British broadcaster ITV has reached an agreement to sell its media and entertainment division to Sky, the pay-TV business owned by Comcast, for a headline price of £1.6 billion, the companies announced.
Under the terms of the deal, ITV will receive £1.2 billion in cash and an additional earn-out of up to £200 million that is conditional on the broadcaster's advertising performance in the 2027 financial year. The transaction also moves Love Productions - the maker of The Great British Bake Off - into the remaining ITV Studios operation.
Sky's chief executive Dana Strong said the combination marks a "defining moment" for British media. She framed the acquisition as a response to structural change in viewing habits and the growth of digital platforms, arguing that uniting Sky and ITV's media assets brings together free-to-air television, pay TV and streaming to preserve British programming for UK viewers.
ITV will continue as an independent production company after the sale, producing content both for the merged ITV M&E and Sky and for external broadcasters and streaming services around the world. The companies also announced that the newly combined ITV M&E and Sky have committed to a minimum spend of £2.1 billion over the 2028-2032 period.
The deal value in U.S. dollars was reported at $2.13 billion using an exchange rate of $1 = £0.7497.
Summary
The transaction transfers ITV's media and entertainment operations to Sky for £1.6 billion, comprising £1.2 billion cash, a potential £200 million earn-out tied to 2027 ad performance, and the inclusion of Love Productions. ITV will remain as a standalone production business. Sky described the move as a significant moment for British media, and the combined unit has pledged to invest at least £2.1 billion between 2028 and 2032.
Key points
- Sale price: £1.6 billion, with £1.2 billion paid in cash and up to £200 million in earn-out tied to 2027 advertising performance.
- Love Productions, the producer of The Great British Bake Off, will join ITV Studios' remaining production operations.
- The combined ITV M&E and Sky have committed to spend a minimum of £2.1 billion over 2028-2032.
Sectors impacted
- Media and entertainment - consolidation of free-to-air and pay-TV assets.
- Broadcast production - ITV to focus on content creation for multiple platforms.
- Advertising - earn-out linked directly to advertising performance in 2027.
Risks and uncertainties
- The earn-out payment of up to £200 million depends on ITV's advertising performance in the 2027 financial year, creating revenue-linked uncertainty for the full consideration.
- The longer-term outcomes of the combined unit's pledged £2.1 billion spend over 2028-2032 are subject to future execution and market conditions.
- The transaction leaves ITV as a standalone production business; the commercial performance of that business will depend on demand from the merged entity and other broadcasters and streamers.
($1 = £0.7497)