BSkyB have seen a rise in share prices on the 1st May 2012 surrounding rumours of a sale of Murdoch’s stake in the company. The company is due to release its quarterly results today which will also affect the share price, but all the focus and speculation is surrounding Murdoch’s position with BSkyB in the near future and beyond.
Scandal has been surrounding Murdoch for the last few years – Satellite TV brought you news of the phone hacking developments and the Panorama expose documentary recently. It seems Rupert Murdoch has been under pressure to do the right thing and also under scrutiny from the powers that be for some time. Judgement day seems to be approaching and may radically change the face of BSkyB forever.
So what could happen to BSkyB?
The Culture, Media and Sport Select Committee have made claims that Rupert Murdoch is “not a fit person to exercise stewardship of any international company”. It also added that News Corp had “wilful blindness” when it came to the phone hacking scandal that forced the closure of the News of the World Sunday tabloid. Now Ofcom,who monitors and regulates the UK media has to decide whether to exert its power to revoke the license that BSkyB has that allows it to air television. It can decide to do this if it has evidence that any director or controlling shareholder is unfit to run a company. With current scandals and the outrage against Murdoch to investigate, Ofcom has also decided to consider a damning report compiled by MPs over Murdoch’s recent behaviour.
So what does this mean for Murdoch?
Simply he has to decide to sell his 39% share of BSkyB to allow the company to disassociate its activities from Murdoch’s, or risk the entire cooperation losing its valuable broadcasting licence. News Corp have already stated this week that they have taken huge steps to improve their governance, but it is too little too late to stop the knock on effect from the phone hacking scandal leading to the demise of BSkyB. Rupert Murdoch is losing control of his empire and the sale of his entire stake looks like the only possible option available. It will be devastating to Murdoch who had to back down last year in his plan to merge News Corp and BSkyB completely. Public and political pressure was too much for Murdoch to contend with and he had to withdraw News Corp’s bid to buy the remaining 61% stake in BSkyB.
How were the shares affected?
As a sale looks imminent BSkyB,who turned £1 billion profit last year, has seen interest in its shares. London saw a rise of 13 to 691p by the end of the day. New York saw a rise of News Corp shares of 32 to $19.93. When the Select Committee report is released, the shares will see more changes across the globe.
Rupert Murdoch clearly needs to cut all connections, financially and morally, with BSkyB to allow the company to continue broadcasting. With the appointment of an independant chairman, the company could flourish. Where Murdoch’s connections and reputation once built the company up, it appears to now be able to knock it back down.
Scandal has been surrounding Murdoch for the last few years – Satellite TV brought you news of the phone hacking developments and the Panorama expose documentary recently. It seems Rupert Murdoch has been under pressure to do the right thing and also under scrutiny from the powers that be for some time. Judgement day seems to be approaching and may radically change the face of BSkyB forever.
So what could happen to BSkyB?
The Culture, Media and Sport Select Committee have made claims that Rupert Murdoch is “not a fit person to exercise stewardship of any international company”. It also added that News Corp had “wilful blindness” when it came to the phone hacking scandal that forced the closure of the News of the World Sunday tabloid. Now Ofcom,who monitors and regulates the UK media has to decide whether to exert its power to revoke the license that BSkyB has that allows it to air television. It can decide to do this if it has evidence that any director or controlling shareholder is unfit to run a company. With current scandals and the outrage against Murdoch to investigate, Ofcom has also decided to consider a damning report compiled by MPs over Murdoch’s recent behaviour.
So what does this mean for Murdoch?
Simply he has to decide to sell his 39% share of BSkyB to allow the company to disassociate its activities from Murdoch’s, or risk the entire cooperation losing its valuable broadcasting licence. News Corp have already stated this week that they have taken huge steps to improve their governance, but it is too little too late to stop the knock on effect from the phone hacking scandal leading to the demise of BSkyB. Rupert Murdoch is losing control of his empire and the sale of his entire stake looks like the only possible option available. It will be devastating to Murdoch who had to back down last year in his plan to merge News Corp and BSkyB completely. Public and political pressure was too much for Murdoch to contend with and he had to withdraw News Corp’s bid to buy the remaining 61% stake in BSkyB.
How were the shares affected?
As a sale looks imminent BSkyB,who turned £1 billion profit last year, has seen interest in its shares. London saw a rise of 13 to 691p by the end of the day. New York saw a rise of News Corp shares of 32 to $19.93. When the Select Committee report is released, the shares will see more changes across the globe.
Rupert Murdoch clearly needs to cut all connections, financially and morally, with BSkyB to allow the company to continue broadcasting. With the appointment of an independant chairman, the company could flourish. Where Murdoch’s connections and reputation once built the company up, it appears to now be able to knock it back down.
