Sky investors back reappointment of chairman James Murdoch

Shareholders of Sky plc, the owner of Sky News, have voted to reappoint James Murdoch as chairman of Europe’s largest pay-TV broadcaster.

The motion to reappoint Mr Murdoch, a former chief executive of Sky, was passed with 78% of votes.

That included votes cast on behalf of 21st Century Fox, Sky’s largest shareholder, which is capped at 37.19% – and means that Mr Murdoch’s appointment was also backed by a majority of independent shareholders.

Some shareholder advisory groups had called on investors to vote against Mr Murdoch’s reappointment on the grounds that he is also chief executive of 21st Century Fox.

They claimed that, because Fox is currently trying to buy full control of Sky, he could not be a completely independent chairman of the latter.

Mr Murdoch won 51% of votes cast by independent shareholders at the annual general meeting – up from 49% last year.

There was a larger vote, however, against Sky’s remuneration report.

While just under 71% of investors voting did so in favour of the report, some 29% voted against approving the report. The vote is non-binding.

In a stock exchange announcement detailing the AGM vote, Sky said: "The board is pleased that the majority of resolutions have been passed with a high level of support from shareholders.

"The board notes the significant vote against resolution 3, the director’s 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."

During the meeting, one investor questioned both the terms of the deal and Mr Murdoch’s position as chairman of Sky, given his role as 21st Century Fox’s chief executive.

The shareholder, Hugh Lawson, said: "I think the board lacks independence. Fox is getting a sweetheart deal out of this and mainly I think it’s because of the lack of independence on the board."

In response, Martin Gilbert, Sky’s deputy chairman, pointed out that Sky’s board had formed an independent committee to evaluate the terms of 21st Century Fox’s takeover, which he said had met 11 times since the takeover approach was tabled in December last year.

The committee includes Mr Gilbert, Jeremy Darroch, Sky’s chief executive and Andrew Griffith, Sky’s chief operating officer.

The takeover, which is currently being scrutinised by the Competition and Markets Authority on public interest grounds having been cleared by regulators in all the other countries in which Sky broadcasts, values the whole of the company at £18.5bn.

Mr Gilbert was also asked about recent allegations of sexual harassment at Fox News, the flagship news channel owned by 21st Century Fox, which has claimed the jobs of a number of senior executives and personalities at the channel.

He told shareholders he was "pretty confident" that this would not have an effect on the CMA’s investigation.

Earlier, Sky reported what were regarded by City analysts as strong results for the first three months of its financial year.

Like-for-like revenues during the three months to the end of September were £3.3bn, up 5.5% on the same period a year ago, while EBITDA (earnings before interest, taxation, depreciation and amortisation) rose by 11% to £582m.

Mr Darroch said it was a strong start to the new financial year: "Against the backdrop of pressure on consumer spending and lower spend on UK television advertising, we were particularly pleased with our own EBITDA growth of 15% in our established business.

"We continue to see good demand for our products and services with 51% more new customers joining Sky than a year ago."

He said the first series of Sky’s home-grown drama Riviera achieved 20 million downloads, while Game of Thrones had become the most watched series ever on Sky.

He pointed out that in addition to Sky’s existing markets – the UK, Ireland, Germany, Austria and Italy – the company had just launched consumer streaming services in Spain and Switzerland.

Shares of Sky, which are valued at 1075p under 21st Century Fox’s takeover bid, were up 18p at 931.5p this afternoon.

(c) Sky News 2017: Sky investors back reappointment of chairman James Murdoch