Media

UK: Sky Announces Takeover of ITV's Media and Entertainment Division

Is this deal good for viewers or does it raise monopoly concerns?

Published JUL 6

UK: Sky Announces Takeover of ITV's Media and Entertainment Division

Story

Above: A pedestrian passes ITV headquarters and television studios in London, U.K., on Feb. 9, 2017. Image credit: Chris Ratcliffe/Bloomberg/Getty Images

The Facts

Sky Group, which is owned by Comcast Corporation, announced a takeover of ITV's media and entertainment division for £1.6 billion ($2.13 billion) on Monday.
Sky Group
Reuters
The deal, which is still subject to regulatory approvals, will include £1.2 billion ($1.6 billion) in cash, £200 million ($266.9 million) in performance-related payouts, as well as a handover of Love Productions to ITV.
Sky Group
Reuters
It was cast as an effort to better compete with the world's premier streaming services. "The UK media market is undergoing a profound and rapid transformation, and as competition for audiences intensifies, scale matters more than ever in order to compete with global streaming giants and YouTube," Sky said in a statement.
Sky Group
"The diversity of revenue streams of the combined entity provides a resilient and durable business model which will underpin its long-term success," the statement added.
Sky Group
Sky, which is a subscription-based service, further said that ITV will remain free and that its public service broadcasting commitments would continue to be met in full.
Sky Group

Sources Split

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The Spin

Pro-establishment narrative

This is a defining moment for British media and an opportunity to build a stronger future for two of the U.K.'s most loved and trusted brands. Bringing them together will ensure viewers across the U.K. continue to enjoy outstanding British programming in a rapidly changing world.

Sky Group

Establishment-critical narrative

If this deal goes through, it would mean that roughly 70% of the U.K.'s television advertising market will be controlled by the joint entity. This raises serious anti-competition issues as it will be able to impose greater leverage over agencies, rights holders and distribution firms.