Sky has agreed terms to acquire ITV’s Media & Entertainment division (ITV M&E) for up to £1.6bn, the companies announced this morning, in a deal that would give the combined entity roughly 20% of all in-home viewing in the UK.
The acquisition brings together the two companies’ broadcasting, streaming and advertising businesses, creating what both parties describe as a “commercial streaming champion” capable of competing with global platforms. The combined broadcaster would be second only to the BBC in in-home viewing share, ahead of YouTube.
The deal comes days after Sky’s parent company Comcast announced it would spin off NBCUniversal and Sky into a separate, independently traded media company, leaving its broadband and wireless businesses as a standalone entity.
The new NBCUniversal business, which will include NBC, Peacock, Universal Pictures and a theme parks division, is expected to be led by Comcast co-CEO Mike Cavanagh. Sky’s acquisition of ITV M&E would sit within that structure once both transactions close.
Under the terms agreed, ITV plc will receive £1.2bn in cash alongside Love Productions, the production company behind The Great British Bake Off, with a further performance-related earn-out of up to £0.2bn. Sky’s acquisition includes ITV’s Channel 3 licences. Separately, Sky has committed to a £2.1bn content supply agreement with ITV Studios over five years upon completion, intended to sustain investment in British production and creative jobs. Programmes acquired under that agreement will not count toward ITV’s independent production quotas.
The announcement had been widely anticipated. At ITV’s annual Showcase last month, commercial managing director Kelly Williams told journalists that Sky and ITV were having “really active discussions” and had just come off a call on the matter. The Media Leader reported at the time that any formal announcement was unlikely before the conclusion of Cannes Lions, which wrapped last week. ITV News had separately reported the deal was just “weeks away.”
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ITV’s public service broadcasting commitments will be maintained in full, including regional and national news, with ITV channels and ITVX remaining free-to-air. Both ITV News and Sky News will continue to operate as distinct editorial voices.
ITV currently reaches around 40m people each week and more than 16.5m monthly digital users. Around £200m in annual cost synergies are expected on a run-rate basis by the end of the third year after closing, primarily from efficiencies in marketing, technology platforms and non-UK content.
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.”
Carolyn McCall DBE, CEO of ITV plc, said the deal delivered “clear, tangible value for shareholders”, adding that all of ITV’s public service broadcasting commitments, including regional and national news, are safeguarded under the Channel 3 licence terms until 2034.
Both the Sky/ITV transaction and the Comcast spinoff are subject to regulatory approvals.
More reaction to follow…
