Sky’s Up to £1.6 Billion ITV Deal Creates a New UK Media Giant in the Streaming Era
Comcast-owned Sky has agreed to buy ITV’s Media and Entertainment business in a deal worth up to £1.6 billion, creating what is set to become one of the largest commercial broadcasting groups in the United Kingdom and marking one of the most significant restructurings in British television in years. The transaction, announced on 6 July, is agreed but not completed, remains subject to regulatory approval, and is expected to close in the second half of 2027.
The deal gives Sky control of ITV’s free-to-air channels and its ITVX streaming platform, while ITV Studios, the group’s production arm, stays outside the sale as a separate London-listed global content business. The strategic logic is clear: traditional broadcasters are trying to build enough scale in content, advertising, streaming and distribution to compete more effectively with global platforms such as Netflix, YouTube and Amazon Prime Video.
The deal structure
Under the terms, Sky will pay £1.2 billion in cash for the broadcasting unit at completion, and Comcast will transfer Sky’s Love Productions business, the maker of The Great British Bake Off and The Piano, to ITV Studios at an agreed value of £200 million. Those two components together are worth £1.4 billion, our calculation, and ITV can receive up to a further £200 million in cash, dependent on the strength of its 2027 advertising revenue, which takes the headline value to up to £1.6 billion. That earn-out would be paid in the second half of 2028.
The structure leaves ITV Studios as the centre of the company that remains. Rather than a smaller broadcaster, the retained business will be repositioned as a pure-play global producer and distributor of television formats, scripted content and entertainment programmes, listed in London, with Love Productions folded into its content engine.
The valuation is disciplined, not aggressive
The price looks more like a mature media valuation than a high-growth streaming multiple. ITV’s Media and Entertainment division generated £1.991 billion of revenue in 2025, down about 5 percent from £2.102 billion in 2024, while total advertising revenue fell to £1.723 billion from £1.820 billion and the division’s adjusted operating profit, on an EBITA basis, declined to £234 million from £250 million, an 11.8 percent margin. Against that £234 million, the £1.4 billion base package implies roughly 6.0 times adjusted EBITA, our calculation, rising to about 6.8 times at the full £1.6 billion. On revenue, the base value is about 0.7 times 2025 divisional revenue, or 0.8 times if the full earn-out is met. That is a realistic multiple for a business with national reach and strong brands but also exposure to the structural decline of linear-television advertising.
The more attractive part of the asset is digital. ITV’s Media and Entertainment digital revenue rose 10 percent in 2025 to £614 million, digital advertising revenue increased 12 percent to £540 million, total streaming hours rose 16 percent to 2.304 billion, and monthly active users climbed 12 percent to 16.5 million. Sky is therefore not only buying legacy channels; it is buying a scaled UK streaming and advertising platform with established audience behaviour.
ITV Studios becomes the remaining company
After the sale, ITV’s investment case will revolve around ITV Studios. The division generated £2.130 billion of total revenue in 2025, up 5 percent, with adjusted EBITA of £297 million and a 13.9 percent margin, and its external revenue, the sales it makes to third parties including global streamers, grew 10 percent. The retained business also gains a long-term supply agreement: Sky has committed to spend at least £2.1 billion on content over 2028 to 2032, an average of about £420 million a year, our calculation, giving the standalone producer a substantial base of contracted demand and reducing the risk that it is left without a major domestic buyer after the separation.
Sky is buying scale
For Sky, the acquisition expands its reach across free-to-air television, pay television, streaming and advertising at a time when audiences are fragmenting and advertising budgets are shifting toward digital platforms with stronger data capabilities. ITV brings broad national reach and a large free-to-air audience, while Sky adds pay-television subscribers, streaming technology and premium sports. Together they are trying to build a larger domestic advertising and content platform able to stand against global streamers and digital advertising giants.
Regulation is the main hurdle
The transaction will face close review from the UK Competition and Markets Authority and the media regulator Ofcom. The central issues are expected to be advertising concentration, since the combined group would account for a large share of the UK television advertising market, along with media plurality, public-service-broadcasting obligations, and the implications of Sky News owner Comcast gaining indirect exposure to ITN, the producer behind ITV News, Channel 4 News and 5 News. Public-service commitments are already locked into the framework: Ofcom renewed the Channel 3 and Channel 5 licences from 1 January 2025 for ten years, securing public-service broadcasting on those channels until 31 December 2034, so news, regional output and public-service obligations remain in place even if ownership of the Media and Entertainment business changes.
Why it matters: This is more than a single UK media transaction. It is a signal of how traditional broadcasting is changing globally, as national channels that once competed mainly with each other now compete with global streaming platforms, digital advertising giants and technology-led distributors. For ITV, the deal unlocks cash and leaves a cleaner, content-focused Studios business; for Sky, it adds free-to-air reach, ITVX scale and a stronger advertising platform; and for the UK market, it creates a larger commercial broadcaster while raising real questions about concentration and plurality. For MENA media groups, telecom operators and investors, the lesson is direct: local content, sports rights, streaming platforms and advertising technology are increasingly connected, and scale is becoming strategic rather than optional in a market dominated by global platforms.
Outlook: The deal now moves from commercial agreement to regulatory test. If approved on the current terms, it would reshape British television by creating a larger Sky and ITV platform on one side and a standalone ITV Studios on the other, with completion targeted for the second half of 2027. If regulators require remedies or delay clearance, the final structure could still change before it closes.
Sources: ITV; Sky; Ofcom; Reuters; CNBC.
