Comcast Eyes ITV Broadcasting Business in £2bn Deal Talks

crypto market The parent company of Sky, Comcast, is currently in discussions regarding the acquisition of ITV's broadcasting operations, reportedly valued at around £2 billion. This development comes two decades after James Murdoch made headlines by becoming the largest shareholder in the UK’s leading commercial free-to-air broadcaster.

Comcast, a major US media conglomerate, owns various assets including Universal Studios and acquired Sky from Rupert Murdoch for £30 billion in 2018. The potential purchase of ITV would include its television channels and its streaming service, ITVX, and is poised to significantly alter the UK broadcasting landscape.

This move also rekindles the ambitions of Rupert Murdoch's youngest son, James, who back in 2006 purchased a 17.9% stake in ITV for £940 million. However, it’s crucial to note that this deal would not encompass ITV Studios, the production entity behind popular shows like Love Island, I’m a Celebrity, and the acclaimed drama Mr Bates vs The Post Office. ITV Studios has been at the center of separate acquisition discussions.

Sky originally acquired the ITV stake to thwart Richard Branson’s attempts to purchase ITV after the merger of cable companies NTL and Telewest led to the formation of Virgin Media. However, regulatory pressures eventually forced Sky to divest its holdings. Recently, ITV's largest single shareholder, Liberty Global, reduced its stake in the broadcaster by half, from 10% to 5%.

ITV's market value has plummeted to £2.5 billion, reflecting a 75% decline from its value a decade ago, largely attributed to the competitive pressures exerted by the streaming revolution spearheaded by Netflix. On Thursday, the broadcaster announced plans to implement a temporary budget cut of £35 million in response to a challenging macroeconomic environment and uncertainties surrounding advertising in advance of the upcoming budget announcement.

ITV has indicated that it anticipates a 9% decrease in advertising revenues during the crucial fourth-quarter advertising period leading up to Christmas, which remains a significant source of its income. The company has engaged financial advisors Robey Warshaw and Morgan Stanley to assist in navigating these challenges.

Analysts have suggested that ITV Studios alone may hold a higher valuation than the broadcasting division, despite the latter's ownership of some of the UK’s most beloved channels. Since its acquisition of Sky, Comcast has faced difficulties, leading to billions of dollars in write-downs, primarily due to underperformance in its European operations in Italy and Germany.

In contrast, Sky UK continues to thrive, maintaining control over valuable assets, including the majority of Premier League broadcasting rights, and remains highly profitable. Just this past June, Comcast took steps to streamline its portfolio by selling its German pay-TV business to RTL, the former owner of Channel 5 in the UK, for €150 million.

As negotiations between Comcast and ITV progress, the potential acquisition could redefine the UK media landscape once again. Both ITV and Comcast have chosen not to comment on the ongoing discussions, leaving the industry and shareholders in anticipation of what this deal could mean for the future of broadcasting in the UK.