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Sky in preliminary £1.6bn talks to buy ITV's TV and streaming division
Sky, owned by US media giant Comcast, is in early discussions to acquire ITV's Media and Entertainment business-including its free-to-air channels and ITV X streaming platform-for **£1.6 billion**, a potential deal that could reshape Britain's television industry.
The proposed transaction, confirmed by ITV on Friday, excludes the broadcaster's production unit, **ITV Studios**, responsible for hits like *Love Island* and *I'm a Celebrity... Get Me Out of Here*. Analysts warn the deal could complicate ITV's ability to secure future shows from its own production arm, as the channel would compete with rivals in bidding wars.
Regulatory hurdles and market dominance concerns
Industry experts suggest the merger-combining Sky's pay-TV dominance with ITV's ad-funded channels-could control over **70% of the UK's television advertising market**, a concentration that would typically face regulatory scrutiny. However, analysts argue the rise of global streamers like Netflix and Disney+ may prompt authorities to reassess competition rules.
"In normal circumstances, this would be rejected, but the streaming threat changes the game," said Ian Whittaker, a media analyst, noting that regulators might view the deal as a "rescue" for traditional broadcasters under pressure.
Sir Peter Bazalgette, ITV's former chairman, urged regulators to broaden their definition of the advertising market to include tech giants like **Google (Alphabet)** and **Meta (Facebook)**, rather than focusing solely on traditional TV rivals.
Streaming wars and the decline of linear TV
The potential sale reflects broader industry shifts. A recent **Ofcom** report revealed **YouTube** has overtaken ITV to become the UK's second-most-watched service after the BBC, while live sports-once a TV staple-are increasingly migrating to streaming platforms. UEFA and other rights holders are capitalizing on the shift, luring events away from traditional broadcasters.
ITV Studios, which produces content for Netflix, Amazon, and the BBC (including *Alan Bates vs The Post Office* and *One Piece*), has long been seen as the company's most valuable asset. Analyst Dan Coatsworth called the division "the jewel in ITV's crown," contrasting it with the "ball and chain" of its legacy TV channels.
"Streaming is where the growth is, even if penetration has plateaued," said Whittaker, pointing to new competitors like **YouTube TV**, which now offers live news and sports.
Financial pressures and shareholder reactions
ITV's shares surged **15%** to **78p** on the news, though they remain far below their 2015 peak of **258p**. The broadcaster also warned on Thursday that ad revenue would drop **9%** in Q4 2025, citing advertiser caution ahead of expected tax hikes in the upcoming Budget. To offset declines, ITV plans an additional **£35 million in cost cuts**, delaying some programs until 2026.
Liberty Global, a major ITV shareholder, recently halved its **10% stake**, a move analysts called "premature" given the renewed interest in ITV's assets. AJ Bell's Dan Coatsworth suggested the Sky deal could make ITV Studios an immediate takeover target for content-hungry streamers.
Industry consolidation ahead?
Bazalgette predicted further mergers across Europe as free-to-air broadcasters struggle to compete with deep-pocketed streamers. "Consolidation is inevitable," he said, noting that linear TV's value has diminished globally.
