October 13, 2017

Quarterly revenues climb to £3.3bn at Sky as shareholders revolt over chairman James Murdoch’s re-election

Sky has suffered a twin-pronged shareholder revolt over pay and the re-election of chairman James Murdoch at the company’s annual meeting.

Nearly half of independent shareholders voted to oppose Murdoch’s reappointment amid concerns over his role as chief executive of 21st Century Fox, which is attempting to seize control of the 61 per cent of Sky it does not already own in an £11.7bn deal.

Some investors have expressed doubt that his dual roles allow him to represent the interests of independent investors, nearly half of which (48.4 per cent) opposed his re-election.

However, this was an improvement on last year, when more than 50 per cent opposed Murdoch’s reappointment.

When including Fox’s 39 per cent holding in Sky, 78 per cent of shareholders backed his reappointment.

The broadcaster said in a statement: “The board notes the significant vote against resolution three, the directors’ remuneration report, and resolution 12, the re-election of James Murdoch, and will continue to engage with shareholders to understand their views as part of its ongoing programme of engagement.”

On pay, Sky also suffered a bloody nose as 63.7 per cent of independent investors voted against the company’s remuneration report.

It follows a bumper payout for chief executive Jeremy Darroch, who saw his total annual pay packet more than treble to £16.3 million last year, despite annual profits being hit by the cost of broadcasting live Premier League football.

But the remuneration report was ultimately passed with 71 per cent of the vote when including Fox’s holding.

The takeover tilt by Fox, which is controlled by Rupert Murdoch, has been in the spotlight this week as Ofcom boss Sharon White and Culture Secretary Karen Bradley appeared before MPs on the Digital, Culture, Media and Sport Committee.

Bradley referred the bid to the Competition and Markets Authority last month for a full-blown investigation, with the competition watchdog set to report back with its final recommendations next March.

She said on Wednesday that the final decision on the deal would be based on evidence and not “personal emotion or feelings”.

White gave evidence to the committee on Tuesday when she told MPs the regulator found “extremely disturbing” behaviour at Fox News when looking at the bid.

The AGM followed a robust trading update from Sky, which said the popularity of Game Of Thrones helped it post surging revenues and customer numbers.

Sky said it added 160,000 new customers in its first quarter, which marks a 51 per cent rise on a year earlier.

The group shrugged off pressure on consumer and advertising spending to post a 5 per cent rise in revenues to £3.3 billion for the first quarter, while underlying earnings jumped 11 per cent to £582 million.