Comcast’s Sky unit has announced that it plans to acquire ITV Media & Entertainment from ITV plc for roughly 1.6 billion pounds ($2.14 billion), comprising 1.2 billion pounds ($1.6 billion) in cash, Love Productions, and up to 0.2 billion pounds ($0.27 billion) in performance-related earnout.
The announcement comes just a week after Comcast set plans to spin off its NBCUniversal and Sky operations into a separate company.
The proposed deal would create a U.K. media powerhouse and create the scale the companies say they need to compete effectively with global streaming players.
ITV already reaches around 40 million people every week and serves more than 16.5 million monthly digital users. Combined with Sky, the business would account for around 20% of all in-home viewing in the U.K.—second to the BBC and ahead of YouTube—and create a British commercial streaming champion.
But analysts point out that the combination would also control about 70% of the U.K. TV ad business and that the proposed deal will face extensive regulatory review.
The deal combines ITV’s ad-supported, free-to-air broadcast platform with Sky’s portfolio of pay TV, streaming, broadband, mobile and business services. Comcast and ITV said the combined entity’s diverse revenue streams would provide a resilient and durable business model.
“This is a defining moment for British media and an opportunity to build a stronger future for two of the U.K.’s most loved and trusted brands,” Sky Group CEO Dana Strong said. “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 U.K. continue to enjoy outstanding British programming in a rapidly changing world,“ she added. “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 ITV channels and ITVX will remain free-to-air and will continue to meet their public-service broadcasting commitments, Sky said, with ITV’s entertainment and national and regional news programs remaining intact. ITV News and Sky News will also remain as distinct editorial voices, Sky said.
Sky also struck a five-year, 2.1 billion-pound ($2.8 billion) content supply deal with ITV Studios, effective upon the deal’s completion.
“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,” ITV plc CEO Carolyn McCall said. “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 programs 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 U.K,’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.”
