Sky–ITV Deal Review Advances With Government Notice; Decision Delayed Until January
Key Facts
On November 4, the UK secretary of state issued a public-interest intervention notice concerning Sky’s proposed acquisition of ITV’s media and entertainment business, bringing the £1.6 billion deal into a government review process. The Competition and Markets Authority said the notice requires it and Ofcom to prepare reports for the secretary. But the authority said it has not yet launched a formal investigation into the transaction. The move puts considerations related to freedom of expression, plurality of views and the diversity of ownership of media enterprises at the heart of the review. ITV’s anticipated trading update, meanwhile, was scheduled for the following Wednesday, according to a report published on November 8, which did not include the update’s results.
The considerations cited by the Competition and Markets Authority include the need to safeguard freedom of expression in news media, ensure plurality of views, and maintain a diversity of ownership among media enterprises that provide services to the public. The secretary referred the deal to this process through the public-interest notice issued on November 4, while the authority and Ofcom are responsible for preparing the required reports. The authority did not list editorial independence among the considerations specified on the case page. Sky said the deal would create a stronger British media company and that it had offered commitments to protect ITV’s identity, its public-service broadcasting obligations and the distinctive editorial voices of Sky News and ITV News. The regulatory process places those commitments alongside questions of plurality and freedom of expression before the secretary receives the reports.
The proposed deal is limited to ITV’s terrestrial channels and ITVX service, excluding ITV Studios. The announced consideration is about £1.6 billion, comprising an initial cash payment of £1.2 billion, a contribution from Sky in the form of Love Productions, valued by agreement at £200 million, and additional contingent cash consideration of up to £200 million. The contingent consideration is linked to gross advertising revenue in financial year 2027; under the agreement, £2 is payable for each £1 by which revenue exceeds the £1.7 billion threshold. If due, the consideration is expected to be paid in the second half of 2028. These terms tie part of the deal’s value to advertising performance after completion, while government approval remains a step before the business can transfer to Sky.
On operating performance, ITV News said on November 8 that the company would announce a trading update the following Wednesday. The published report did not confirm that advertising revenue fell 8% in the third quarter, nor did it establish that the decline exceeded the company’s previous forecast. In July, ITV had forecast that gross advertising revenue would fall about 5% year on year in the third quarter, citing economic headwinds. In the three months before that forecast, the World Cup had helped lift advertising revenue 3%. In its first-half results, gross advertising revenue rose 3% to £850 million, compared with £824 million in the corresponding period, according to the company’s announcement on the London Stock Exchange. The actual third-quarter result therefore remained undisclosed in the report about the timing of the update.
The first-half results offered a broader picture of the company’s performance ahead of the third-quarter update: pretax profit rose 16% to £78 million, and group revenue increased 2% to £1.89 billion. Digital advertising revenue also climbed 13% to £268 million. Viewing hours rose to 1,418 million from 1,119 million in the corresponding period a year earlier, an increase of 27%. The figures reflect growth in digital and overall activity in the first half, alongside ITV’s July forecast of a decline in gross advertising revenue in the third quarter. The Competition and Markets Authority and Ofcom reports are the next announced step in the deal review, due to be submitted to the secretary of state by 5 p.m. on January 27, 2027.
The government said the culture secretary would introduce legislation to amend the law so that the public-interest consideration concerning the availability of a wide range of high-quality programmes also applies to on-demand programming. Culture Secretary Lisa Nandy said she would bring forward new legislation for online broadcasting in light of what she described as her specific concerns about the deal. This comes alongside preparation of the regulatory reports, while the Competition and Markets Authority has yet to launch its formal investigation. The announced timetable sets 5 p.m. on January 27, 2027, as the deadline for the authority and Ofcom to submit their reports. After that stage, the terms of the contingent consideration will remain tied to gross advertising revenue in financial year 2027, with payment expected in the second half of 2028 if it becomes payable.