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ITV has confirmed it is in early talks with Sky over the possible sale of its media and entertainment division, in a move that could reshape the UK television industry. In a statement to the market on Friday, ITV announced that it was in “preliminary discussions” regarding a potential sale of its broadcasting and streaming business to Sky for an enterprise value of approximately £1.6bn. “There can be no certainty as to the terms upon which any potential sale may be agreed or whether any transaction will take place”, the broadcaster said, adding that further announcements would be made “if appropriate.” Latest shake-up in UK media The approach is understood to involve Comcast Corporation, Sky’s US-based parent company. The talks focus on ITV’s commercial free-to-air TV channels and its ITVX streaming platform, two assets that form its media and entertainment division. A deal would not include ITV Studios, which produces globally recognised formats such as Love Island and Britain’s Got Talent. ITV Studios has long been viewed as the stronger part of the group, generating roughly half of its total revenue and driving most of its international growth. Morgan Stanley and boutique advisers Robey Warshaw, recently acquired by Evercore, are advising ITV. The two firms previously worked together in Comcast’s £30bn acquisition of Sky in 2018. Strategic backdrop Comcast’s interest marks a potential return to expansion in the UK after several years of retrenchment across Europe. The US media giant wrote down the value of Sky by billions of dollars following its takeover and agreed in June to sell its German business, Sky Deutschland, to RTL for €150m. Buying ITV’s broadcasting arm would boost Sky’s control of the UK’s commercial television market, adding mass audience channels to its subscription-based model. It would also give Comcast a domestic streaming foothold in ITVX, which ITV said in July had broken even two years earlier than planned. ITV has faced pressure from a difficult advertising market, with its shares down around eight per cent this year and roughly 75 per cent below their 2015 peak. The company’s largest shareholder, Liberty Global, halved its 10 per cent stake in October via a block trade. In its most recent trading update, ITV forecast a nine per cent decline in fourth-quarter advertising revenues, despite a 15 per cent rise in digital advertising, and announced £35m of temporary cost savings across its media and entertainment arm. The group said it remained on track to deliver £750m in digital revenue by 2026. Two-decade tie-up Any potential deal between ITV and Sky would mark the latest chapter in a two-decade relationship between the two broadcasters. In 2006, James Murdoch led Sky’s move to buy a 17.9 per cent stake in ITV for £940m, a holding that regulators later forced Sky to sell after competition concerns. While the UK regulator is likely to scrutinise any new transaction closely, a sale would fit with ITV’s recent strategy to simplify its operations and focus on content production and international distribution. Meanwhile, Comcast would be doubling down on its UK operations even as traditional broadcasters continue to feel pressure from global streaming rivals such as Netflix, Amazon Prime and Disney+. But both companies have cautioned that discussions remain at a very early stage. ITV reiterated there is “no certainty” that any transaction will proceed, while Comcast has declined to comment on the reports.
