It was reported last week that Tony Ball was likely to leave the company next year to be replaced by Rupert Murdoch's son James. The news sent shares in BSkyB down by more than 2% as investors reacted unfavourably to the news.
If James Murdoch does take over from Ball, he will become the youngest chief executive running a FTSE-listed company. James currently runs News Corporation's Asian satellite television network Star TV, which he was made CEO of in 2000.
The offer from Murdoch senior to stand down is aimed to placate investors, who fear he is tightening his grip on the company by installing his son. Murdoch owns 34% of Sky. He has been chairman of Sky for three years and is known not to favour holding the position in his subsidiary companies.
Investors fear that with his son in place he will divert cash from Sky to his other ventures, and particularly US satellite firm DirecTV, instead of rewarding investors with higher dividend payments.
While BSkyB lost millions in its early years, it has now become a successful business, generating millions in cash for Murdoch.
Last week, it was reported that Ball and Murdoch senior were in discussions about Ball's future after speculation that the relationship between the two had deteriorated.
Ball's contact ends next June and it is seen as increasingly unlikely that he will remain at the company. Ball recently angered investors because the size of his pay packet and his generous share options.
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