From Rag to Dishes for the Editor of Tabloid Sun : Communications: Murdoch stuns Britain by selecting flamboyant Kelvin MacKenzie to run satellite TV service.

Rupert Murdoch, a man always full of surprises, has stunned British media circles with the appointment of Fleet Street’s wildest--and perhaps most successful--editor to run the BSkyB satellite television service.

Taking over the $2-billion multichannel operation without benefit of any previous TV experience is Kelvin MacKenzie, 47-year-old editor of Murdoch’s tabloid, the Sun--the biggest daily in Britain with a circulation averaging 3.7 million and home of the Page 3 Girl.

MacKenzie’s antics have made him as well-known as nearly anyone his paper covers. He once installed a Hate-Line for complaining readers to yell at his deputy editor and warned politicians, “If you don’t want to appear in the papers, then don’t drop your trousers.”

The editor’s “splash” headlines are legendary: “From Toe Job to No Job” concerned the resignation of a government minister caught in a kinky sex scandal. He once fired the paper’s astrologer with a letter that began, “As you will already know. . . .”

And after the British general election in 1992, for which the Sun used its news pages to campaign ferociously and successfully for John Major’s Conservative government, the paper boasted across the front page: “It’s the Sun Wot Won It!”

It is MacKenzie’s ability to make the Sun a part of the news, not just a messenger, that is thought to be one of the primary reasons for his ascension to managing director of BSkyB.

“BSkyB wants to accelerate the process of getting new subscribers,” says Terry Povey, an analyst with Bell Securities in London. “For that, they need a big mouth who can grab a few headlines.”

Says Quentin Smith, deputy editor of the British trade magazine Broadcasting, “What they really need now is someone who can get people talking, someone with a sense of what will appeal to the masses--sort of pull off a Sun with BSkyB.”

Not everyone speaks glowingly of MacKenzie, though. Michael Grade, chief executive of Britain’s Channel 4 television and an outspoken critic of BSkyB’s programming standards, told reporters, “Kelvin is the only person I know who could take the channel down-market.”

MacKenzie, who declined to be interviewed, arrives at the satellite service at a turning point in its development. The six-channel service, half-owned by Murdoch’s News International but effectively run by Murdoch, only recently began earning a profit.

Last September, in a move to galvanize interest in satellite TV and generate additional revenue, BSkyB organized a basic package of 14 channels--its own and others--that was offered for a monthly rate of $10.50. The move proved successful. The company reported selling a record 1.3 million satellite dishes in December, boosting the number of homes it reaches to 3.1 million. Satellite programming still accounts for just 6% of viewing, however.

BSkyB will not say how many viewers it lost because of the changeover, which required dish owners to suddenly pay for some channels they had been receiving for free. Broadcasting magazine put the number of lost homes at 200,000, a figure that deputy editor Smith termed “not bad.”

Along with the channel repackaging at BSkyB has gone a management shake-up that sent Murdoch’s two top managers to look after other parts of the empire. Sam Chisholm, chief executive at BSkyB, remains in charge of the service but now also has responsibility for running all Murdoch’s TV operations outside North America. Former managing director Gary Davey is now running Star TV in Asia.

With a solid framework established for BSkyB, the theory goes, it is MacKenzie’s job to speed up growth.

“Kelvin is one of the most talented media executives” in Britain, a BSkyB spokesman says, explaining his appointment. “He understands what makes something work.”

But MacKenzie’s 13 years as editor of the Sun may prove troublesome in at least one area. His arrival at BSkyB coincides with efforts by Europe’s independent television producers to force the British government to enforce European Union (formerly known as the European Community) quotas on imported programming and independent production on satellite services.

BSkyB offers three movie channels showing mostly American films, and a general entertainment channel, Sky One, which relies heavily on U.S. and Australian imports. “The Simpsons” and “Beverly Hills, 90210,” both from Murdoch’s U.S. entertainment companies, are among its most popular programs.

The satellite service also offers a news channel and a sports channel, both of which use locally produced programming. Neither of those categories is taken into consideration under EU quota guidelines, however. Those call for 51% of all TV programming to be European in origin and at least 10% of all programming to come from independent producers “where practicable,” a term that has so far allowed room for maneuvering.

With the issue heating up, it will almost certainly fall on MacKenzie to smooth things over. But cozying up to Continentals has never been MacKenzie’s thing. Quite the opposite.

Under his leadership, the Sun became a bastion of xenophobia. French attempts to block imports of British lamb brought the headline “Hop Off, You Frogs.” And anger with Jacques Delors, president of the European Commission, resulted in the now-legendary headline “Up Yours Delors.”

Now it’s up to MacKenzie to explain to the Eurocrats why BSkyB deserves special dispensation.