September 20, 2012

Ofcom: Sky is ‘fit and proper’ to hold broadcast licence

Conduct of ex-BSkyB chairman James Murdoch 'ill-judged'
Sky: 'Our track record of compliance in broadcasting is good'

Broadcaster Sky was today found to be "fit and proper" to hold on to its broadcasting licence after its parent company was embroiled in the phone-hacking scandal.

Media regulator Ofcom carried out the review of Sky after News International was forced to shut the News of the World in the wake of the scandal.

Ofcom concluded that Sky was fit and proper to hold its licence although it said that BSkyB's former chairman James Murdoch's conduct as chief executive of News International repeatedly fell short of the standards expected.

Rupert Murdoch's News Corporation owns a 39% stake in BSkyB while James Murdoch, his son, was chairman of the broadcaster before he stepped down earlier this year in a bid to distance the company from the scandal.

Ofcom said there was no evidence that James Murdoch knew of widespread wrongdoing at the News of the World or that he was complicit in a cover-up.

However as a company director who has a duty to supervise, Ofcom was critical of Mr Murdoch's failure to uncover wrongdoings earlier.

It said: "We consider James Murdoch's conduct, including his failure to initiate action on his own account on a number of occasions, to be both difficult to comprehend and ill-judged."

James Murdoch

Sky welcomed the licence decision today and said Ofcom was right to conclude that it was a fit and proper broadcaster.

It said in a statement: "As a company, we are committed to high standards of governance and we take our regulatory obligations extremely seriously.

"As Ofcom acknowledges, our track record of compliance in broadcasting is good."

Ofcom said it was satisfied that it had considered all the relevant evidence but would consider any further information as it emerged.

James Murdoch apologised for his conduct in a letter to the Culture, Media, Sport Select Committee in March, when he said he should have "asked more questions, requested more documents and taken a more challenging and sceptical view of what I was told."

In relation to Rupert Murdoch, who was a director of News International until July, Ofcom said there were currently no grounds to conclude that he acted in a way that was inappropriate.

Ofcom also found no evidence that Sky was in any way involved with the wrong-doing alleged to have taken place at the Sun or the News of the World and said that its compliance record in broadcasting matters has been good.

News Corporation had intended to buy the rest of BSkyB but was forced to drop its bid as the scandal unfolded.

James Murdoch remains a non-executive director at Sky and an executive director at News Corp.