Ian Darby: Brands must hope Sky can survive the News Corp carnage
By Ian Darby, campaignlive.co.uk, Thursday, 21 July 2011 12:01AM
The scars left by the News International scandal will take a long time to heal. Arrests, high-profile resignations and News of the World's Captain Cash losing his job.
It's enough to stir a yearning for a return to a more innocent era. When on-air gaffes, such as the Sky "smash it" incident, were considered the height of infamy.
BSkyB, too, could be forgiven for wishing it could turn back the clock to January. The Richard Keys/Andy Gray sexism row was a mere squall compared with the full-on NI storm, which, though no fault of its own, has already had an impact on Sky due to News Corporation's 39 per cent stake, though its shares appear to be rallying.
Sky risks becoming tarnished by the Murdoch association. Reports suggest at the time of writing that this will be mitigated by its non-executive directors asking James Murdoch to stand down, at least temporarily, as the company's chairman while he focuses on cleaning up the NI mess.
Advertisers should hope that the scandal that has engulfed NI doesn't spread to Sky. News Corp's decision to drop its takeover bid should also help. This will have the knock-on impact, at least in the parochial world of airtime sales, that its team can focus on its customers rather than fretting about the consequences of a sales merger with NI's Wapping team.
Some advertisers might have worried about the opportunity for News Corp to engage in conditional selling across its print and TV assets, but that threat is now gone and Sky remains a successful business that continues to offer some compelling content, especially sport, to advertisers.
Sky has a strong leadership team under the chief executive, Jeremy Darroch, and is tipped to deliver strong results at the end of July. Its commercial team, led by the Sky Media managing director, Nick Milligan, is also well-respected and is strong in the market without being too dominant. Its 20 per cent share of TV ad revenue shouldn't frighten advertisers, even though Ofcom finds itself under pressure from Ed Miliband and other politicians to decide whether News Corp is a fit and proper body to own a UK broadcasting licence.
News Corp will face pressure to relinquish its stake in Sky, but given the range of options available to advertisers and the rise of the likes of Google and Facebook, brands are less likely to be concerned with perceived Murdoch dominance than politicians who sense blood. It's also encouraging for brands craving choice that Sky's direct rival Virgin Media has sprung to life with some ballsy Murdoch-related marketing activity this week.
If anything, this shows how important it is for Sky to keep its eye on the ball in terms of delivering new products and solutions for both viewers and advertisers.
Ian Darby is the deputy editor of Campaign. Jeremy Lee is away.
This article was first published on campaignlive.co.uk
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