The £1.6 Billion Fire Sale: Inside ITV’s Last-Ditch Fight to Stay Alive in the Streaming Wars
The £1.6 Billion Fire Sale: Inside ITV’s Last-Ditch Fight to Stay Alive in the Streaming Wars
ITV’s talks to sell its flagship TV channels to Sky reveal the brutal new economics of broadcasting—and the cold, calculated moves reshaping the media world.
ITV has confirmed that it’s in early discussions to sell its entire Media & Entertainment division—which includes ITV1, ITV2, and the ITVX streaming platform—to Sky, owned by Comcast, for about £1.6 billion. There’s no guarantee the deal will happen, but the details say plenty. ITV isn’t selling everything. It’s keeping ITV Studios—the creative engine behind Love Island and I’m a Celebrity... Get Me Out of Here!. In truth, this isn’t a merger. It’s more like a surgeon removing the healthy organs from a patient on life support.
Investors reacted fast. ITV shares jumped 18% when the market opened, though the underlying math is far from pretty. Media & Entertainment earned only £70 million in EBITA on £1.9 billion of revenue during the first half of 2025, both figures sliding fast. Sky would be paying around 23 times earnings for a business whose ad revenue ITV expects to drop 9% in the last quarter of the year. For perspective, ITV’s entire market cap sits between £2.5 and £3 billion, meaning this single division—the weaker side of the company—could fetch more than half that.
“In normal circumstances, regulators would block this because it gives Sky enormous dominance,” media analyst Ian Whittaker told the BBC’s Today program. “But with streaming shaking up the future of TV, regulators might see it as a rescue mission.” That’s the battleground now—rescue or monopoly.
The Collapse Beneath the Headlines
This isn’t Sky swooping in for a bargain. It’s ITV surrendering to years of pressure. The company’s value has plunged 75% in the past decade. It’s been forced to slice £35 million from its budget, delay shows, and scramble for stability. Most of ITV’s money still comes from advertising, but that well is drying up fast. Traditional TV viewing has been gutted by Netflix, Disney+, and most of all YouTube—which has now overtaken everyone except the BBC in UK viewership.
ITV’s free-to-air model just can’t compete on reach or precision. ITVX struggles with fragmented audiences, while global streamers throw billions at content and use algorithms that keep viewers glued. Live sports, once ITV’s trump card, have migrated almost entirely to streaming. The problem isn’t temporary—it’s structural.
ITV Studios tells a very different story. It earned £107 million EBITA on £893 million revenue in the first half of 2025—revenue actually grew while M&E’s shrank. Its international content business delivers far higher margins than selling 30-second ads to a shrinking audience. Analysts believe Studios alone could be worth more than the £1.6 billion Sky might pay for M&E. The strategy becomes obvious: cut off the melting ice cube and double down on the part that’s still growing.
Sky, for its part, sees an opportunity to scoop up distressed UK assets before the market resets. After selling its struggling German pay-TV arm to RTL for just €150 million, Comcast refocused on its strong UK base, supported by Premier League rights. Taking over ITV’s channels would merge Sky’s 20 million paying customers with ITV’s 10 million-plus free viewers, forming a UK streaming powerhouse with unmatched ad reach.
The math only works if Sky can save £100 million or more through overlapping costs in tech, marketing, and broadcasting. The key hurdle is regulatory: approval depends on whether the watchdogs define the competition as just TV—or the wider advertising world that includes Google, Meta, and TikTok.
Sir Peter Bazalgette, ITV’s former chairman, summed it up perfectly: “Regulators have to redefine what the advertising market actually is—Google and Meta are the real rivals now, not just TV networks.” That shift in thinking might get the deal approved, but it’ll take at least nine to twelve months of scrutiny from Ofcom and the Competition and Markets Authority, likely with strings attached.
The Investor Angle: Spotting a Hidden Opportunity
For investors, the deal sets up one of the most interesting mispricings in years. ITV’s market cap hovers around £2.6 to £3 billion. If M&E sells with a 75% chance of closing—say, a discounted value of £1.2 billion—the rest of ITV’s business (Studios, cash, and corporate) would effectively be priced at only £1.4 to £1.8 billion.
Now, value Studios conservatively at ten times its £260 million EBITA—below the multiples of global production peers—and you get £2.6 billion. Knock off £300-400 million for corporate costs and transaction friction, and the Studios unit alone is worth more than ITV’s total market value today. That’s the opportunity.
The picture sharpens when you factor in how ITV could use the cash. After taxes and debt repayments, the company could still have £1.2 to £1.4 billion to either buy back shares and close the valuation gap or go shopping for production houses to expand globally. Either way, the move would likely lift the stock.
Shareholders seem eager for action. Liberty Global recently halved its stake, leaving mostly index funds holding the stock—investors who would gladly take cash at a premium.
The big unknown is how regulators will see it. If they look only at TV, the deal raises red flags—a U.S. company owning Britain’s top commercial channels won’t sit well with everyone. But if they consider the entire video ad market, where Google and Meta dominate, this looks more like a fight for survival than a monopoly grab. Most analysts give the deal a 55–60% chance of approval, with a 12–15 month process ahead and likely conditions on news supply, regional coverage, and ad sales.
The Risks on the Horizon
The downside isn’t hard to imagine. The UK ad market could slump further, forcing Sky to renegotiate. Politicians might lash out over “U.S. control” of British television. Or regulators could drag things out so long that ITV’s financials decay further—making Sky’s 23x EBITA offer look laughably high by the end.
The Bottom Line
Right now, the smart position is this: go long on ITV for its optional breakup value, hedge against broader media weakness, and don’t fully price in the £1.6 billion just yet. The gap between ITV’s market price and its true value is wide enough to weather setbacks.
For ITV shareholders, this is the first real glimmer of strategic hope in years—someone finally wants to pay a premium for the weak half of the business in a bad market. For the rest of British television, it marks the start of a new era: grow big or go niche.
The obituary for traditional TV has been written. This deal just schedules the funeral.
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