Sky UK Acquires ITV’s Media and Entertainment Divisions to Boost Streaming
Broadband and media giant Sky UK (Comcast) has this morning confirmed that they’ve “agreed terms” to acquire ITV’s broadcasting business, specifically the company’s Media and Entertainment divisions, which include both their free-to-air TV channels and the ITV X video streaming service for a total consideration of up to £1.6bn (£1.2bn of which is cash).
The deal, which was first rumour last year, reflects the fact that the traditional TV broadcasting business is currently coming under immense pressure from both a rise in the use of video streaming services (Netflix, Prime [Amazon], YouTube, Disney+ etc.) and the future switch-off of digital terrestrial TV services – expected to occur in 2034 or 2044 (licences that support DTTV are already due to expire in 2034) – in favour of streaming TV channels over broadband.
Suffice to say that consolidation and innovation like this may help to balance against that, although such a sale will see the pair controlling around 70% of the UK’s TV advertising market. Such a situation might normally raise a few regulatory red flags, but the rise in competition from streaming services does tend to change that dynamic and ITV did previously forecast that its ad revenues would be 9% lower in the last quarter of 2025 (i.e. Sky’s deal might now be viewed as more of a rescue).
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Otherwise, following completion, ITV channels and ITVX will remain free-to-air, with their public service broadcasting commitments continuing to be met, while Sky will continue to be the home of entertainment, sport, and connectivity (mobile and broadband etc.).
The new agreement will also see Sky enter into a £2.1bn content supply agreement over 5 years with ITV Studios upon completion of the deal (ITV Studios itself is not part of Sky’s acquisition). Programming acquired under the agreement will not count towards ITV independent production quotas, helping to ensure continued opportunities for independent producers across the UK.
Dana Strong (CBE), Sky Group CEO, said:
“This is a defining moment for British media and an opportunity to build a stronger future for two of the UK’s most loved and trusted brands. We have huge respect for the transformation the ITV team has delivered, particularly its successful move into streaming through ITVX, which has brought fantastic British content to millions of viewers across the UK.
Bringing Sky and ITV Media & Entertainment together combines the very best of free-to-air television, pay TV and streaming, ensuring viewers across the UK continue to enjoy outstanding British programming in a rapidly changing world.
ITV will remain a public service broadcaster at the heart of British life, and we’re excited about the future we can build together.”
Carolyn McCall (DBE), CEO of ITV plc, said:
“ITV has successfully evolved in a rapidly changing media landscape – launching, and scaling, ITVX and developing ITV Studios into a major force in the global content market. This transaction builds on that momentum to deliver clear, tangible value for shareholders.
At the same time, through the commitments made by Sky, the combined ITV M&E / Sky business will continue to deliver everything about ITV that our viewers and advertisers love and value and our people are hugely proud of – making programmes that reflect and shape society, bringing people together for shared experiences and having the quality, diversity and plurality that are the hallmarks of our contribution to the UK’s creative industries. In addition, all of ITV’s PSB commitments, including regional and national news, are safeguarded under the terms of the Channel 3 Licences until 2034, which Sky is acquiring as part of the Transaction.
I am also confident that Sky will be a strong and responsible custodian of ITV M&E, building on its heritage while investing in its future and safeguarding the qualities that make ITV so valued by viewers, advertisers and the UK’s creative industries.”
Both sides clearly hope that the combined business will have the resources and technology capabilities to compete more effectively in today’s modern streaming focused market, while also delivering approximately £200m in annual cost synergies (on a run-rate basis) by the end of the third year after closing; most of that will come from efficiencies in marketing, technology platforms and non-UK content. But first they’ll need to get all of this past the regulators.
The news follows shortly after Sky’s parent, Comcast, announced its intention to separate their media and technology businesses into public companies through a “tax-free spin-off” of NBCUniversal and Sky (here). The move will create two companies – Comcast and NBCUniversal (existing Comcast shareholders will own shares in both companies).
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NBCUniversal will become a global media and entertainment company, consisting of Universal’s film and television studios, NBC and Telemundo networks, Peacock, Bravo and Sky’s UK and European media business (inc. Sky Broadband and Sky Mobile etc.).
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on X (Twitter), Mastodon, Facebook, BlueSky, Threads.net and Linkedin.
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I guess it will give Sky access to listed sporting events which, IMO, is not a bad thing at all. It should also strengthen Sky News and ITN as independent news sources.
I think it is a wonderful thing
ITV could not have survived on its own
as they were making some losses in some areas
I wonder if they will merge Sky News with ITN
As for the Soaps, Emmerdale and Coronation Street
Sky would be buying them from ITV Studios I suspect
£1.6B suggests that the ITV Archive, is not being sold to Sky/Comcast, an American company. Not sure what the solution is, but ITV Studios may be subject of future buy-outs, the same as Sky. In my view, it would be better if the government insisted the archive went to BFI for safe keeping. It’s large and will have historical elements of British life. Some ITV regional Companies that lost their franchises have had their archive change hads several times, and the Television South archive is rumoured to be destroyed after another American Media giant took ownership as paper work was lost after multiple transfers before it. It’s not unique to this one regional company either. The Thames Television archive went to German broadcaster RTL under guise of Freemantle too after Thames lost their franchise for London to Carlton Television in the early 90’s.
