ITV has confirmed it is in talks with Sky over the sale of its broadcasting arm to the company.

Responding to press speculation on the matter, ITV said it is in “preliminary discussions” with Sky parent company Comcast to sell its media and entertainment division for an enterprise value of £1.6bn. The media and entertainment arm consists of ITV’s linear channels, as well as its streaming service ITVX.

However, the deal would not involve ITV’s production arm, ITV Studios, which has produced shows including Love Island, Mr Bates Vs the Post Office and Rivals. ITV Studios produces programmes for other platforms as well as ITV, and has been the subject of previous speculation around takeover bids.

A sale of ITV’s broadcast and streaming channels to Sky would bring together two of the UK’s biggest TV advertising platforms under one roof. ITV has reported it holds around a third of the UK’s commercial TV viewing, and while Sky does not share a figure for this, it’s likely it also holds a significant proportion of the market.

Writing on LinkedIn, media analyst Ian Whittaker said “the combined entity would have c.70%+ share of the UK TV ad market”, giving Comcast a dominant position in the market.

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It’s likely any deal would come under significant scrutiny from the Competition and Markets Authority (CMA). However, the media landscape has evolved significantly, with online advertising now projected to make up 80% of the UK’s ad market by 2026, according to AA/Warc data. That means internet giants such as Meta and Google dominate the UK advertising sector in a way that commercial broadcasters no longer can.

The discussions around a deal come at a challenging time for ITV. In its third quarter trading update yesterday (6 November) the broadcaster warned it expects its total advertising revenue to decline by around 9% in the final quarter of the year. This projected decline is steeper than what is predicted in the broader UK TV advertising market, which is forecast to decline by 5% in the final quarter of 2025, according to AA/Warc data.

While the final quarter of the year is the biggest for advertising platforms as brands spend ahead of Christmas, ITV warned that it is seeing “widespread caution being exercised across business sectors” in an uncertain economic environment. Its total advertising revenue is down by 5% in its year to date.

By contrast, ITV reported that on ITV Studios it is “on track to deliver good revenue growth in ITV Studios at a margin of 13-15%”.

Any sale of ITV to Comcast would be the biggest in the UK television landscape since the latter bought Rupert Murdoch’s Sky for £30bn in 2018.