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The proposed £1.6bn takeover of a big chunk of ITV by Sky would be the biggest consolidation in British broadcasting in more than 20 years, and reflects fundamental changes in viewing habits and commercial realities.
For Sky, a deal that brings together Ant and Dec with Gary Neville and Jamie Carragher would make it the UK’s largest commercial broadcaster, and strengthen its hand in the battle with US streaming giants that have upended the entertainment business.
For ITV’s shareholders, who have seen the value of their investment decline as advertising revenue, like viewers, has migrated online, it may be a chance to say, “I own a terrestrial broadcaster, get me out of here.”
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Neither Sky or ITV would publicly discuss who made the initial offer, and both stress that talks are at an early stage, but privately, both sides emphasise the mutual opportunity.
For Sky, owned by US giant Comcast since 2018, there is the opportunity to create a larger pool of content and subscribers.
The deal would see it acquire ITV’s media and entertainment business, including its free-to-air channels and public sector broadcaster (PSB) licence, which runs to 2034, as well as the ITVX streaming platform, which has 40 million registered users.
The ITV brand is likely to be retained, and the two companies run separately, but Sky would look to leverage its commercial and technology strengths.
ITV’s PSB licence includes the requirement that ITV’s app be “available, prominent and easily accessible” on online platforms, a crucial shop window as viewers access content directly.
Added to Sky’s existing 13 million subscribers for largely pay-walled content in the UK, it would add muscle as the broadcaster competes for attention, subscription revenue and advertiser spend.
The…
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