Sky is a 'fit and proper' broadcaster, chief insists

BSkyB's chief executive, Jeremy Darroch, has insisted that the pay-TV giant is a "fit and proper" broadcaster despite a Commons committee ruling that its leading shareholder, Rupert Murdoch's News Corporation, had exhibited "wilful blindness" over phone-hacking.

Mr Darroch, who was reporting record third-quarter profits, said Sky had a "strong corporate governance and culture" and this meant that the media regulator, Ofcom, should not revoke its broadcasting licence.

"Sky and News Corporation are different organisations," he said. "We strongly believe Sky's track record as a broadcaster is the most important factor in deciding whether we should hold a licence."

The Sky boss, who was speaking for the first time since James Murdoch quit as chairman a month ago, also said the board was "very clear in its support" for him to stay on as a non-executive director.

In a symbolic move, the younger Mr Murdoch was yesterday appointed as chairman of Sky's Bigger Picture committee in charge of its environmental and sustainability efforts.

However, his continued presence is controversial because Ofcom is looking at Sky's "controlling directors and shareholders" as part of its "fit and proper" test and could force News Corp to sell down its 39 per cent stake or even revoke its broadcasting licence.

Ofcom is also looking at Sky News after it admitted illegally hacking into emails over a 2008 story that exposed how "canoe man" John Darwin faked his disappearance. Mr Darroch insisted that the case was "justified in the public interest".

The Sky chief executive said he remains "focused on the business" and pre-tax profits for the nine months to March jumped to £899m against £705m a year earlier. Revenues rose 5 per cent at £5.1bn.

Mr Darroch said the pay-TV giant was boosted by its Formula One coverage as 159,000 new and existing TV customers upgraded to more expensive high-definition (HD) during the last quarter.

The HD increase was higher than the previous three months, which is traditionally stronger in the run-up to Christmas, and up on a year ago.

Sky only recruited a net 15,000 TV subscribers against 51,000 a year ago as consumers felt the squeeze.

However, Sky had greater success in offering customers other services such as broadband and phone, selling an extra 900,000 products. More than 3.2 million of Sky's 10.5 million customers take a "triple play" of TV, broadband and phone.

Sky shares rose 10.5p to 701.5p.