ITV has said it is in “preliminary” discussions to sell its broadcasting business to Sky for £1.6bn, a move that could reshape the UK’s television landscape.
The talks focus on ITV’s Media and Entertainment division, which includes its free-to-air TV channels as well as the ITV X streaming service.
The discussions with Sky, which is owned by US-based Comcast, come as the television industry faces fierce competition from streaming services such as Netflix and Disney+.
The deal would not include ITV’s production arm – ITV Studios – which makes popular programmes such as Love Island and I’m a Celebrity… Get Me Out of Here.
Comcast, which owns Universal Studios, bought Rupert Murdoch’s Sky in 2018 and is a major player in the US media landscape.
It owns NBCUniversal, which contains the NBC and CNBC channels, DreamWorks Animation and streaming service Peacock.
Media analyst Ian Whittaker told the BBC’s Today programme that a combination of Sky and ITV would mean they 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 rising competition from the streaming services raising questions over the future of TV, a takeover could be seen as almost a rescue deal.
Sir Peter Bazalgette, television executive and producer, who was chair of ITV until September 2022 and is a shareholder in the company, told the Today programme that the deal made sense given the pressure from streamers.
On the question of whether a Sky-ITV link up would run up against competition issues, Sir Peter said the regulator needed to “redefine” what the advertising market is.
He said Google and Facebook owner Meta should be treated as the rivals, not the traditional TV advertising market.
Talking about ITV’s TV channels, he said: “Free to air channels across world are not seen to have a great amount of value,” adding that “there’s going to be an inevitable consolidation of domestic broadcasters all across Europe”.
Mr Whittaker said streaming was where the growth was for broadcasters – even though with established streamers “the penetration rates have started to level off in the past couple of years” in the UK.
He added that competition was also now coming from YouTube TV, which showed live events such as sports and news.
A recent report from media regulator Ofcom found that YouTube has become the UK’s second most-watched media service, behind only the BBC.
Big live sporting events, traditionally shown on television, may also increasingly move to streamers as sporting giants such as UEFA seek to cash in on the huge streaming market.
ITV Studios, which makes programmes for several platforms including the BBC, Netflix and Amazon, has reportedly been the subject of takeover talks in the past.
It made the hit TV series Alan Bates vs The Post Office, and popular anime series One Piece on Netflix.
ITV’s share price was up 15% at about 78p following news of the takeover talks, although that remains well below the high of 258p reached in 2015.
Liberty, one of ITV’s biggest shareholders, recently sold half of its 10% stake in the broadcaster.
But Liberty might be “kicking itself” at this move, said Dan Coatsworth, an analyst at AJ Bell.
He said it was “a surprise” there was an interest in ITV’s TV channels, describing it as a “ball and chain” compared with ITV Studios, which he called “the jewel in ITV’s crown”.
Sky’s interest was “Christmas come early for management and shareholders”, he added, saying ITV Studios could be “an instant takeover target itself” as content-hungry streamers seek a hub to generate more programmes to feed their platforms.
On Thursday, ITV forecast that its advertising revenue would be 9% lower in the last three months of 2025, saying that advertisers were being cautious ahead of expected tax rises in the Budget.
The broadcaster also said it would carry out a further £35m in cost savings, which would lead to some programmes being delayed until next year.