LONDON — In a move that has sent ripples through the British media landscape, Comcast-owned Sky has launched a £1.6 billion ($2.1 billion) bid for ITV's media and entertainment division, the company behind hit shows like Love Island and Downton Abbey. The announcement, made on Friday, marks the end of more than a year of speculation about ITV's future, as the broadcaster confirmed talks with Sky's parent company, Comcast, over the potential sale.
ITV's brief 70-word statement to shareholders revealed that the bid targets its TV networks and streaming service, potentially splitting the company in two. Shareholders would retain control of ITV Studios, the production arm responsible for programs such as Fool Me Once and The Voice. If completed, the deal could reshape the UK's broadcasting sector, combining the country's largest free-to-air commercial broadcaster with its top pay-TV platform.
According to sources familiar with the discussions, Sky has been preparing for this bid for some time, engaging in quiet talks with ITV leaders about the takeover's structure and mutual benefits. Regulatory examinations have also been underway to assess potential hurdles. A source close to the talks told Deadline, “There is goodwill and momentum,” though a formal agreement could still be weeks or months away.
The bid propelled ITV's share price up more than 10% following the announcement, a welcome boost after criticism at the company's latest annual general meeting where chair Andrew Cosslett faced heckling over the stock's performance. Yet, the proposal has puzzled some industry observers. One insider remarked dryly, “Why would you want to take the bad part of ITV away from the really good part?”
Sky, acquired by Comcast for $39 billion in 2018, has faced its own challenges, including mass layoffs and a £1.2 billion writedown in value. During a recent Comcast earnings call, executives including Brian L. Roberts made no mention of Sky, highlighting ongoing tensions. Some at Sky's West London headquarters believe Comcast has mismanaged the asset, even as the company returned to profit last year.
Proponents of the deal argue it creates synergies in a competitive market dominated by global players like YouTube and TikTok. A Sky insider said, “The way the market is looking, a deal like this does make sense.” By merging, the companies could offer a stronger proposition to advertisers and attract new subscribers, echoing consolidations in the U.S. such as the Paramount-Skydance merger and interest in Warner Bros. Discovery.
Industry executives noted Sky's prior interest in acquiring Channel 4, which the British government scrapped in January 2023. A former Sky executive explained that ITV and its streaming service ITVX could serve as an additional outlet for Sky's content, particularly sports like Premier League football. “Not everyone who watches ITV watches Sky, but everyone who watches Sky watches ITV,” an industry observer said.
The former Sky executive added, “Sky is like a massive cruise liner with a small hole. It will sink eventually, but maybe ITV plugs this gap a little longer.”
Tom Harrington, head of television at Enders Analysis, highlighted the advertising potential: “You’d be enormous in a shrinking market.” He continued, “If you have a declining business in many ways and combine it with another [declining] business then suddenly you look a lot bigger. That is better, even if putting them together won’t really arrest what they are facing.”
Another former Sky insider suggested the deal allows Comcast to manage both entities for cash flow, leveraging declining but profitable ad revenues. This could involve significant cost-cutting, prompting concern from broadcasting union Bectu, which stated the deal would have “huge implications” for ITV staff. The insider likened the merger to “two drunks propping each other up at the bar.”
Regulatory approval remains a key uncertainty. The deal requires clearance from Ofcom and the Competition and Markets Authority, with Sky and ITV controlling an estimated 70% of the UK advertising market. A Sky insider acknowledged, “That would be the biggest hurdle,” but noted the UK government's recent signals favoring broadcaster consolidation. Competitors like Paramount-owned Channel 5 are likely to raise objections.
Former ITV chair Peter Bazalgette, speaking on BBC Radio 4’s Today program, urged flexibility from regulators, arguing that ITV competes with tech giants like Google and Meta in video advertising, not just domestic rivals like Channel 4. This perspective aligns with ITV's recent lobbying efforts to lawmakers.
Overlapping news operations add complexity. Sky News, loss-making for years, has a funding guarantee from Comcast expiring in 2028. A source close to Sky News suggested it might produce ITV News, potentially resolving Comcast's “really difficult decision in 2028,” though this could impact current supplier ITN.
The separation of ITV's networks from its studios raises questions about their intertwined operations. A market observer noted, “They are so inextricably linked,” warning that post-sale terms could become less favorable, diminishing the asset's value.
Looking ahead, some sources assume ITV CEO Carolyn McCall will pursue a buyer for the studios arm, valued internally at £3.5 billion, following any networks sale. Interest from Banijay and RedBird IMI has waned recently, but the unit remains appealing amid industry consolidation.
As ITV marks its 70th anniversary, the potential union with Sky underscores the need for adaptation in a rapidly evolving media environment. While the bid has sparked debate, executives hope it leads to a sustainable partnership. Sky, ITV, and Comcast declined to comment on the matter.
The broader implications extend to the UK's media ecosystem, where consolidation may help local players compete globally. However, concerns over job losses, market dominance, and content diversity persist as regulators weigh in. With talks ongoing, the industry watches closely for what could be a pivotal shift in British broadcasting.