Sky’s Acquisition Of ITV Could Shift How Disney+ Operates In The UK
After months of speculation, Comcast’s Sky has officially announced that it is going to purchase the British broadcaster, ITV, for for a total consideration of up to £1.6 billion (subject to adjustment for cash, debt and net working capital), comprising £1.2 billion in cash, Love Productions, and up to £0.2 billion in performance-related earn-out, subject to customary conditions and regulatory approvals.
This deal will bring together two of the UK’s most trusted, recognisable and complementary media organisations to create a stronger media business with the reach and capabilities to sustain investment in great British programming, strengthen trusted news and deliver more for audiences.
The reason for this deal is that the world of television continues to change, requiring scale to compete with global streaming platforms like Netflix and Disney+, along with YouTube in the UK. With the merger between Paramount and Warner Brothers, this will bring together Channel 5, HBO Max and Paramount. So Sky is making moves to increase its output, not just for the British audience, but also to benefit Peacock in the US.
This deal will bring together Sky and ITV Media & Entertainment, combining free-to-air broadcasting, advertising-funded streaming, and subscription television with Sky’s wider portfolio of broadband, mobile, and business services. The diversity of revenue streams of the combined entity provides a resilient and durable business model which will underpin its long-term success.
Following completion of the deal, ITV channels and ITVX will remain free-to-air, with its public service broadcasting commitments continuing to be met in full. Audiences will continue to enjoy the programmes they know and love, alongside trusted national and regional news. Sky will continue to be the home of world-class entertainment, unmissable sport, and market-leading connectivity.
Dana Strong (CBE), Sky Group CEO, said in a statement regarding the new deal between Sky and ITV:
“This is a defining moment for British media and an opportunity to build a stronger future for two of the UK’s most loved and trusted brands. We have huge respect for the transformation the ITV team has delivered, particularly its successful move into streaming through ITVX, which has brought fantastic British content to millions of viewers across the UK. Bringing Sky and ITV Media & Entertainment together combines the very best of free-to-air television, pay TV and streaming, ensuring viewers across the UK continue to enjoy outstanding British programming in a rapidly changing world. ITV will remain a public service broadcaster at the heart of British life, and we’re excited about the future we can build together.”
Carolyn McCall (DBE), Chief Executive Officer, ITV plc, added:
“ITV has successfully evolved in a rapidly changing media landscape – launching, and scaling, ITVX and developing ITV Studios into a major force in the global content market. This transaction builds on that momentum to deliver clear, tangible value for shareholders. At the same time, through the commitments made by Sky, the combined ITV M&E / Sky business will continue to deliver everything about ITV that our viewers and advertisers love and value and our people are hugely proud of – making programmes that reflect and shape society, bringing people together for shared experiences and having the quality, diversity and plurality that are the hallmarks of our contribution to the UK’s creative industries.
In addition, all of ITV’s PSB commitments, including regional and national news, are safeguarded under the terms of the Channel 3 Licences until 2034, which Sky is acquiring as part of the Transaction. I am also confident that Sky will be a strong and responsible custodian of ITV M&E, building on its heritage while investing in its future and safeguarding the qualities that make ITV so valued by viewers, advertisers and the UK’s creative industries.”
Last year, Disney announced it was teaming up with ITV for a first-of-its-kind initiative to carry each other’s streaming services, in the form of a promotional selection, billed as a ‘Taste of ITVX’ and a ‘Taste of Disney+’. This deal brought ITV shows onto Disney+ in the UK, and Disney made shows like “Ms Marvel” and “The Book Of Boba Fett” available on ITVX for a limited time. Some Disney+ Originals, such as “Stolen Girl”, also aired on the ITV linear channel.
While we probably won’t be seeing any changes to the deal between Disney+ and ITV until the contract expires, but I suspect that once that happens, we won’t see Disney+ and ITV working together to promote each other, as Sky will want to promote its own “NOW/Sky” services instead.
It’ll be interesting to see if this deal between Sky and ITV goes through, as with both this merger and the Paramount/Warner one underway, the UK’s biggest independent linear channels and free-to-air streaming platforms will be owned by major US corporations. Leaving just the publicly funded BBC and Channel 4 left, both of which are potentially on borrowed time as audiences shift to streaming.
This deal with Sky might not result in any major changes for the next few years, but eventually, Sky and ITV are likely going to become much more interconnected, resulting in more competition for Disney+ in the UK, which should, in theory, see Disney invest in more original content to compete for British eyeballs!
Disney has also teamed up with ITV Studios to create original shows like “Rivals” and “The Stolen Girl”, which also shouldn’t be impacted by the new deal, since ITV Studios will remain a separate production company, not owned by Comcast.
Could we see Disney team up with the BBC or Channel 4 for new partnership deals? Disney’s deal with the BBC for “Doctor Who” hasn’t been a success, but maybe they could team up for another licensing deal to expand their reach.
What do you think of this new deal between Sky and ITV? Let me know on social media!
