Sky agrees £1.6bn deal to buy ITV’s broadcasting and streaming arm

Comcast-owned group says ITV channels and ITVX will remain free-to-air as deal faces regulatory scrutiny

Sky has agreed a deal worth up to £1.6bn to buy ITV’s broadcasting and streaming business in a move that would reshape the UK television market.

The Comcast-owned media group said it had agreed terms to acquire ITV Media & Entertainment, which includes ITV’s channels, ITVX and its public service broadcasting operations.

The deal comprises £1.2bn in cash, Love Productions and up to £200m in performance-related earn-out payments, subject to adjustments and regulatory approval.

Sky said ITV’s channels and ITVX would remain free-to-air after completion, with ITV’s public service broadcasting commitments maintained in full.

ITV News and Sky News will remain separate editorial operations.

The combined business would account for about 20 per cent of all in-home viewing in the UK, making it second to the BBC and ahead of YouTube.

Sky has also agreed a £2.1bn five-year content supply deal with ITV Studios, which ITV said would support British programming, production and creative jobs.

Dana Strong, Sky Group chief executive, said yesterday: “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.”

The deal comes as UK broadcasters face growing competition from global streaming platforms and YouTube.

Sky said the combination would create a larger UK-based platform for advertisers and support continued investment in British content, technology and creative-sector jobs.

The deal, which remains subject to regulatory approvals, covers ITV Media & Entertainment, not ITV Studios.

ITV Studios will remain with ITV plc, with Sky entering a separate supply agreement for content after completion.

Sky said the ITV business would keep its public service broadcasting commitments, including regional news and programming.

Viewers will continue to have access to programmes including Coronation Street, Emmerdale, Love Island, I’m a Celebrity… Get Me Out of Here!, This Morning, Loose Women, Lorraine and News at Ten.

And the company said the combined group would also deliver more free-to-air sport on ITV services.

Sky said it expected about £200m in annual cost savings by the end of the third year after closing, mainly through efficiencies in marketing, technology platforms and non-UK content.

Carolyn McCall, ITV chief executive, 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.”

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_{Main image: The European/Sky}