David Moir/ReutersJames R. Murdoch won the backing of British Sky Broadcasting’s board on Thursday to retain his role as chairman.
LONDON – British Sky Broadcasting, the satellite television company partly owned by Rupert Murdoch, said on Friday it would buy back some of its own shares and increase the dividend to compensate investors.
BSkyB, as the company is also known, said it planned a share buyback worth £750 million, or $1.2 billion, and would return another £253 million to shareholders through a final dividend of 14.54 pence a share.
BSkyB’s shares dropped more than 15 percent since News Corporation cancelled its bid this month for the 61 percent of BSkyB it does not own because of political opposition following the growing phone hacking scandal at one of News Corporation’s British tabloid newspapers. News Corporation, Rupert Murdoch’s global media empire, would participate in the share buyback, meaning its 39 percent stake in BskyB would not increase.
BSkyB also said its board unanimously voted in favor of keeping James R. Murdoch, Rupert Murdoch’s son and a senior executive at News Corporation, in his job as chairman of BskyB’s board. It was the board’s first meeting since News Corporation was forced to abandon its BSkyB bid.
“It was obviously a very full discussion,” BSkyB’s chief executive, Jeremy Darroch, said on a conference call. “At the end of that, the board was unanimous in its support for James to continue as chairman.”
Pressure on James Murdoch and BSkyB’s board to replace him had mounted ever since the appearance of new allegations of phone hacking at the British tabloid The News of the World, which fell under James Murdoch’s remit at News Corporation.
Mr. Darroch told the BBC in an interview on Friday that James Murdoch “got strong support” at BSkyB. He added that judging by his work at BSkyB, “he always acted with the highest degree of integrity.”
But some shareholders, including large British pension funds, have criticized BSkyB’s choice of chairman in the past, saying they would prefer a chairman who was not directly linked to the company’s largest shareholder, News Corporation.
There were signs that the phone hacking scandal also hurt other parts of the Murdoch media empire beyond The News of the World, which was shuttered.
The Times of London lost some subscribers in the immediate aftermath of the phone hacking scandal, James Harding, editor of the newspaper told the BBC on Wednesday. “We saw small number of people cancelled their digital subscription or print subscription,” Mr. Harding said. “Those have largely come back.”
BSkyB, which owns several satellite channels, said on Friday that operating profit for the full year that ended in June rose 23 percent to £1.07 billion from £872 million a year earlier. That beat the average £1.06 billion in profit analysts surveyed by Thomson Reuters predicted. BSkyB’s shares rose 0.5 percent in London on Friday.
“Recent hysteria may have affected the share price,” Richard Hunter at Hargreaves Lansdown Stockbrokers in London wrote in a note to clients. “But the underlying business remains defiantly strong.”
Article source: http://feeds.nytimes.com/click.phdo?i=d813281065faa0b3086117be7eb553dc
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