ITV is in talks to sell its broadcasting arm to Sky in a £1.6billion deal that could transform the UK television industry and leave its biggest commercial operator under foreign control.
The ‘preliminary discussions’ would involve the sale of ITV’s media and entertainment arm – which includes its TV channels and streaming service ITVX – to Sky, which is owned by US giant Comcast.
Sky’s long-term ambition is to create a UK streaming champion to compete with Netflix, Amazon and Disney.
The deal would not include ITV Studios, the production arm which makes most of the channel’s content such as Coronation Street, Emmerdale and Love Island (hosted by Maya Jama), as well as shows screened by the BBC and Netflix.
It would, however, include ITV Sport, whose offerings include international football and rugby. Sky’s key interest in the broadcaster lies in the 40m registered users of ITVX.
The platform could serve as a ‘shop window’ for Sky productions such as The Day Of The Jackal and Gangs Of London, with the idea that screening previous series for free to streamers could lure them into signing up to paid-for content, insiders believe.
Talks: The deal would not include ITV Studios, the production arm which makes most of the channel’s content such as Coronation Street and Love Island (hosted by Maya Jama, pictured)
That will raise speculation that Sky Sports might also occasionally screen some of its content such as Premier League games on ITV platforms. It already shows some sports to all Sky TV customers, including those without a sports subscription, on its Sky Sports Mix channel.
Sky would also be buying the 40 per cent stake that ITV holds in ITN, which provides ITV’s news. Sources played down any suggestion of merging the news operation with Sky News. Sky declined to comment. Shares in ITV surged 16.6 per cent, or 11.25p, to 78.95p.
Claire Enders, of Enders Analysis, said: ‘It would be a transformative move by Sky and ITV and it would potentially be a very good fit. It is a daring and very brave move.’
But she suggested it may take 18 months to reach an agreement and get the deal past regulators, with the combined company having a 70 per cent share of the TV advertising market.
Former ITV chairman Sir Peter Bazalgette told the Financial Times the regulator should take into account that the market has been transformed by the likes of YouTube-owner Google and Meta, parent of Facebook and Instagram, which also now vie for advertising revenues.
ITV’s disclosure of the deal talks comes a day after it warned of a slump in advertising as businesses cut spending following warnings of Budget tax rises.
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