| LONDON, April 3
LONDON, April 3 James Murdoch's belated
acknowledgment that he had become a liability to satellite
broadcaster BSkyB was a rare admission of defeat by the
combative 39-year-old executive known for his self-belief and
Murdoch resigned on Tuesday as chairman of BSkyB, saying he
did not want to damage the company any further by the intense
scrutiny surrounding his role in a phone-hacking scandal that
has convulsed his father's media empire.
That it took him so long to come to what many had long
thought a logical conclusion was a measure not only of his
self-assurance and behind-the-scenes calculations but also of
his attachment to the British broadcaster.
"He will be bitterly disappointed," one executive who has
worked alongside Murdoch at Sky told Reuters. "He has a strong
emotional attachment to that company."
Murdoch first proved his mettle independently of the family
name at BSkyB, first as the youngest chief executive in London's
blue-chip FTSE 100 and then as chairman.
"I am proud of what we have achieved," he wrote in a brief
People who have reported directly to James say he is
decisive and leaves colleagues in no doubt about what he
expects. He likes to work with a small group of people whom he
keeps close and trusts.
That confidence inspires fear among many of those who work
for him. He used to keep a model of the Star Wars villain Darth
Vader outside his London office.
"When James was in the building, you could almost hear the
Darth Vader music," said a former senior staff member at News
International, the UK newspaper publishing division of the
Murdoch empire that became the focus of the hacking scandal.
"He's a scary man around the office."
But his stewardship of BSkyB won high marks from investors
and media professionals. Roy Greenslade, media commentator,
journalism professor and a former senior editor at Murdoch's Sun
tabloid said James Murdoch did not put a foot wrong at BSkyB.
"Most people would say that he's been an effective chairman,
a period of growing share price, and the irony of all this is
that it's got nothing to do with BSkyB."
Murdoch's appointment at the age of 30 as chief executive of
BSkyB, a business his father Rupert had been instrumental in
founding, sparked accusations of nepotism.
He arrived fresh from turning around News Corp's
ailing Star TV business in Asia but his previous business
experience was mostly limited to the music industry, where he
had had little financial success.
However, in his four years as CEO he turned BSkyB into a
powerhouse of British broadcasting, and transformed a national
media debate that had been dominated by a small elite centring
around public-service broadcaster the BBC.
Later, as chairman, James seemed to relish controversy,
following in the footsteps of Rupert - whom he called "Pa" -
with a series of sometimes blistering attacks on the BBC, which
he accused of distorting competition.
The executive who worked alongside James Murdoch, who asked
not to be identified while discussing his style, said Sky showed
the Murdoch ethos of feeling that 'everyone is out to get you'.
The firm behaved like a scrappy challenger company that under a
harsher light could be said to have a chip on its shoulder.
"You can't attribute that ethos to James, it came before,
but it certainly reflected his own approach," he said.
James's problems began when he stepped down as BSkyB CEO in
2007 and took on News Corp's operations in Europe, the Middle
East and Asia - including the British newspaper business, News
Executives at the UK publisher were at the time reeling from
the arrest and imprisonment of Clive Goodman, the royal reporter
on its best-selling Sunday tabloid the News of the World.
Within months of arriving, James was called upon to
authorise a large settlement to a hacking victim, soccer union
boss Gordon Taylor. That proved to be James's undoing.
When News International was forced last year by the weight
of evidence to drop its contention that phone-hacking was the
work of a lone, "rogue" reporter and admit that the practice was
widespread, questions focused on how much Murdoch knew.
In parliamentary hearings, lawmakers seized on the payment
to Taylor, calling it evidence of a coverup.
Unlike his father, James was no sentimentalist about the
newspaper business, and with pay-TV operations from Hong Kong to
New Delhi to Italy closer to his heart, he says he asked few
questions before agreeing to the payment. But the two senior
managers who arranged the payoff insist they had made Murdoch
aware there was a wider problem at the company.
They even provided an email trail that ended at Murdoch.
Murdoch, normally known for his swift grasp of detail, said he
had probably read the emails on his BlackBerry, as they had been
sent at the weekend, and had not scrolled all the way down.
Murdoch's role is now under scrutiny by multiple bodies
including the police, a parliamentary committee, a judge-led
inquiry and the British broadcasting regulator.
Under intense questioning in Britain's parliament together
with his father, the bespectacled James came across as
businesslike but arrogant, sometimes appearing pained at the
slowness of lawmakers to grasp his points.
The executive who asked not to be identified said this
approach had been part of the plan, to talk like a business
student to take the sting out of what were very hostile
questions. "He could hardly go in there swinging," he said.
With journalists, he is normally friendly but can quickly
become short-tempered when the conversation turns in a direction
he does not like.
As James Murdoch tries to focus on his new role as News
Corp's deputy chief operating officer, many are wondering
whether his withdrawal from Britain and the newspapers will be
enough to insulate him from further trouble.
"The power of sacrifice has been lost by the qualified
nature by which it has been made," says public-relations guru
Richard Levick, who has advised crisis-hit organisations from
the Catholic church to Arab governments. "Rather than cut off an
arm, they've been cutting off finger nails."
Levick believes Murdoch could do best by taking a break from
News Corp and going it alone, at least for a while. "I think
he's got lots of choices and I think he's a very wise
businessman. He doesn't need his dad's empire to succeed."