Sky agrees deal to buy ITV’s channels, streaming service ITVX

Sky has announced a deal to acquire ITV’s TV channels and streaming service ITVX in a huge shakeup to the UK broadcasting landscape.

The agreement is worth £1.6 billion and sees Love Productions, which makes shows including The Great British Bake Off and The Great British Sewing Bee, move in the opposite direction.

ITV’s global production arm ITV Studios – maker of the likes of Coronation Street, Emmerdale, Love Island, Hell’s Kitchen USA, I’m A Celebrity… Get Me Out Of Here! and The Graham Norton Show – will remain a separate entity owned by the current ITV shareholders.

Under the terms of the arrangement, Sky has committed to a £2.1 billion deal with ITV Studios over a five-year period to guarantee the future of the most popular shows.

Sky has furthermore committed to keeping ITV free-to-air and honouring its public service commitments, as well as the editorial independence of ITV News and Sky News.

The broadcaster – owned by American firm Comcast, which also owns NBC – has said that it intends to make £200m in annual savings by the end of the third year after the deal goes through, aiming to achieve efficiencies through “efficiencies in marketing, technology platforms and non-UK content”.

A press release announcing the deal said that there would be “more free-to-air sport on ITV than ever before”, suggesting that Sky Sports’ extensive portfolio of rights – including the Premier League, the US Open tennis, golf and England cricket – could be utilised on ITV’s free channels as a shop window for Sky.

The deal is now subject to approval by regulators including the government’s Departure for Culture, Media and Sport and the Competition and Markets Authority.

Dana Strong, Sky Group CEO:

“This is a defining moment for British media and an opportunity to build a stronger future for two of the UK’s most loved and trusted brands. We have huge respect for the transformation the ITV team has delivered, particularly its successful move into streaming through ITVX, which has brought fantastic British content to millions of viewers across the UK.

“Bringing Sky and ITV Media & Entertainment together combines the very best of free-to-air television, pay TV and streaming, ensuring viewers across the UK continue to enjoy outstanding British programming in a rapidly changing world.

“ITV will remain a public service broadcaster at the heart of British life, and we’re excited about the future we can build together.”

Dame Carolyn McCall, ITV plc CEO:

“ITV has successfully evolved in a rapidly changing media landscape – launching, and scaling, ITVX and developing ITV Studios into a major force in the global content market. This transaction builds on that momentum to deliver clear, tangible value for shareholders. 

“At the same time, through the commitments made by Sky, the combined ITV M&E / Sky business will continue to deliver everything about ITV that our viewers and advertisers love and value and our people are hugely proud of – making programmes that reflect and shape society, bringing people together for shared experiences and having the quality, diversity and plurality that are the hallmarks of our contribution to the UK’s creative industries. In addition, all of ITV’s PSB commitments, including regional and national news, are safeguarded under the terms of the Channel 3 Licences until 2034, which Sky is acquiring as part of the Transaction. 

“I am also confident that Sky will be a strong and responsible custodian of ITV M&E, building on its heritage while investing in its future and safeguarding the qualities that make ITV so valued by viewers, advertisers and the UK’s creative industries.”

Andrew Cosslett, ITV plc Chairman:

“For over seven decades, ITV has played an important and cherished role in the public life of the Nation. At a time of rapid change in the industry, it is right that we now secure ITV’s crucial role as a Public Service Broadcaster and this transaction achieves this with ITV’s Media and Entertainment division combining with Sky to create a UK champion with the scale and resources to better compete with global streaming platforms.

“At a headline value of up to £1.6bn, the sale of ITV’s M&E division will deliver a significant cash return to shareholders. Crucially, the transaction also unlocks the value of ITV Studios which post completion will be a distinctive pure-play global content business, with a strong track record of success and excellent prospects, further underpinned by a long-term partnership with ITV M&E and Sky.”