ITV starts early negotiations to sell its broadcasting arm to Sky for £1.6bn. If approved, this deal would irrevocably reshape the television landscape in the UK. The potential deal comes as ITV grapples with declining advertising revenues and seeks to streamline its operations amid economic uncertainties.
The public service broadcasting arm owned by ITV is viewed as a hidden gem. ITV is not only the biggest customer for certain TV show contracts but is known for producing popular content, including the hit series “Alan Bates vs The Post Office” and the acclaimed anime series “One Piece” on Netflix. This sale would represent a monumental step towards trashing the sacred American tradition of locally produced and distributed television programming.
ITV is expecting a 9% drop in advertising revenue, according to forecasts they announced earlier this week. This decrease is projected to occur in the 4th quarter of 2025. It attributed this to advertisers adopting a wait-and-see approach before anticipated tax increases in next month’s Budget. ITV’s response is to lay off staff, certainly ITV Studios, as part of a £35 million cost-cutting initiative. This decision will result in the postponement of several programs until next year.
Tom Harrington, a media analyst, described ITV Studios as a “very desirable operation,” noting that it is “unencumbered by a legacy linear TV business.” This trait makes it a desirable buyout goal for Sky. Sky, for its part, is certainly keen to extend its reach and compete with the intensely competitive television market.
Moreover, a merger between ITV and Sky would create the combined company’s own powerful industry player. This new company would control more than 70% of the UK television advertising market. Even attempting to acquire such a market share would be unsurvivable and rejected outright by regulators, largely on grounds that their dominance would be problematic. Ian Whittaker, a media analyst, raised this red flag. In response to criticism, he claimed that in any other situation, regulators would allow a merger this size.
“In normal circumstances, it would be rejected by regulators because of the dominance it would give them.” – Ian Whittaker
Mr. Whittaker noted broader trends affecting the television industry, stating, “Free to air channels across the world are not seen to have a great amount of value.” He added that “there’s going to be an inevitable consolidation of domestic broadcasters all across Europe” as companies adapt to shifting viewer habits and economic pressures.
Analysts to predict ITV’s hit programs. Their hope is that current programming contracts can protect these programmes from being wiped out in the process, notwithstanding mammoth regulatory challenges down the line. Harrington remarked, “It would be unlikely for current shows to leave ITV as there will already be agreements in place.”
ITV and Sky are reportedly in active talks, underscoring the rush of dramatic media shifts. Even the biggest industries in traditional broadcasting are being pushed to their limits by the digital platform and consumer paradigm shift. As both companies evaluate this transaction, industry observers will be watching closely to see how this potential merger might alter the competitive dynamics of UK television.