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Murdoch loses US satellite chief

Rupert Murdoch was vowing yesterday to continue his quest to conquer satellite television in the United States in spite of the surprise resignation late on Thursday night of Preston Padden, the head of his US Sky Broadcasting business.

Mr Padden had been leading negotiations to seal a $1bn (pounds 620m) joint venture with EchoStar Communications, a small Denver-based satellite broadcaster. The deal, unveiled in February, was designed as Mr Murdoch's path to launching a fully fledged Sky service in North America.

Mr Padden's departure is another sign, however, that the EchoStar arrangement may be in terminal trouble. Earlier this week, the company revealed that it had missed a deadline for a filing to US federal regulators of the details of the joint venture.

The delay had already sparked speculation that Mr Murdoch's News Corp and EchoStar were headed for divorce even before they had properly been spliced. The ostensible reason given for the hiccup was a disagreement over the kind of set-top decoder technology to be used.

But yesterday Mr Murdoch said he was not discouraged by events. Asked if he might abandon his US satellite ambitions, he retorted: "No way. We're going ahead, either on our own or with [EchoStar chairman Charlie Ergen] if he meets the terms of the contract."

Rumours have been flying that Mr Murdoch may already be seeking an alternative deal with Telecommunications Inc (TCI) and Time Warner, owners of the existing Primestar satellite service. Mr Murdoch is reported already to have met with Gerard Levin, Time Warner chief executive.

Any alliance with Time Warner is hard to envisage, however, in particular because Mr Levin's number two is Ted Turner. Messrs Turner and Murdoch had been horns-locked ever since the former was bought out by Time Warner, in particular over the refusal of Time Warner Cable to carry Mr Murdoch's fledgling Fox News Channel in New York City.

Mr Padden was said to have quit News Corp over the EchoStar deal and in particular because of personal disagreements with Mr Ergen. Mr Murdoch meanwhile said he was surprised and saddened by his resignation. "We want to keep him. We think he is a terrific piece of manpower."

News Corp's putative deal with EchoStar had met with furious opposition from others in the broadcast business and even hostility on Capitol Hill. Already, Mr Murdoch had lost a battle to persuade lawmakers to alter US copyright laws.