LIVE ISSUE/SAM CHISHOLM AND BSKYB: The Sky chief who held the future of TV in his hand - Sam Chisholm took BSkyB from loss-maker to major innovator

When Samuel Hewlings Chisholm took over as the chief executive of

BSkyB back in the summer of 1990, the company was losing pounds 14

million a week. Seven years later he is preparing to relinquish his

autocratic grip on a turnover in excess of pounds 1 billion (Campaign,

last week).

A former floor-wax salesman, Chisholm represents the cutting edge of UK

TV, steering Sky through the mass introduction of multi-channel TV and

bringing it to the brink of the next era in the medium’s history:

digital.

The transformation has been such that Sky’s first few faltering steps

have almost been forgotten. Launched in a blaze of publicity in 1989,

Sky Television was slow to capture the nation’s interest. British

Satellite Broadcasting’s arrival in early 1990 added to the viewer’s

confusion about pay-TV and early adopters were divided between the two

rival systems.

But in 1990, Sky’s chairman, Rupert Murdoch, finally managed to secure

the services of Chisholm, a man he had previously tried to hire for his

US operations. Chisholm, a New Zealander, had been running Australia’s

Channel Nine for 15 years - taking it from a poor third position to

number one in the ratings war - when Murdoch persuaded him to come to

England.

Soon after Chisholm arrived, Sky joined forces with BSB in what was

supposed to have been a 50/50 merger, and Chisholm was handed a rag-bag

of channels, crippling weekly debts and a team in disarray. It was,

Chisholm later said, ’an amazing experience, an absolute nightmare’. The

problems were almost insurmountable.

Within months, the channel line-up was streamlined (Sky’s channels

forming the backbone of the new service), costs were cut, heads rolled

and Chisholm was making his clenched fist management style felt across

the company.

Yet Chisholm had established a sort of tribal loyalty at Sky’s Isleworth

headquarters. He stressed the need for teamwork and kept in constant

contact with senior executives (even holidaying with his deputy, David

Chance, so they could continue their work).

Once Sky’s internal management issues and on-screen positioning were on

track, Chisholm turned his attention to aggressive expansion. First came

the rights to Test Match cricket in 1990. But the most significant

advance came in spring 1992. In one of the most tenacious coups of the

decade, Sky secured the exclusive rights to the Premier League in a

bidding war against ITV and, at a stroke, rooted Sky in the lives of

millions of male viewers and kicking ITV where it hurt. While City

analysts are now questioning the soaring cost of the Premier League

tie-up - now pounds 160 million a year - back in the early 90s the deal

did the business. It was, Chisholm has said, ’the turning point of the

company. That brought it of age.’

Together with the movie deals that Sky and BSB had signed, the sports

package meant Chisholm had secured two of the most lucrative programming

genres. Outside movies and sport, Sky’s fare remained biased towards US

imports, punctuated by a few gems such as the Simpsons, the X-Files and

Murder One, which all got their first UK screenings on Sky.

In the early days, satellite dishes and cable seemed healthy contenders

to deliver this multi-channel package to the home. But Sky’s superior

marketing efforts and cable’s tardy development combined to place Sky in

pole position. Popular programming was the provenance of Sky, giving

Chisholm the upper hand when negotiating for cable delivery.

The strength of Sky’s positioning also allowed Chisholm to develop

distribution deals with programme providers such as Flextech. By now Sky

had the cable and satellite industry under its belt. When the company

went public at the end of 1994, its market capitalisation was up to

pounds 4 billion and the company was preparing to develop new revenue

streams.

Sky’s first venture into pay-per-view came in 1996, with the

high-profile Frank Bruno versus Mike Tyson world title fight. Around

600,000 homes paid pounds 9.95 to see this one-off event and, once

again, Sky could claim to be nudging the cutting edge of UK

broadcasting.

However, perhaps the foundations Chisholm has laid for developments at

Sky next year will prove his biggest achievement. Sky has announced

plans to introduce digital satellite TV into the UK in 1998 and, though

the timetable has been pushed back, Sky will be the first to bring

digital TV to UK audiences.

While Sky’s attempts to join the digital terrestrial party have been

dashed by regulatory concerns over such a concentration of power, the

company will have a clear grip on the introduction of the new

technology.

And its agreement with BT, Midland Bank and Matsushita for the supply of

digital interactive services place Sky at the axis of the anticipated

convergence of TV, computer and telephony technology.

Yet Chisholm’s successor, Mark Booth, should not expect such a

glittering tenure. The digital revolution gives rival broadcasters a

fresh chance to compete with Sky, and Chisholm’s departure comes amid

reports that his relationship with Murdoch had begun to sour as

Elisabeth Murdoch (Rupert’s daughter and the general manager of Sky) was

groomed for a bigger role.

Add to that the fact that Chisholm’s success owes something to his

deputy, Chance, who has also announced his intention to step down, and

Booth’s position looks a little less secure.

This article was first published on Campaign