ITV has confirmed that it is in preliminary talks over the sale of its media and entertainment arm to Sky.
“ITV notes the recent press speculation and confirms that it is in preliminary discussions regarding a possible sale of its M&E business to Sky for an enterprise value of £1.6 billion,” it said in a shareholder statement on Friday morning (7 November).
“There can be no certainty as to the terms upon which any potential sale may be agreed or whether any transaction will take place. A further announcement will be made in due course if appropriate.”
The sales discussion focuses on ITV’s Media and Entertainment division, which includes its TV channels as well as its streaming service, ITV X. The company recently entered into deals with Disney to share content in the UK.
Sky is owned by US-based Comcast, a competitor of Disney and Netflix, with the potential sale being seen as a play in the highly competitive streaming wars between the companies.
However, even the traditional streamers are losing ground to other social media services such as YouTube. In July, Ofcom warned that traditional public-service TV is endangered and that public broadcasters must work with global tech firms to survive. With audience choice wider than ever and viewing shifting to online third-party platforms, the distribution of public service media (PSM) must evolve, the regulator said.
Media analyst Ian Whittaker told the BBC that a combination of Sky and ITV would mean that had “70% plus” of the UK TV advertising market, which he said “in normal circumstances” would be rejected by regulators because of the dominance it would give them.
But he added that with questions hanging over the future of TV, a takeover could be seen as almost a rescue deal.
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