Comcast-owned Sky has agreed to buy the broadcast television channels and streaming platform ITVX from British broadcaster ITV in a deal worth £1.6 billion ($2.13 billion), reported Reuters. The agreement brings together two of the UK’s biggest television companies as they try to compete with global streaming platforms such as Netflix, YouTube, Amazon and Disney.
Both companies said the merger would create a stronger British media business at a time when traditional television faces growing competition from online streaming services and digital platforms.
Sky chief executive Dana Strong described the agreement as a major step for the British television industry, reported Reuters. “This is a defining moment in British broadcasting,” said Dana.
She said the combined company would continue to invest in British programming while adapting to changes in how people watch television. “ITV will remain a public service broadcaster at the heart of British life, and we’re excited about the future we can build together,” she said.
Why are Sky and ITV joining forces?
The companies said viewers have increasingly shifted towards streaming platforms and online video services, putting pressure on traditional broadcasters that depend heavily on television advertising.
ITV has struggled with a weak advertising market for several years. Its share price has fallen about 36% over the past five years, reported Reuters. Sky and ITV believe joining forces will help them compete more effectively for viewers, advertisers and premium content.
ITV chief executive Carolyn McCall said the merger would strengthen investment in British television. “At a time of really rapid change in viewer behaviour and growing competition from US streamers for both audiences and advertisers, this deal strengthens British content investment,” said Carolyn, as reported by Reuters.
The combined business will reach more than 20 million households across the UK. Analysts say it would also account for more than 70% of the country’s television advertising market, including advertising sold on behalf of other broadcasters.
Even after the deal, ITV will continue to operate as a public service broadcaster under its licence, which runs until 2034. The broadcaster will continue producing national and regional news as well as original British programming.
Deal yet to receive approval from UK govt authorities
The deal must still receive approval from UK competition regulators and government authorities. Both companies expect a lengthy review because of the merger’s impact on the television advertising market and news broadcasting.
To address regulatory concerns, Sky could be asked to give up some third-party advertising sales contracts, including those linked to Channel 5. Sky said that it would continue supporting Sky News beyond 2029. The company said Sky News and ITV News would remain separate editorial operations.
Sky said some jobs would be affected after the merger. However, most of the expected £200 million in annual savings would come from marketing, technology and reducing spending on non-British content rather than large-scale job cuts, reported Reuters.
The transaction will also reshape ITV. The company’s television channels and streaming platform ITVX will become part of Sky, while ITV Studios will continue as a separate production business. It will keep making programmes for the merged company as well as for broadcasters and streaming platforms around the world.
Under the agreement, ITV will receive £1.2 billion in cash and could earn up to £200 million more if advertising targets are met in 2027, according to Reuters report. The company also plans to return about £950 million to shareholders.