It’s finally official. Comcast-owned U.K. pay-TV operator Sky has agreed to accumulate ITV‘s Media and Entertainment business for total consideration of as much as £1.6 billion ($2.14 billion).
The deal, expected to shut within the second half of 2027, will separate ITV Studios right into a standalone global content business and return roughly £950 million ($1.27 billion) to shareholders.
The consideration comprises £1.2 billion ($1.61 billion) in money at completion, the contribution of Sky’s Love Productions – maker of “The Great British Bake Off” and “The Piano” – valued at £200 million ($268 million), and as much as £200 million ($268 million) in contingent payments payable within the second half of 2028, tied to promoting revenue performance in fiscal 2027. Sky is fully owned by Comcast, and each Sky and ITV’s M&E business are expected to change into a part of NBCUniversal once Comcast’s planned separation is complete.
Net money proceeds from the sale are projected at roughly £1.05 billion ($1.4 billion) after roughly £185 million ($247 million) in transaction and separation costs. ITV plans to make use of the proceeds first to cut back ITV Studios’ leverage to around 1.5 times net debt to EBITDA, then return about £950 million ($1.27 billion) to shareholders, corresponding to 25p per share, excluding any contingent consideration.
As a part of the transaction, ITV Studios will sign a long-term content supply agreement with ITV M&E and Sky covering shows including “Coronation Street,” “Emmerdale,” “Love Island,” “I’m a Celebrity…Get Me Out of Here!” and its daytime slate, with a guaranteed minimum spend totaling £2.1 billion ($2.81 billion) between 2028 and 2032.
Andrew Cosslett, chair of ITV plc, said: “For over seven many years, ITV has played a vital and cherished role in the general public lifetime of the nation. At a time of rapid change within the industry, it is true 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 size and resources to raised compete with global streaming platforms.”
Carolyn McCall, chief executive officer of ITV plc, added: “I’m confident that Sky will probably be a robust and responsible custodian of ITV M&E, constructing on its heritage while investing in its future and safeguarding the qualities that make ITV so valued by viewers, advertisers and the U.K.’s creative industries.”
McCall framed the transaction as a continuation of ITV’s move into streaming through ITVX and its growth into a significant global content producer. All of ITV’s public service broadcasting commitments, including nations, regional and national news, remain protected under the Channel 3 licenses that Sky is acquiring, which run until 2034.
Dana Strong, group chief executive officer of Sky, said: “It is a defining moment for British media and a possibility to construct a stronger future for 2 of the U.K.’s most loved and trusted brands.”
Strong said the deal reflects respect for ITV’s push into streaming through ITVX and unites the several ways British audiences watch television under one roof.
“Bringing Sky and ITV Media & Entertainment together combines the perfect of free-to-air television, pay-TV and streaming, ensuring viewers across the U.K. proceed to enjoy outstanding British programming in a rapidly changing world. ITV will remain a public service broadcaster at the center of British life, and we’re excited concerning the future we are able to construct together,” Strong said.
The transaction values ITV M&E at an EV/EBITDA multiple of roughly 5.6 to six.4 times 2025 earnings, in step with recent precedent deals, in response to ITV. Post-completion, ITV Studios is predicted to operate with adjusted EBITA margins of 13 to fifteen% and average profit-to-cash conversion of roughly 80%, and the corporate plans to carry a Capital Markets Day before the deal closes to detail its standalone strategy. The transaction requires regulatory approval and is just not subject to shareholder approval under U.K. Listing Rules.