Sky’s bid for ITV shows how traditional broadcasters now see scale as the only way to compete with the might of Amazon, Netflix, Google and Meta.
Last week, ITV confirmed it is in preliminary talks to sell its broadcasting business — including its free-to-air TV channels and ITVX streaming service — to Sky for £1.6bn. The deal would not include ITV Studios, the production arm behind Coronation Street, Love Island and others.
ITV has been seeking a buyer for some time, a move that looks increasingly sensible given the past few weeks. Its biggest shareholder, Liberty Global, recently halved its 10% stake, while the company warned of a 9% drop in fourth-quarter ad revenue and announced £35m in cost cuts. ITV’s market value has slumped to around £2.5bn. Insiders expect CEO Carolyn McCall will look to sell the Studios business next, which could fetch roughly £3.5bn.
The surprise is less about ITV wanting out than Sky wanting in. It would be the conglomerate’s biggest domestic play since being bought by Comcast in 2018 for £30bn. Since then, Sky’s value has been written down by £1.2bn and, underlining its place as the black sheep of the Comcast family, wasn’t even mentioned in the multinational’s most recent earnings call.
But Comcast is clearly mirroring the thinking of other deals — such as the Skydance-Paramount merger or even Comcast’s own rumoured interest in Warner Bros Discovery — that the only way to compete with Silicon Valley giants is consolidation. It would make Comcast the dominant force in commercial British broadcasting while bolstering Sky’s declining customer base. ‘Sky is like a massive cruise liner with a small hole’, an inside source told Deadline, ‘it will sink eventually, but maybe ITV plugs this gap a little longer.’
The key question is whether it will be approved by Ofcom and the Competition and Markets Authority. In normal times this deal would be unthinkable. Sky and ITV command over 70% of the UK TV advertising market, a clear threat to the competitive landscape of UK broadcasting. But there’s increasing recognition that the old regulatory playbook may no longer suit the realities of today’s market.
With traditional broadcasters under siege from streaming services and big tech, analysts suggest that framing the takeover as a rescue deal for UK television is likely to be fruitful for Comcast. Media analyst Ian Whittaker described it as a ‘massive dare’ to Prime Minister Keir Starmer, testing his government’s willingness to prioritise industry survival over competition rules.
For now, the odds are in Comcast’s favour. The logic of scale is hard to resist, even if it comes at the cost of diversity in British broadcasting.
Main image by Janosch Diggelmann on Unsplash