Corp deputy COO - who was also charge of the News International newspapers - had the "unanimous" backing of the BSkyB board.
Darroch rejected suggestions that the ongoing criminal, judicial and parliamentary inquiries in which James Murdoch has already admitted serious errors and which are expected take over a year to conclude, would affect confidence in Sky, one of the most popular consumer brands in the U.K.
"Customers respond to what we offer them," he said, adding that he "refused to speculate on hypotheticals" about the possible range of outcomes for James Murdoch. "The job of a board is to keep a watching brief," he said.
The BSkyB boss pointed to the strong results as an example of how the business had been unaffected by the scandal. However, the results period predates the three-week period in which the phone-hacking scandal ignited, so any impact on consumers will not be visible until the next quarter.
Darroch admitted that some customers had cancelled their subscriptions because of revelations of phone-hacking at the News of The World - part of News International - but said it was only "a tiny handful."
The company said overall it had added 327,000 television subscribers over the year and said that customers were also flocking to its broadband products.
Sky also announced that it has picked up rights to all live Formula 1 motor-racing events in another aggressive acquisitions deal that sees the BBC drop its monopoly on the sport - now retaining rights for only half the tournaments it previously showed.
The deal, which saves the BBC a chunk of license fee payer's money at a time when its spending has been reigned in - will see Sky simulcast all tournaments broadcast by the BBC.