Is Sky’s acquisition of ITV necessary to compete with global platforms?
Analysis
Sky’s acquisition of ITV’s Media & Entertainment division for £1.6bn is set to draw close scrutiny from regulators, even as media strategists have said the deal could be beneficial by linking audiences in the UK TV ad market.
“This is genuinely one of the most exciting things to happen to TV in years,” Amy Pountain, head of media at specialist media agency Miroma Founders Network, tells The Media Leader. “The market has needed a shake-up like this for a while, and seeing a British player build the scale to take on the global streamers head-on is exactly the kind of ambition the industry’s been crying out for.”
The acquisition, she says, could create a combined tech stack that joins up targeting and attribution across a massive cross-section of British linear and streaming TV.
Chris Gilfoy, chief strategy officer at independent agency the7stars, agrees, telling The Media Leader the deal could lead to a “fundamental shift in how TV inventory is bought and sold”.
“Bringing together Planet V, AdSmart and Sky’s first-party data would create a compelling UK alternative to the global digital platforms, giving advertisers access to premium content, scaled audiences, and increasingly sophisticated targeting,” Gilfoy continues.
“The challenge will be ensuring that proposition remains transparent, measurable and interoperable, rather than becoming a closed ecosystem.”
That is, if the deal gets the green light from regulators.
Giao Pacey, partner at media and entertainment law firm Simkins LLP, comments that the “rationale of this deal is easy to see”, with traditional broadcasters squeezed by audiences for attention and advertising revenue from global streaming and tech platforms. “Their ability to operate at scale is becoming a key determinant of their success.”
But, Pacey warns, while the commercial logic is straightforward, “obtaining the necessary approvals will be considerably more challenging.”
Sky agrees to acquire ITV Media & Entertainment in deal worth up to £1.6bn
Reducing TV competition to compete at scale
For their part, Sky and ITV have argued that the combined entity would only comprise 20% of in-home viewing in the UK; a substantial number, yes, but significantly less than their dominance of UK screen time in decades past.
However, according to strategic media advisory Madison & Wall, the combined Sky-ITV entity represented roughly £2.3bn in advertising revenue in 2025, equivalent to 44% of the total TV ad market in the UK.
Sky notably also sells inventory for other networks, including Warner Bros Discovery, Paramount’s Channel 5, GB News and other programmatic inventory. Thus, as a sales house, Madison & Wall estimated Sky Media’s market share would likely sit above 60% following its acquistion of ITV’s Media & Entertainment business.
That presents a significant concern for regulators weighing whether the acquisition would have a negative impact on competition in the TV market and a worse product for consumers.
As Gilfoy also tells The Media Leader, Sky’s dominance over the broadcast TV market could create worse market conditions for advertisers in the long-run.
“A combined sales house would hold significantly greater influence across premium video, live sport and entertainment, reducing the competitive tension agencies have traditionally relied upon to negotiate pricing, optimise investment and secure commercial flexibility for clients,” he says.
The UK’s other main public-service broadcaster, Channel 4, will see its own market share dwarfed by Sky-ITV.
On one hand, this puts Channel 4 in an advantageous position as the only remaining scaled alternative in the broadcaster AV market. On the other, Channel 4 could find itself unable to compete with the scale of Sky-ITV’s proposition.
Taking on US platforms while being US-owned
The argument goes that consolidation is necessary to shore up a TV market that is under pressure from global, American- and Chinese-owned platforms. As Madison & Wall estimated, combined UK ad revenue for Sky and ITV fell by 7% in 2025 even as the wider UK ad market grew by 10%, driven by the likes of Meta, Google, Amazon and ByteDance.
The declining TV ad market has led investors to devalue ITV and Sky’s traditional broadcast businesses even as its streaming businesses and studios have broadly performed well.
As media analyst Ian Whittaker writes in The Media Leader today, “For years, the industry saw ITV’s integrated structure as a strategic strength. From an investor’s standpoint, though, this was not evident, seen in the fall of ITV shares from its heights of over 260p to today’s value of just over 80p.
“Investors’ recurring question was how the two parts could be split to realise value. The investor argument has won. ITV Studios will be a separate listed entity. Sky will absorb the broadcast business, which investors have seen as a mature assets whose value is greater in the hands of a larger distribution platform.”
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As Pacey summarises: “The key question now is whether regulators are prepared to accept that creating a stronger UK media champion can be achieved without compromising competition, consumer choice or media plurality.”
James Mackenzie, chief investment officer at Havas Media Network, tells The Media Leader he backs the deal, in part because “a combined Sky and ITV offering should provide a single point of access to inventory, streamlining planning and activation which will improve transparency, efficiency and cross-platform measurement for advertisers.”
Consolidation, Mackenzie argues, is necessary to create a strong enough domestic media proposition in face of greater competition from Netflix, Disney+, Amazon Prime Video and YouTube.
The only problem? Neither Sky nor ITV would be British-owned despite serving the British public.
While Sky has committed to fulfilling ITV’s public-service remit in the UK, Sky’s ownership is itself under question amid its own spin-off, alongside NBCUniversal, from its US parent Comcast. Analysts have speculated Sky and NBCUniversal could themselves be acquired by other conglomerates as part of a wider consolidation effort, leaving the identity of ITV’s ultimate parent up in the air.
For advertisers, this may not immediately ring alarms, particularly as Sky has committed to spend £2.1bn in on ITV Studios (itself spinning out from ITV) productions over five years upon completion of the acquisition.
But as Nick Manning, the co-founder of Manning Gottleib Media (now MG OMD), warned in May, the effects of the consolidation “could have substantial disadvantages for the UK media and advertising sectors” by further homogenising TV programming decisions, reducing the range of choice for “lighter viewers, underserved audiences and UK-made programmes”.
Preserving flexibility
The deal is thus a balancing act, as Mackenzie describes, between “the opportunity to create the scale needed to compete with global platforms” and the need to “sustain investment in UK and international content.”
In the short-term, Gilfoy expects the regulatory approval period, which is expected to take months, could create favourable trading conditions for agencies and brands seeking to secure long-term commitments from the broadcasters.
But, he concludes, regardless of whether the deal goes ahead, agencies and advertisers must “think carefully about how they preserve flexibility, diversify investment, and measure value in a changing marketplace.”
“The shape of UK television may evolve, but success will still depend on maintaining a healthy, competitive ecosystem that delivers choice for advertisers and value for viewers.