Sky has committed to spending £2bn on ITV Studios over the next five years, a cornerstone of its proposed £1.6bn takeover of ITV’s broadcast and streaming arm that will secure the future of programmes including Coronation Street, Emmerdale, Love Island and I’m a Celebrity… Get Me Out of Here!
The spending commitment, which continues an existing commercial partnership between the two companies, is not new money, according to a source. Sky already buys shows from ITV Studios and has agreed to maintain that arrangement for half a decade after the deal completes. The move is expected to put ITV Studios on a solid financial footing and guarantee the production of a wide slate of popular content.
Takeover Terms and Structure
Sky, the pay-TV group owned by US telecoms giant Comcast, has been in talks for months to acquire ITV’s Media and Entertainment division – the free-to-air channels and the ITVX streaming platform – for approximately £1.6bn (US$2.1bn). The deal is expected to be announced in early July, with terms reportedly agreed in late June.
The transaction includes a performance-based earn-out of roughly £200m linked to the future performance of the M&E division. As part of the agreement, ITV Studios will acquire Love Productions – the producer of The Great British Bake Off and The Piano – from Sky in an asset swap valued at between £80m and £120m.
One of the most complex challenges has been separating ITV’s broadcast and streaming operations from ITV Studios, which is not part of the acquisition and will remain a standalone company listed on the London Stock Exchange. Evercore and Morgan Stanley are acting as financial advisers to ITV on the deal.
The takeover marks the end of ITV’s 70-year history as a vertically integrated broadcaster. ITV was created in 1955 to challenge the BBC’s television monopoly, and its studios arm now comprises dozens of individual production companies that supply content not just to ITV but to rival broadcasters and streaming services – including Sky itself.
ITV Studios: The Production Powerhouse at the Heart of the Deal
ITV Studios is one of the world’s largest production companies, responsible for hits such as Love Island, I’m a Celebrity… Get Me Out of Here! and the acclaimed drama Mr Bates vs the Post Office. In 2025 it accounted for more than half of ITV’s total group revenue, which stood at £4.12bn – flat year-on-year.
The studio’s own revenues grew 5% to £2.13bn last year, driven by a 14% rise in its UK business to £989m, thanks to scripted titles made for streaming platforms. International revenues make up 59% of the total, though its US arm contracted by 21% to £310m amid a slowdown in the American production market.
ITV Studios’ role as a supplier to competing broadcasters and digital platforms – including Sky – underlines its strategic importance. By locking in £2bn of future spending from Sky, the company gains a guaranteed revenue stream that helps offset the loss of its former parent’s broadcast and streaming assets.
Strategic Ambitions and Market Impact
Sky’s ambition is to create a UK streaming champion by acquiring ITVX, the country’s biggest free, ad-supported streaming service. ITVX had 16.5m monthly active users in 2025, up from 14.7m in 2024, and digital advertising revenue rose 12% to £540m. ITV’s total advertising revenue, however, declined by 5% last year, and group adjusted EBITA fell 1% to £534m, though the company achieved £63m in permanent non-content cost savings.
The combination of ITV’s and Sky’s TV advertising sales operations would give Comcast potential control of more than 70% of the UK market. That prospect is expected to draw intense scrutiny from the Competition and Markets Authority (CMA) and the telecoms regulator Ofcom.
Industry sources have said Sky may have to consider remedies, including relinquishing its third-party sales deals – it currently represents advertising for Channel 5 and Disney in the UK. The CMA could also be prompted to reassess how it measures the advertising market to include digital advertising.
Rival broadcasters Channel 4 and Channel 5, which rely heavily on advertising revenue, are likely to oppose the deal on competition grounds. Sky has faced similar regulatory pushback before: in 2006-2007, BSkyB’s acquisition of a 17.9% stake in ITV was investigated by the Competition Commission, the OFT and Ofcom over concerns about market dominance and news plurality. Sky was ultimately forced to sell a significant portion of its stake at a loss.
News Plurality and ITN Stake
Ofcom is also expected to examine the implications of Comcast, which owns Sky News, taking over ITV’s 40% stake in ITN – the production company behind ITV News, Channel 4 News and 5 News. The remaining shares in ITN are held by Daily Mail and General Trust, Thomson Reuters and Informa, each with 20%.
Sky News was founded by Rupert Murdoch and launched in 1989 as the UK’s first 24-hour news channel. Comcast acquired Sky Group in 2018 and has guaranteed current funding levels for Sky News until at least 2028. The broadcaster operates as an editorially independent part of Sky UK.
Job Losses Expected
Analysts have predicted that the takeover could result in significant job losses at ITV as the two companies remove duplication across their operations.
Sky and ITV declined to comment on the deal.
