British broadcaster ITV has confirmed it has received a £1.6 billion ($2.1 billion) bid from Comcast’s pay-TV platform Sky for its media and entertainment division.
The shocking news – which would fundamentally change the UK broadcasting landscape – would give Comcast, which will take control of ITV’s linear channels and ITVX streaming business, significantly expanding its footprint in British television after already acquiring Sky for around $30 billion in 2018.
Sky’s bid is reportedly focused on the potential creation of a UK-focused streaming giant.
In a brief statement sent on Friday morning, ITV said: “We refer to recent media speculation and confirm that we are in preliminary discussions about the potential sale of our M&E business to Sky for an enterprise value of £1.6bn.”
It added: “There can be no certainty as to the terms on which a potential sale will be agreed or whether a transaction will take place. Further announcements will be made in due course, if appropriate.”
The talks do not include ITV Studios, ITV’s production and sales arm, which produces shows such as Love Island, I’m a Celebrity and the drama Mr Bates vs. the Post Office, and has been at the center of a number of takeover rumors in recent years. RedBird IMI and Banijay are believed to have expressed interest in the sector.
The idea of selling ITV’s television business to Sky, which is only provisional but subject to regulatory approval, has thrown Britain’s broadcasting industry into turmoil.
Zhao Pacey, partner and general counsel at media and entertainment law firm Simkins LLP, said: “ITV’s proposed £1.6bn sale of its media and entertainment division to Sky could be a turning point for British television. “This is more than just a sale, it is a sign that the UK broadcaster is rethinking how it operates in a rapidly changing media landscape. By offloading its traditional TV channels and streaming service ITVX, ITV aims to reduce its reliance on unpredictable advertising and instead focus on producing content that can be sold globally.”
Confirmation of the deal talks comes shortly after ITV reported that it would “temporarily” cut $46 million from its budget due to the UK’s “softening economy” and uncertainty for advertisers. Advertising revenue is expected to fall 9% in the crucial fourth quarter leading up to Christmas.
ITV shares rose 18% at the start of trading in London on Friday following news of a potential deal with Sky.
