May 8 (Bloomberg) -- Tom Mockridge, who led Rupert Murdoch’s U.K. newspaper unit during phone-hacking allegations, was named the head of British cable operator Virgin Media Inc., placing him in competition with his former employer.
Mockridge, who spent more than 20 years at Murdoch’s News Corp. media empire, in roles including the head of Sky Italia as well as European TV operations, will replace Virgin Media Chief Executive Officer Neil Berkett once the company’s takeover by Liberty Global Inc. is complete.
Liberty Global, the cable giant controlled by billionaire John Malone, is buying Virgin Media for $16 billion to expand in Europe’s biggest pay-TV market and take on British Sky Broadcasting Group Plc, in which Murdoch owns about 40 percent. Mockridge quit News International last year amid speculation he was passed over for the job as CEO of News Corp.’s publishing business, which is being spun off from its entertainment units.
“This is nothing personal,” Mockridge said of media headlines pitting Malone against Murdoch in a battle for U.K. pay-TV subscribers. Speaking in a phone interview, he characterized Malone and Murdoch as “two very successful men that respect each other immensely.”
Mockridge said in an e-mail when he resigned from News International that he wasn’t “comfortable” with the role offered to him amid the separation of the businesses.
“His appointment may look unusual because of his News International background, but when you look at his background in European TV it makes total sense,” said Alex DeGroote, a media analyst at Panmure Gordon & Co. in London.
Mockridge’s annual salary wasn’t disclosed. Current Virgin Media CEO Berkett makes about 750,000 pounds ($1.16 million) a year. Berkett, who has had the top job since 2008, will walk away with $86.8 million once the deal is completed. Shortly after Liberty Global agreed to buy the U.K. cable operator in early February, he announced he would leave.
Mockridge said his experience in working with consumer-facing mass-distribution companies will benefit Virgin Media. He also noted how fast Liberty Global has grown in Europe in a few years. Malone has been using Liberty Global to expand in Europe, where he has more than 18 million pay-TV subscribers.
Liberty Global CEO Mike Fries said the company isn’t viewing Virgin Media as a “turnaround” story. “It’s an opportunity for us to build scale and it will be felt in the U.K. and outside,” he said during the phone interview with Mockridge. “We won’t come in and fix anything, but figure out how successful the company can be.”
The Virgin Media acquisition gives Malone a “fantastic footprint” in the U.K., according to DeGroote, and significantly expands his European cable business, which already operates in countries including Germany and the Netherlands.
Liberty Global is expected to continue its strategy of European acquisitions and has been busy in recent weeks buying stakes in Dutch cable operator Ziggo NV.
Fries said the company’s acquisitions “pipeline is always full” and “our clear strategic objective is to build greater scale in Europe where we operate and in new markets.”
Fries said Mockridge, who he’s known for 15 years, was considered among a pool of internal and external candidates at Liberty Global and Virgin Media.
Mockridge “has a great track record of building business from scratch and managing a large organization,” Fries said. “He’s also worked in a conglomerate and in complex environments.”
Mockridge became CEO of News Corp.’s News International unit in 2011 as phone-hacking allegations piled up against journalists at its U.K. newspapers.
DeGroote said that Mockridge’s recent experience at News International “shouldn’t overshadow what he’s done for so many years in TV.”
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