By Paul Sandle
LONDON, July 6 (Reuters) – Comcast’s Sky has agreed to buy the broadcast channels and streaming service of Britain’s ITV for £1.6 billion ($2.13 billion), creating a British champion with the scale to compete with global players like Netflix, Amazon and Disney.
Sky CEO Dana Strong said the deal, announced on Monday and confirming a recent Reuters story, was a “defining moment”, one of the biggest in the history of British broadcasting. It will now face scrutiny from regulators and lawmakers.
The combination of Britain’s biggest free-to-air commercial broadcaster and the pay-TV company Sky would have been unthinkable just a few years ago, but the rise of YouTube and the streaming giants, has left traditional companies exposed.
COMBINED COMPANY HAS 70% OF TV AD MARKET
The merger of the public service channels of ITV, and the leading pay-TV business of Sky, founded by Rupert Murdoch in 1989, would account for more than 70% of the UK television advertising market, analysts have said.
Many lawmakers have close connections with ITV locally, stemming from its foundation as a group of regional franchises more than 70 years ago. Culture Minister Lisa Nandy showed she had the appetite to shape media deals when she said last week that she could intervene in the U.S. Paramount-Warner tie-up.
Strong said the deal would deliver “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,” she said.
ITV LEFT AS STANDALONE PRODUCTION BUSINESS
Shares in ITV traded up 1% to 83 pence in early deals on Monday.
The deal will leave ITV as a standalone production business, making shows for the combined ITV-Sky, such as Love Island and Coronation Street, as well as other broadcasters and streamers globally, such as the hugely popular Rivals it makes for Disney.
The merged ITV-Sky company has committed to spend a minimum of £2.1 billion over 2028-2032.
ITV will receive £1.2 billion in cash, an earn out of up to £200 million dependent on its advertising performance in the 2027 financial year and also “The Great British Bake Off” maker Love Productions, which will join the remaining ITV Studios business, the companies said.
($1 = £0.7497)
(Reporting by Paul Sandle in London and Raechel Thankam Job in Bengaluru; additional reporting by Sarah Young, Editing by Sherry Jacob-Phillips and Kate Holton)
