Sky to Buy ITV’s Media Arm for Up to $2.1 Billion
Sky, a pay-TV operator owned by Comcast, has officially announced its acquisition of ITV’s Media and Entertainment business for a total consideration of up to £1.6 billion ($2.14 billion). The deal is set to close in the second half of 2027 and will see ITV Studios becoming a standalone global content business while returning approximately £950 million ($1.27 billion) to shareholders.
The consideration for the acquisition includes £1.2 billion ($1.61 billion) in cash at completion, the addition of Sky’s Love Productions valued at £200 million ($268 million), and up to £200 million ($268 million) in contingent payments tied to advertising revenue performance in fiscal 2027. Both Sky and ITV’s M&E business are expected to become part of NBCUniversal once Comcast’s planned separation is finalized.
Following the sale, net cash proceeds are estimated to be around £1.05 billion ($1.4 billion) after accounting for transaction and separation costs. ITV intends to use the proceeds to reduce ITV Studios’ leverage and return approximately £950 million ($1.27 billion) to shareholders, equivalent to 25p per share.
As part of the transaction, ITV Studios will enter into a long-term content supply agreement with ITV M&E and Sky, covering popular shows like “Coronation Street,” “Emmerdale,” “Love Island,” and “I’m a Celebrity…Get Me Out of Here!”. The agreement includes a guaranteed minimum spend of £2.1 billion ($2.81 billion) between 2028 and 2032.
Andrew Cosslett, chair of ITV plc, emphasized the importance of securing ITV’s role as a public service broadcaster and creating a UK champion to compete with global streaming platforms. Carolyn McCall, CEO of ITV plc, expressed confidence in Sky’s ability to preserve ITV’s heritage while investing in its future.
Dana Strong, group CEO of Sky, described the acquisition as a defining moment for British media, bringing together two beloved brands under one roof. The deal reflects a respect for ITV’s streaming efforts through ITVX and aims to cater to British audiences’ evolving viewing habits.
The transaction values ITV M&E at an EV/EBITDA multiple of approximately 5.6 to 6.4 times 2025 earnings, in line with industry standards. Post-completion, ITV Studios is expected to operate with adjusted EBITA margins of 13 to 15% and strong profit-to-cash conversion. Regulatory approval is required for the deal, which is not subject to shareholder approval under UK Listing Rules.
Overall, the acquisition marks a significant milestone for both Sky and ITV, paving the way for a stronger future in the rapidly changing media landscape. Stay tuned for further updates as the deal progresses towards completion.
