Chisholm bows out of BSkyB on low note
Saturday 16 August 1997
The City voted with its feet, sending Sky's shares plummeting 7 per cent to 437p after Mr Chisholm warned the launch of digital television would knock profits.
At what was at times an emotional presentation, Mr Chisholm repeatedly bemoaned the fact that illness had forced him to step down, but said it would have been "irresponsible" for him to carry on. Likening the launch of digital to mountaineering, he said: "There is no point getting half- way up a mountain and saying `Look, I don't feel well'. I made the decision to go: it was the responsible thing for me to do."
But his regret at having to leave was always evident, and he paid tribute to his colleagues at the satellite broadcaster. "I have been very proud and delighted to be part of it all," he said. "If it hadn't been for my indifferent health I probably would have stayed on. I envy Mark Booth [his successor] enormously in having the charge to carry this thing forward."
Mr Chisholm, who announced in June that he and his deputy would step down at the end of the year, indicated that maintaining "spectacular" profits after the launch of digital would be unlikely.
"If we took the launch of digital and attendant costs and maintained profits, it would be spectacular." However, Mr Chisholm said, "It is our intention to keep this company in rapid growth."
City analysts pointed out that Sky's profits had been artificially inflated by a pounds 14m gain from Sky's withdrawal from British Digital Broadcasting, and a pounds 7.4m credit from satellite technology, written off at the time of the merger of BSB and Sky, but now reinstated.
Stripping out these exceptional items, underlying pre-tax profits came in at pounds 292m, below most analysts' expectations of around pounds 305m.
Followers of Sky were also disappointed that Mark Booth, the 40 year- old pretender to Mr Chisholm's crown and head of Rupert Murdoch's Japanese satellite operation JSkyB, was not taking questions at the presentation.
Paul Richards, media analyst at Panmure Gordon, said it would have been helpful to get an idea of Mr Booth's thoughts and the future format of the board.
Mr Richards said Sky's plans for the advent of digital were short on detail, and that the company refused to give details of marketing costs for the launch of the service. "A lack of real news about digital, combined with slightly underwhelming figures pushed the shares down," he said.
Mr Chisholm's ambitions for the company, which he inherited when it was losing pounds 14m a week at the time of the merger with BSB, were undimmed, despite his imminent departure. He said he was confident that Sky, which is taken in one in four homes, had the potential to reach 50 per cent of the market.
Mr Chisholm denied that the resignation of the top two executives had been badly handled, saying that it was a "copy-book handover". However, there was no news on a full-time replacement for Mr Chance, who takes on a consultancy role after Christmas.
Questioned on his involvement with the company after Christmas, Mr Chisholm said he would stay on the board in a non-executive role, but would probably "do a few days a week at the office". But he joked that he would still have a hands-on approach to Sky, adding: "Most of my advice comes unsolicited, anyway."
He reserved his final words for the press, with whom he has had a love- hate relationship over the years. He said that his dialogue with the press had not always been "pleasant" but it had always been "honest", and that "lots of times" Sky had been "criticised with justification.
Sky's share-price has been under siege since Mr Chisholm and Mr Chance announced they were to bow out.
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