Sky has announced a long-awaited £1.6bn deal to buy ITV’s broadcasting and streaming arm to create the UK’s biggest commercial broadcaster.
Sky, which is owned by the US telecoms company Comcast, will pay £1.2bn in cash initially for ITV’s media and entertainment business, which includes its free-to-air TV channels in the UK and ITVX streaming platform. It has agreed to pay a further potential £200m in the second half of 2028, depending on 2027 advertising revenues.
Sky, which described the deal as a chance to create a “UK-focused national streaming champion”, hopes it will help it compete for viewers with US streaming platforms including Netflix, YouTube and Amazon Prime Video.
As part of the transaction, Comcast will sell its Love Productions business, which makes The Great British Bake Off and The Piano, to ITV for £200m.
If approved, the deal, which will face 12 to 18 months of regulatory scrutiny, would mark the end of 70 years of ITV as an independent public service broadcaster.
It does not include the programme-making arm, ITV Studios, one of the world’s biggest production companies, which has made shows including I’m a Celebrity … Get Me Out of Here! and the hit drama Mr Bates vs the Post Office. This will remain as a standalone company listed on the London Stock Exchange.
Sky has committed to spending at least £2.1bn between 2028 and 2032 on the studios business as part of a long-term strategic partnership, safeguarding the future of popular programmes such as Coronation Street and Love Island.
Sky said it would not look to put “fan-favourite” ITV shows, or sports such as the Six Nations rugby tournament, into its subscription services.
“All of those shows will remain on the free ITV service,” said Dana Strong, Sky’s chief executive. “Coronation Street, Emmerdale, Love Island, I’m a Celebrity, Ant and Dec. There is no plan or intention of putting those loved shows behind a paywall. We think that is an important commitment we are making.”
Strong said Sky planned to make more sport available free-to-air.
ITV’s board expects to return £950m to shareholders, and a further £65m will be put into escrow for the benefit of the ITV pension scheme.
“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,” said Strong.
Andrew Cosslett, ITV’s chair, said: “For over seven decades, ITV has played an important and cherished role in the public life of the nation. At a time of rapid change in the industry, it is right that we now secure ITV’s crucial role as a public service broadcaster and this transaction achieves this.”
Sky has agreed to pay a break fee of £80m if the deal does not get regulatory approval. ITV, for its part, would have to pay a break fee of £11.5m if it does not get the nod from regulators for the acquisition of Love Productions.
Sky said it had identified approximately £200m in annual cost synergies that would be realised by the end of the third year after the deal closed. The company said that most of the cost cuts would be made through efficiencies in marketing, technology platforms and non-UK content.
Strong said that a “minority” of the savings would come from job cuts where there was duplication, “primarily in corporate and commercial functions”.
Carolyn McCall, the chief executive of ITV, who some industry sources believe will leave once the takeover is complete, said that ITV currently spendst £100m annually on non-UK content, which it would not need to do once it was part of Comcast.
The takeover deal is expected to attract scrutiny from the UK’s Competition and Markets Authority and the telecoms regulator, Ofcom. Ofcom is likely to examine concerns about the owner of Sky News taking half of ITV’s 40% stake in ITN, the production company behind ITV News, Channel 4 News and 5 News.
Strong said there were no plans to merge Sky News and ITV News, pledging to maintain independence at least until 2034 in line with ITV’s existing licence obligations to Ofcom. She added that ITV’s regional news operation was an opportunity for Sky, which does not have a local news offering.
Last week, Comcast said it would spin off its media operation – which includes Sky and the Hollywood film studio, TV and theme park business NBCUniversal – into a separate publicly listed company.
Chris Kennedy, ITV’s finance chief, said that he did not believe that the spin-off, which the US group said would take a year to complete, would impact the regulatory process facing Sky’s takeover of ITV.
The move comes eight years after Comcast acquired Sky’s European operations for £31bn.
