ITV recently confirmed that it is in “preliminary” talks to sell its television business to US media group Comcast owned Sky in a £1.6bn deal that would create a major UK broadcast and streaming group.
The deal is expected to make Sky one of the UK’s largest commercial broadcasters. However many industry analysts doubt for the sale of ITV television network to go as smoothly as the acquisition is expected to attract significant regulatory scrutiny around the concerns of monopolisation of the domestic TV advertising market.
As per a report by Financial Times, the combined business of ITV and SKY could have as much as a 70 per cent share of the UK TV advertising market, a level that would normally lead to opposition from the UK competition regulator.
The talks focus on ITV’s Media and Entertainment division, which includes its free-to-air TV channels as well as the ITV X streaming service. The discussions with Sky come at a crucial time for broadcasters in the UK as television companies face fierce competition from streaming services such as Netflix and Disney+.
In a statement released on Friday, ITV said it was in preliminary discussions about a possible sale of its media and entertainment business to Sky for an enterprise value of £1.6bn. As the word for the potential sale spread along, ITV shares rose as much as 19 per cent on Friday and were up almost 14 per cent at 77 pence in lunchtime trading.
“There can be no certainty as to the terms upon which any potential sale may be agreed or whether any transaction will take place,” the company added towards the end of its statement. The deal would not include ITV’s production arm – ITV Studios – which makes popular programmes such as Love Island and I’m a Celebrity… Get Me Out of Here.
Multiple media reports suggest that while the two businesses are expected to be run separately under any deal, potential partnerships in technology investment and support functions are not completely off the table. Sky and ITV also own complementary portfolios of sports rights for Premier League football, the Euros and Six Nations rugby. ITV’s stake in news broadcaster ITN is also expected to be included in the deal, raising the prospect of crossovers with Sky News.