ITV says Studios revenue up as talks continue for TV unit sale to Sky

ITV PLC on Thursday said it remains in ‘active’ talks for a possible sale of its Media & Entertainment to Comcast Corp-owned Sky, as it reported ‘good momentum’ in the first quarter.

The London-based television broadcaster and content producer said total revenue edged up 0.2% to £877 million in the first quarter from £875 million a year prior, while external revenue grew 1.3% to £766 million from £756 million.

‘Our strategic priorities of expanding ITV Studios and supercharging our digital Media & Entertainment business continue to deliver clear and positive results,’ Chief Executive Carolyn McCall said.

ITV Studios reported 3.6% revenue growth to £400 million from £386 million, while Media & Entertainment revenue fell 2.5% to £477 million from £489 million.

Within the M&E business, digital revenue was up 12% to £149 million from £133 million, but linear advertising revenue sank.

Total advertising revenue for ITV was down 1.7% at £416 million from £423 million.

ITV said it remains in active discussions with Sky regarding a possible sale of the M&E business. ‘We will update the market in due course,’ it said.

In November, it confirmed it was in the early stages of talks to sell the division to Sky, in a deal worth £1.6 billion.

ITV’s M&E arm includes the ITVX streaming service and its television channels.

ITV’s November announcement followed a Financial Times report which stated that Comcast was in talks to buy the unit. Philadelphia-based Comcast sees the potential to combine ITV’s TV business with Sky, which the US group bought in 2018, to create a leading streaming service in the UK, FT sources said.

Looking ahead, ITV said it is on track for the full year and left its guidance unchanged.

The firm expects ‘good’ revenue growth for ITV Studios over the full year, with a margin at the lower end of the 13% to 15% range. It added that revenue, margin and profit will be weighted to the second half.

For M&E, ITV expects ‘strong profitable digital revenue growth’.

For the second quarter, ITV guides for total advertising revenue to be up around 10%, and 4% higher in the first half. The company expects a ‘strong July’, boosted by the men’s football World Cup.

Shares in ITV were up 2.4% at 79.57 pence on Thursday morning in London.

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