Ofcom: BSkyB 'fit and proper', James Murdoch questionable

By Michael Northcott, managementtoday.co.uk, Thursday, 20 September 2012 11:29AM

The broadcasting regulator has decided that BSkyB is a 'fit and proper' body to hold its licence, but has hung James Murdoch out to dry over the phone-hacking scandal.

It’s been a while since we’ve heard anything about the phone-hacking scandal, but the busybodies at Ofcom have been squirrelling away for a few months, trying to work out whether BSkyB is a ‘fit and proper’ holder of a broadcasting licence. Its verdict is ‘yes’, but it has taken the opportunity to nail News International’s former boss James Murdoch for his ‘failure’ to take action over the phone-hacking scandal, and his generally ‘ill-judged’ behaviour. 

In a report published this morning, Ofcom said that Murdoch’s conduct ‘repeatedly fell short of the conduct to be expected of him as a chief executive officer and chairman’. It clarified that it had investigated his conduct because of the Murdoch family’s control of BSkyB. Damning stuff for the heir to Rupert. But Ofcom did qualify its statement with: ‘the evidence available to date does not provide a reasonable basis to conclude that James Murdoch deliberately engaged in any wrongdoing.’ So at least it’s unlikely he’ll be facing any criminal charges.

The regulator did leave a veiled threat in its statement for the execs at BSkyB to mull over, however. It said that its checks on whether a licensee is fit and proper is ‘ongoing’, and added that if any other evidence comes to light, then it could mean its decision changes. Shares in BSkyB rose this morning because of the positive decision, but it would be an absolute catastrophe for News Corporation’s UK business if BSkyB lost its licence in future.

For James Murdoch, Ofcom’s decision is a mixed bag – he’s been cleared of any potential wrongdoing, but has had his management reputation reduced to tatters. Ofcom did note in its statement that the phone-hacking saga had kicked off before Murdoch took over as boss of News International, but its issue was with his handling of the crisis once it blew up in his face. 

This regulatory decision is probably good news overall for News Corporation, which has been trying desperately to draw a line under the whole dirty mess. Closing the offending title, the News of the World, and separating the publishing and entertainment arms of the business have been serious steps towards distancing the company from those ‘rogue’ phone-hacking journalists. The Murdochs will have their fingers crossed that the ongoing police investigations do not turn up any additional hard-to-explain bits of evidence…

This article was first published on managementtoday.co.uk