Sudden goodbye to Sky from chief executive

By SIMON HENDERY

In a surprise move just a day after he painted a rosy future for a company threatened by increased competition, Sky TV boss Nate Smith quit, after more than nine years at the helm.

Mr Smith told shareholders at the company's annual meeting in Auckland that he was leaving for personal reasons.

However, relations between the Sky board and senior management have been tested recently.

This week TVNZ and Telstra Saturn revealed they were negotiating to create a joint venture to deliver digital television in competition to the Rupert Murdoch-backed Sky network. Sky had expected to do a similar deal with the state-owned broadcaster.

Hints that the board and management have drifted apart on issues of Sky's direction emerged September last year when a deal to buy 30 per cent of internet company ihug - brokered by Sky director Trevor Farmer - fell through after opposition from the company's executives.

Sharebrokers were unconcerned by Mr Smith's resignation.

He will be replaced as chief executive by fellow American John Fellet, the listed company's chief operating officer.

The head of research at DF Mainland, Bruce McKay, said the transfer of power at Sky TV would be very smooth.

"They have both worked as a team in the past and John will take on a few extra responsibilities and keep the wheels moving."

Sky TV shares rebounded yesterday after falling on Monday following the release of details of TVNZ's deal with Telstra Saturn.

The stock traded as high as $3 yesterday and closed up 10c at $2.91.

Mr Smith said his eldest daughter wanted to return to the US to attend university next year. His second daughter also wanted to return to the US and he expected his entire family would have made the move within the next 18 months.

Mr Smith said he did not know what he would do once his contract expired on December 31, but he was excited about the prospects for interactive technology such as the type Sky was rolling out, and planned to remain within that industry.

It is understood Mr Fellet has been groomed for the top job over recent months, with Mr Smith taking a greater role in interactive issues.

Mr Smith joined Sky in 1991.

Meanwhile, a motion to increase Sky directors' total fees from $64,000 to a maximum of $320,000 was passed without discussion.

Until now only two independent directors - Barrie Downey and John Hart - have been paid directors' fees ($32,000 each).

But acting chairman Mike Robson said payment for the other seven directors was appropriate since the company had grown significantly since listing in 1997.