ITV sells its broadcast arm to Sky for £1.6bn — what it means for shareholders

ITV plc confirmed at 9:13am on Monday 6 July 2026 that it has agreed to sell its media and entertainment business — including its free-to-air television channels and the ITVX streaming service — to Sky, the Comcast-owned pay-TV operator, for total consideration of up to £1.6 billion (ITV, 6 July 2026).

The deal, which has been in negotiation since November 2025, reshapes British broadcasting and transforms ITV plc from a dual-structure broadcaster-producer into a pure-play global content company. Here’s what it means for shareholders.

What exactly is being sold?

ITV is selling its Media and Entertainment (M&E) division to Sky. This includes:

• ITV’s free-to-air television channels, including ITV1, ITV2, ITV3, ITV4, ITVBe and CITV
• ITVX, ITV’s streaming platform, which had 16.5 million monthly active users as of mid-2026 and grew nearly 60% over four years (ITV, 6 July 2026)
• ITV’s advertising sales operation, which generated £2 billion in revenue in 2025 and held a 32% share of commercial TV viewing (Deadline, 6 July 2026)

What is NOT being sold: ITV Studios, the production arm behind shows including I’m a Celebrity…Get Me Out of Here!, Coronation Street, Emmerdale, Love Island and Mr Bates Vs The Post Office. ITV Studios will remain a separately listed company on the London Stock Exchange.

As part of the deal, Sky’s Love Productions business — maker of The Great British Bake Off and The Piano — will transfer to ITV Studios, valued at £200 million (ITV / Variety, 6 July 2026).

How much are shareholders getting?

The headline consideration of £1.6 billion breaks down as follows:

• £1.2 billion: cash paid by Sky at completion (expected H2 2027)
• £200 million: Love Productions, transferred from Sky to ITV Studios
• Up to £200 million: contingent earn-out payable in H2 2028, subject to ITV M&E total advertising revenue hitting £1.7 billion in fiscal 2027

After approximately £185 million in transaction and separation costs, net cash proceeds are projected at around £1.05 billion. ITV plans to use the proceeds first to reduce ITV Studios’ leverage to approximately 1.5 times net debt to EBITDA, then return approximately £950 million to shareholders — equivalent to around 25p per share, excluding any contingent consideration (Variety, 6 July 2026).

ITV’s share price has fallen approximately two-thirds from its 2015 highs amid a prolonged TV advertising downturn. The deal values ITV M&E at an EV/EBITDA multiple of 5.6 to 6.4 times 2025 earnings — in line with recent comparable transactions, according to ITV. (Deadline / Variety, 6 July 2026)

What happens to ITV Studios?

ITV Studios — the production company that makes some of the UK’s most-watched shows — will become a standalone publicly listed company on the London Stock Exchange following the deal’s completion. It is explicitly not part of the Sky acquisition.

After the transaction, ITV Studios will operate with:

• Adjusted EBITA margins of 13–15% (ITV, 6 July 2026)
• Average profit-to-cash conversion of approximately 80%
• A long-term content supply agreement with the combined Sky/ITV M&E, guaranteeing a minimum spend of £2.1 billion between 2028 and 2032
• Love Productions added to its portfolio, bringing Great British Bake Off and The Piano under ITV Studios ownership

ITV has indicated it will hold a Capital Markets Day before the deal closes to set out ITV Studios’ standalone strategy. Existing shareholders in ITV plc will effectively hold shares in the new ITV Studios entity after separation.

For more on how corporate deals can affect share prices, see IG’s guide to how to buy and invest in IAG shares as an example of post-restructuring equity analysis.

Why is Sky buying ITV’s broadcast arm?

The deal reflects the structural pressure facing all traditional broadcasters from global streaming platforms. Sky and ITV’s combined TV and streaming viewing share stood at 18.3% in May 2026 — just behind YouTube’s 18.6% (BARB, via Deadline, 6 July 2026).

Sky CEO Dana Strong described the deal as “a defining moment for British media.” The combined entity will have a larger content budget and the technology infrastructure to compete more directly with Netflix and YouTube for UK streaming audiences. Sky is owned by Comcast, which is in the process of spinning out its Sky European business into a standalone listed company under NBCUniversal.

ITV chair Andrew Cosslett said: “For over seven decades, ITV has played an important and cherished role in the public life of the nation.” The free-to-air status of ITV channels and ITVX is guaranteed to continue post-completion — Sky has committed to maintaining ITV’s public service broadcasting obligations in full (ITV, 6 July 2026).

What are the risks to the deal?

The transaction is subject to regulatory approval and is not expected to complete until H2 2027. Key risks include:

• Regulatory clearance: a deal combining the UK’s dominant free-to-air broadcaster with its largest pay-TV operator will face scrutiny from Ofcom and potentially the Competition and Markets Authority. Sky and ITV appear confident of clearance given the pressure both face from global tech platforms — but any conditions imposed could alter deal economics
• Advertising revenue earn-out: the contingent £200 million payment is tied to ITV M&E achieving £1.7 billion in total advertising revenue in 2027. If ad market conditions deteriorate, this portion of the consideration may not be received
• ITV Studios standalone transition: becoming a standalone listed entity is a significant operational change. The first Capital Markets Day will be closely watched by investors for evidence of a credible standalone strategy

ITV-Sky deal summed up

• ITV selling its M&E division — channels and ITVX — to Sky for up to £1.6 billion; deal confirmed 6 July 2026
• £1.2 billion cash upfront; up to £200 million contingent on advertising performance; Love Productions (valued at £200 million) transferred to ITV Studios
• Shareholders set to receive approximately £950 million — around 25p per share — after transaction costs
• ITV Studios remains listed on the London Stock Exchange as a standalone global content business
• Deal subject to regulatory approval; expected to complete H2 2027
• Past performance is not a reliable indicator of future results. Capital at risk.

Frequently asked questions

Past performance is not a reliable indicator of future results.