Question is now whether Channel 4 & Channel 5 will be able to stay independent. With the proliferation of the streaming services they are starting to look like small fish in a large pond.
Well Channel 5 isn’t independent, it’s owned by Paramount Skydance, who are currently trying to buy WBD. That probably has something to do with why they are all of a sudden getting sub-licencing deals for some of TNT Sports content (TdF highlights and the Commonwealth Games), instead of WBD showing them on their own free to air channels.
Channel 4’s independence largely relies on government support. It’s probably safe for now under Labour, but I’m sure there are a couple of wannabe future culture secretaries waiting in the wings ready privatise it should they be given the opportunity…
Didn’t realise that. Last time I looked it was owned by Richard Desmond but that was over a decade ago!
@Gareth I bet the government are wishing they’d sold Channel 4 now, what with the recent Married at First Sight scandal
Channel 5 is owned by Paramount Skydance Corporation, which just gobbled up Warner Brothers so I’ll think they’ll be okay Big Dave, they are part of the business that’s been spun off to the streaming and networks side of Warner (similar to how Sky have bought ITV’s part of the business)
It’s great news, they’re a leader in sports broadcasting and have been delving more into productions and co-productions recently, we may see some older Sky series come out and what happens to ITVX and NOW (hopefully they delete the travesty that is ITVX) and potentially some sports we don’t see end up on ITV.
News provision and regional news is a concern with Comcast (Sky’s owner) only having to fund Sky News for 10 years and that’s due to run out soon in 2028 – so do ITN need to provide ITV anymore? (they also do news for Channel 4 and 5 and make Good Morning Britain)
Channel 4 are still independent and publicly owned but only funded commercially with ad revenue down could be a worry but the government wouldn’t let it fail as it has public service broadcaster remits to maintain – just like ITV does although that contract runs only until 2031.
We might see some benefits but we may have to wait a while to see what happens like any merger.
A good move, but they will have to make bigger swings than the GBP200mn to make this work.
It does make me wonder what will happen to Sky News, will it end up being closed in favour if ITN or will Sky sell its stake in ITN, if so, what future for ITN, can it survive on only C4 and 5? On the streaming side of things, I wonder what the future of the ITVx app is, it would make sense from a cost perspective to have a single back and and maybe rebadged Now or Sky Go to replace ITVx, both are better than the ITVx app. There are lots of possible avenues here, it’s going to be really interesting to watch in the long term, especially when the contract for content from ITV studios comes up for renewal, we could see former ITV shows moving networks altogether if other channels bid on them. It’s happened when BBC didn’t want to pay the asking price for GBBO…. I just hope this isn’t a race to the bottom as far as quality goes.
There is unlikely to be any clarity on what will happen to News and back-office operations until nearer the completion of the merger of the three news provider organisations. I suspect the news will not be good for many.
It will be interesting to see how this meshes/affects with Freely, seeing as this is a competitor to Sky Stream. Mind you, Sky does already have a part stake in Freeview through one of their companies. So not exactly out of kilter with what their current offerings are
And there’s that 2034 date again. Bye-bye DTV December 2034?
The ITN situation is bizarre. Instead of further consolidation of existing shareholders (DailyMail Group, Informa, Reuters (each on 20%) and ITV on 40%,) ITV now plan on selling half of their shareholding to SKY. ITN has a pension deficit, but never the less de-consolidation is the opposite of what should be happening. It should be either being wrapped up wholly into ITV or Sky (this would require a merger with Sky news which is problematic).
I suspect NBCUniversal may spin off Sky down the line in 2030 to unwind the disastrous takeover but this would require an agreement on Peacock like Sky has now with HBO Max. At this point Sky and ITN may merge. This would resolve foreign ownership issues.
If the Banijay / All3Media (which is the former Chrysalis Television) merger goes ahead this rules out an immediate merger with the remnant ITV. The only other merger partner for ITV is RTL’s Fremantle. This is doubly ironic since Fremantle contains Pearson Television/Thames Television (a former ITV franchisee). I’m not sure how this would work. Will ITV buy the English speaking RTL business including Talkback Thames? This would preclude a pan European production group – if they merge with RTL it would shift RTL away from Europe to heavily skew toward the UK something Bertlesman has form with in book publishing but not with TV.
I suspect Paramount/WB will offload Channel 5 to Sky or spin it off in a few years too. In the US they are offloading legacy broadcast tv.
As an aside I also forgot ITV own Planet24 – the production company behind the Big Breakfast. Everything comes around if you wait long enough.
Planet24 no longer exists. The former operations are part of the ITV Studios business, which is in the process of being split from the ITV operations.
Paramount is unlikely to sell Channel5 and has indicated a continued commitment to the unit following the reorganisations.
NBCUniversal is unlikely to sell SkyTV, given that it is a substantial European operation. There will be consolidations and sales of specific units, but Sky will play a key role in the new conglomerate.