Stepping down has defused the risks posed by a report and the Leveson inquiry but may not be enough to get ahead of events
It was the sacrifice that James Murdoch hoped he would not have to make. BSkyB was a business he loved, a growing broadcaster in an otherwise pressurised industry, where he spent four happy years as chief executive in the middle part of the last decade. But in the end he concluded that he could not hang on as its chairman – because the media, politicians and regulators simply would not leave him alone.
This was a decision that Murdoch junior took, but it was not that long ago that he had no intention of stepping down from BSkyB. In comparison he was desperate to leave News International – home to the News of the World – the moment he relocated to New York at the turn of the year. The younger Murdoch had none of his father's enthusiasm or fingertip feel for newspapers: it was pay television first at Star in Hong Kong and then at BSkyB where he made his name.
There was little immediate pressure from the independent directors on BSkyB's board either: incoming chairman Nicholas Ferguson said "the board's support for James and belief in his integrity remain strong" in the company's statement. But advisers and friends of James Murdoch told him that if he wanted to have "options" he had to get in front of the events, which continue to threaten to engulf him. On top of the News of the World phone-hacking scandal, and the allegations of a cover-up – denied fiercely by Murdoch junior– this year alone has already seen a string of arrests at the Sun over allegedly corrupt payments to public officials.
Then last month came the re-emergence of pay-TV hacking accusations that were long thought dead, centred on the alleged activities of another one-time News Corp subsidiary, its encryption unit NDS, another business where James Murdoch was a non-executive on the board in the late 1990s and early part of the last decade. There is no evidence that the younger Murdoch knew about what is alleged to have occurred at NDS, but the fact that the usually sober Financial Times splashed the story across its entire front page a week ago demonstrates how the narrative of hacking has taken over all the reporting around News Corp and how he keeps being dragged in.
In addition, James Murdoch knew that a series of hazardous events immediately lay ahead. MPs on the cross-party culture, media and sport select committee were arguing as they tried to write up a report examining the phone-hacking scandal, in particular whether parliament was previously misled by News International executives. He had hoped to determine their thinking with a six-page letter published in March in which he said that while he took his "share of responsibility" for not uncovering wrongdoing at the News of the World earlier, he also "did not know about" and "did not try to hide" wrongdoing. It was not enough, and with the committee still split on a verdict on him, a final report was not expected until after Easter.
The second hurdle was James Murdoch's impending appearance at the Leveson inquiry – due in the week of 23 April, the same week as his father. It is enough for him to be fighting for his corporate reputation, but, in truth, that event too would have been judged by the same measure: whether James Murdoch could remain at BSkyB. Questioning at the inquiry has been inconsistent at best, but Murdoch will have seen enough of proceedings to know that he could have been tripped up, or forced again to give up the job he loved. Now, unencumbered by that, a man frustrated by the relentless personal criticism hopes to have a chance to "put his story across", according to one ally.
Somewhere around two weeks ago, James Murdoch concluded that the risk of an adverse committee report – or a poor showing at Leveson – was too great. It would be far worse to be forced to resign in the wake of either – he would probably be forced off the BSkyB board entirely and with no prospect of return. (Some too, will also point to Ofcom's "fit and proper" enquiry, but the reality, as BSkyB knows, is that the regulator's probe continues as long as Murdoch junior remains a director and News Corp a shareholder, the second of which is unlikely to change, except at regulatory gunpoint).
Yet, if this is the calculus, it is not certain whether his resignation will be enough, as Murdoch's own advisers concede. News Corp bosses have repeatedly tried to get ahead of events – by closing the News of the World, for example. But each time the hacking story has moved on. Its executives had also tried to create a firewall around the Murdoch family, but from Les Hinton to Rebekah Brooks they have been forced out and the shield is gone. Now it is James Murdoch who is gradually being forced into retreat, to the point where the business he runs within News Corp looks increasingly small. He hopes that he can rebuild his career from a lower profile at company number three in New York, but for the moment he is the last defence in front of his 81-year-old father in a scandal that seems to drag on and on.