ITV has confirmed it is in preliminary discussions with Sky for the sale of its Media and Entertainment business.
It followed late night media reports led by Bloomberg.
The bid values the business at £1.6 billion and would separate the broadcasting and studios businesses.
“ITV plc notes the recent press speculation and confirms that it is in preliminary discussions regarding a possible sale of its M&E business to Sky for an enterprise value of £1.6bn,” the broadcaster said in a statement.
“There can be no certainty as to the terms upon which any potential sale may be agreed or whether any transaction will take place. A further announcement will be made in due course if appropriate.”
Sky is owned by Comcast, the US media giant also behind NBCUniversal, and which is spinning off its own channels business into a separate company.
In recent months there had been speculation that ITV Studios might be the division to be sold. It has slowly bought out a number of smaller companies including Hartswood Films (Sherlock, Douglas is Cancelled) and Eagle Eye Drama & Happy Duck (Professor T, Before we Die) to create a powerhouse in UK production.
Instead it is the 70 year-old regional broadcasting business that alongside streaming service ITVX could combine with Sky’s satellite and streaming platforms, subject to the usual regulatory approvals.
Giao Pacey, Partner and corporate lawyer at media and entertainment law firm Simkins said the sale could mark a turning point in British television. “It’s not just a divestment, it’s a sign that UK broadcasters are rethinking how they operate in a fast-moving media landscape. By offloading its traditional TV channels and streaming service ITVX, ITV is aiming to reduce its reliance on advertising, which can be unpredictable, and instead focus on producing content it can sell globally.”
In financial results released Thursday, ITV said it would temporarily reduce budgets by £35 million ahead of the Budget due later this month.
It is facing a reduction in advertising budgets of 9% in the crucial pre-Christmas advertising period.
