How ITV’s sale to Sky splits the broadcaster in two directions

ITV has agreed to sell its Media & Entertainment division, including its free-to-air channels and the ITVX streaming service, to Sky for up to £1.6 billion ($2.16 billion). The companies announced the deal on July 6, 2026.

The transaction leaves out ITV Studios, the production arm behind shows including Coronation Street and Love Island, which will separate into its own London-listed company. One deal is pushing ITV’s businesses toward opposite strategies at the same time: its broadcast operations toward scale inside Sky, and its production arm toward a narrower, standalone focus.

What Sky Is Buying, and What ITV Is Keeping

According to ITV’s regulatory filing, the deal covers ITV’s broadcast operations, the ITVX platform, its regional and national news assets, and a 20% stake in Independent Television News. ITV Sport was added to the transaction perimeter as well.

Excluded is ITV Studios, the production business, which keeps making shows such as Coronation Street, Emmerdale, Love Island and I’m a Celebrity…Get Me Out of Here! — now supplying its former sister business under a content contract rather than as part of the same company.

Consideration is structured in three parts: £1.2 billion in cash at completion, Sky’s Love Productions business (maker of The Great British Bake Off and The Piano) valued at £200 million, and up to £200 million in contingent payments due in the second half of 2028. That earn-out pays £2 for every £1 of ITV’s total advertising revenue above £1.7 billion in fiscal 2027, capped at £200 million. ITV’s filing notes there is no certainty the threshold will be met.

The Five-Year Supply Deal
Under the transaction, ITV Studios will sign a content supply agreement with Sky and ITV M&E covering 2028 to 2032, guaranteeing a minimum spend of £2.1 billion on shows including Coronation Street, Emmerdale, Love Island and I’m a Celebrity…Get Me Out of Here!, according to ITV’s regulatory filing.

A Deal That Pulls ITV in Two Directions at Once

The transaction is built around two opposing economic bets. ITV’s Media & Entertainment business — free-to-air channels and ITVX — is being absorbed into a larger company, Sky, to gain scale against global streamers. ITV Studios, meanwhile, is doing the reverse: separating into what ITV’s own filing calls a “pure-play global content business,” trading the safety of a broadcast parent for a narrower focus on production alone.

Reporting on ITV’s business mix ahead of the deal showed why the split made sense to executives: ITV Studios grew 11% in the first nine months of 2025 even as the broadcaster’s advertising revenue fell, according to Market Screener’s coverage of the talks. The production arm’s growth trajectory looked stronger standing alone than bundled with a channels business facing an advertising slowdown.

The two halves stay financially tied regardless. ITV Studios will sign a five-year content supply agreement with Sky and ITV M&E running from 2028 to 2032, with a minimum spend commitment of £2.1 billion covering ITV’s flagship titles — meaning the newly independent studio keeps a guaranteed customer even after ownership splits.

The Price and the Payout

ITV said the deal values its Media & Entertainment business at roughly 5.6 to 6.4 times 2025 earnings before interest, tax, depreciation and amortization, which it described as in line with recent precedent transactions.

ITV plans to return about £950 million, or 25 pence per share, to shareholders after the deal closes. That figure comes after roughly £185 million in gross transaction and separation costs, and after first using proceeds to reduce ITV Studios’ net debt to 1.5 times EBITDA.

Market reaction on announcement day was muted rather than euphoric: ITV shares rose 1.2% to 82.69 pence, while Comcast shares had closed up 0.3% at $23.79 on Thursday, according to AJ Bell’s markets coverage.

The same transaction pushes ITV’s broadcast arm toward scale inside Sky and its production arm toward a narrower, standalone focus.

The Long Runway to Completion

ITV expects the sale to complete in the second half of 2027 — more than a year after the announcement. Completion is conditioned on antitrust and regulatory approvals, the operational separation of the Media & Entertainment business from the rest of ITV Group, and approval of the Love Productions transfer. The filing sets a longstop date of July 6, 2028, after which either side can walk away.

The filing also sets break fees: £80 million if the deal collapses over regulatory conditions, and £11.5 million if the Love Productions approval specifically falls through.

ITV chief executive Carolyn McCall said the company’s public service broadcasting obligations, including regional and national news commitments tied to its Channel 3 licenses running through 2034, will continue after the sale. Coverage of the deal’s competition implications noted that the size of the combined advertising-sales operation, and the fact that a US-owned company would carry statutory news obligations, are among the questions regulators are expected to weigh.

Why Everyone Is Chasing Scale

Analysts cited in coverage of the deal estimated that a combined Sky and ITV could control more than 70% of the UK television advertising market — though that figure shifts significantly depending on whether online video, social media and other digital advertising are counted alongside broadcast TV ad spend, a distinction competition reporting flagged as central to how regulators size up the deal.

ITV’s chairman described the combination as creating a “UK champion with the scale and resources to better compete with global streaming platforms,” positioned against rivals including Netflix, Amazon, Disney and YouTube. One analysis, using May 2026 Barb ratings data, put the combined Sky-ITV share of UK television and streaming viewing at 18.3%, just behind YouTube’s 18.6%, according to The Desk.

The deal follows a pattern of consolidation elsewhere in European and global media, including Comcast’s own £30 billion purchase of Sky in 2018 and Disney’s $71 billion acquisition of Fox’s entertainment assets, according to Market Screener’s account of comparable transactions. ITV Studios’ separation, by contrast, points toward the same shift toward being a pure content producer that companies including Warner Bros. Discovery and NBCUniversal have also made, according to Market Screener.

Photo: Des Blenkinsopp · CC BY-SA 2.0 · via Wikimedia Commons