Nine months ago, James Murdoch was defiant. The heir to the News Corporation empire had never been told of the extent of the phone hacking at News of the World. He had no intention of resigning his positions as chairman of News International or BSkyB, and he had the unanimous backing of both the boards.
His father Rupert Murdoch, aides and allies stood phalanx-like around him, swearing allegiance to the young man they credited with turning BSkyB from a loss-making business into a cash machine throwing off pounds 1.2 billion a year.
"We have known James for some eight years. He has always acted with integrity in the eyes of both the board and the senior management," said BSkyB's independent directors ahead of its last annual meeting, pushing aside the increasing clamour of shareholder opposition.
How things have changed. Just a month after that statement, News Corp's internal investigations unit, the Management Standards Committee, discovered an email to Murdoch spelling out the suspected scale of the hacking crisis. His best defence went from being 'none of my staff told me' to 'my staff told me but I didn't notice'.
The cracks in News Corp's evidence widened, and with them the fault lines in Murdoch's own fiefdom. One by one, he has resigned his directorships. In September he quietly stepped down from the boards of News Group Newspapers, Times Newspapers Limited, and News International Holdings - all closely associated with the day-to-day operations of its UK newspapers. At the time, insiders linked the move to Tom Mockridge's arrival as chief executive of News International, shooting down suggestions that it paved the way for Murdoch's resignation as chairman. By the end of February, however, he had stepped down from that post as well. It had nothing to do with the hacking row or shareholder pressure, insiders said, and was instead designed to free Murdoch to focus on News Corp's television business.
Not everyone was convinced. Laura Martin, an analyst at Needham, hailed it as News Corp's version of firing James, while Crispin Odey, one of BSkyB's biggest shareholders and Rupert Murdoch's former son-in-law, warned that he would be out of the pay-TV operator next.
It was a similar story with Murdoch's resignations from GlaxoSmithKline and Sotheby's, in January and March. Officially neither resignation had to do with the potential destruction of shareholder value, as the hacking scandal cast its long shadow. Both companies said they would continue to draw on his expertise - but behind closed doors, executives were mopping their brows.
Murdoch is an uncomfortable name to be associated with, and it could become even more so after Easter, when the Culture, Media and Sport Committee publishes its report on if it was misled about the hacking row. As revealed by The Sunday Telegraph, Murdoch is on the brink of a fine line decision over whether to relinquish the chairmanship before then. An exit at Easter would not be surprising. A spokesperson for Pirc, the shareholder lobby group, said, "It's past the point of no return. It feels like BSkyB has realised that the pressure for change is just too great."
Meanwhile, Dame Gail Rebuck and Lord Wilson of Dinton are preparing to stand down from the BSkyB board on which they have each served more than nine years. Jacques Nasser will also relinquish his status as an independent director, clearing the way for a trio of new faces.
"They will have to be pretty independent types. If BSkyB nominated another acolyte, it will not go down at all well," says Odey. He is eyeing the board shake-up as an opportunity for independent shareholders to exert more influence. But that is not the only change it is likely to usher in.
At BSkyB's last annual meeting, 44pc of independent shareholders opposed or abstained from voting on Murdoch's re-election to the board. The naysayers included heavyweight institutional investors such as JP Morgan, UBS and Aberdeen Asset Management - the fund management firm run by Martin Gilbert, one of BSkyB's most recently appointed independent directors.
With the cracks threatening to open up and swallow Murdoch, a new line-up of non-executives means the board can withdraw its unanimous backing without risking an embarrassing volte face. Observers suggest it has finally dawned on the Murdochs that the writing is on the wall for James. This is their way of managing a dignity-preserving exit from BSkyB.
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