Sky has agreed a £1.6 billion ($3.1 billion) deal to acquire ITV’s broadcasting and streaming arm (ITV Media & Entertainment) in a deal that would create the UK’s largest commercial broadcaster and heavily concentrate the TV advertising market.
Subject to regulatory approval, the deal has been positioned as creating a “commercial streaming champion for the UK” that can take on the rise of US streamers including the likes of Netflix, YouTube, Disney+, Amazon Prime and HBO Max.
If rubber stamped, Sky’s parent company, Comcast, would be in control of a media business that reaches 21 million UK households, and accounts for around a fifth of in-home viewing, after the BBC and ahead of YouTube.
Furthermore, the combined advertising revenue of Sky and ITV, around £2.3 billion, accounts for 44 per cent of television ad revenue.
As Sky also handles sales of Warner Bros Discovery, Paramount-owned Channel 5 and other programmatic inventory, Sky Media’s share as a sales house could reach 60 per cent of the market, according to analysis by Madison and Wall.
The deal does not include ITV Studios, which produces around 60 per cent of its content, including I’m A Celebrity…Get Me Out of Here, Coronation Street and Love Island. Comcast has transferred Sky’s Love Productions to ITV Studios as part of the arrangement.
Under terms of the deal, Comcast will continue to honour a £2.1 billion minimum content supply agreement with ITV Studios from 2028 through 2032.
“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,” Sky Group CEO Dana Strong said.
“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.”
ITV chief executive Carolyn McCall added: “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.”
What this means for Australia
The consolidation of the UK’s two largest commercial TV broadcasters and streamers responds to the threat that local broadcasters face from global streaming giants and video platforms from Meta, Google and TikTok.
Broadcast TV revenue in the UK has declined by 7 per cent year-on-year, with forecasts indicating a consistent structural decline, as audiences fragment to other platforms. Meanwhile, the digital video TV market is forecast to grow by 36 per cent year-over-year in 2025 and settle down to double-digit growth in future years, per Madison and Wall.
It’s a scenario that is playing out in Australia.
The broadcast TV ad market has been down high single digits, while digital video revenue has soared, but the revenue is being spread across a growing number of streamers.
Scale in this market does matter, which has ponders the question of whether Australia is large enough to sustain three commercial FTA broadcasters in the medium to long term.
Commercial broadcasters Seven, Nine and Network Ten have been in regular talks about how to consolidate parts of their operations, such as pooling resources behind the camera, sales operations and making it easier for to buy inventory across the market rather than in siloes.
Nine already operates represents HBO Max, and previously Multi Channel Network used to sell ads for Ten and Foxtel.
Although there have not been discussions to merge TV networks, there has been consolidation of companies that operate in different media channels, notably Seven West Media’s combination with SCA, and Nine’s acquisition of outdoor company QMS.
Australia is already one of the most concentrated media markets in the world but many media analysts and media buyers predict that we are likely to see more, not less consolidation.
On the programming front, it’s business as usual. ITV Studios Australia produces local hits for Seven, Nine, SBS and Network 10, including The Voice Australia, Love Island Australia, My Kitchen Rules, Alone Australia, Shark and I’m A Celebrity…Get Me out of Here. Sky has several ongoing content partnerships with Foxtel.
