Comcast’s U.K. pay-TV company, Sky, has officially agreed to purchase ITV’s Media and Entertainment sector for up to £1.6 billion ($2.14 billion).
The transaction, anticipated to conclude in the latter half of 2027, will see ITV Studios become an independent global content entity, distributing approximately £950 million ($1.27 billion) back to shareholders.
The deal includes £1.2 billion ($1.61 billion) in cash upon completion, Sky’s contribution of Love Productions—known for producing “The Great British Bake Off” and “The Piano”—valued at £200 million ($268 million), and up to £200 million ($268 million) in contingent payments tied to advertising revenue performance in fiscal year 2027, payable in the second half of 2028. As a Comcast subsidiary, both Sky and ITV’s Media and Entertainment division are set to become part of NBCUniversal following Comcast’s planned separation.
The sale is expected to yield approximately £1.05 billion ($1.4 billion) in net cash, after transaction and separation costs of about £185 million ($247 million). ITV intends to initially use the proceeds to reduce ITV Studios’ leverage to approximately 1.5 times net debt to EBITDA, subsequently returning around £950 million ($1.27 billion) to shareholders, equating to 25p per share, excluding any contingent payments.
As part of the agreement, ITV Studios will enter into a long-term content supply contract with ITV Media & Entertainment and Sky, covering programs like “Coronation Street,” “Emmerdale,” “Love Island,” “I’m a Celebrity…Get Me Out of Here!” and its daytime lineup, with a minimum guaranteed spend of £2.1 billion ($2.81 billion) from 2028 to 2032.
Andrew Cosslett, chair of ITV plc, remarked: “For over seven decades, ITV has played an important and cherished role in the public life of the nation. At a time of rapid change in the industry, it is right that we now secure ITV’s crucial role as a public service broadcaster and this transaction achieves this with ITV’s Media and Entertainment division combining with Sky to create a U.K. champion with the scale and resources to better compete with global streaming platforms.”
Carolyn McCall, CEO of ITV plc, expressed confidence in Sky’s ability to be a strong and responsible custodian of ITV Media & Entertainment, preserving its heritage while investing in its future and protecting the qualities that make ITV highly regarded by viewers, advertisers, and the U.K.’s creative industries.
McCall characterized the transaction as a continuation of ITV’s expansion into streaming via ITVX and its evolution into a leading global content producer. ITV’s public service broadcasting obligations, encompassing national, regional, and local news, remain safeguarded under the Channel 3 licenses acquired by Sky, valid until 2034.
Dana Strong, group CEO of Sky, commented: “This is a defining moment for British media and an opportunity to build a stronger future for two of the U.K.’s most loved and trusted brands.”
Strong noted that the deal respects ITV’s move into streaming through ITVX and brings together the various ways British audiences consume television under one roof.
“Bringing Sky and ITV Media & Entertainment together combines the very best of free-to-air television, pay-TV and streaming, ensuring viewers across the U.K. continue to enjoy 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,” Strong stated.
The deal values ITV Media & Entertainment at an EV/EBITDA multiple of approximately 5.6 to 6.4 times 2025 earnings, aligning with recent precedent transactions, as reported by ITV. After completion, ITV Studios is projected to function with adjusted EBITA margins between 13 to 15% and an average profit-to-cash conversion of around 80%. The company plans to conduct a Capital Markets Day prior to the deal’s finalization to outline its standalone strategy. The transaction awaits regulatory approval and does not require shareholder approval under U.K. Listing Rules.
