ITV Says Sky Deal Talks Remain Active as Q1 Ad Revenue Slips and Studios Revenue Rises

ITV said on Thursday it remains in active discussions with Sky regarding a possible sale of its Media & Entertainment business, as the British broadcaster reported a 1.5 percent decline in total advertising revenue for the first quarter of 2026 while its studios division posted revenue growth.

The Details

In a first-quarter trading update released Thursday, ITV said group total external revenue rose 1 percent year over year, while group total revenue was flat compared with the same period a year earlier.

The company's studios division, ITV Studios, reported 4 percent total revenue growth and 8 percent external revenue growth for the quarter. The company attributed the studios performance in part to deliveries to streaming platforms including Netflix, Disney+, and Peacock.

By contrast, the Media & Entertainment segment saw revenue fall 2 percent in the first quarter. ITV said a 12 percent increase in digital revenue partly offset a decline in linear advertising. Total advertising revenue for the quarter declined 1.5 percent.

Within the digital segment, advertising revenue grew 14 percent, and streaming hours on ITVX rose 13 percent during the quarter, according to the company's update.

Chief Executive Carolyn McCall said in the update: "Our strategic priorities of expanding ITV Studios and supercharging our digital Media & Entertainment business continue to deliver clear and positive results."

McCall added: "While we are monitoring the ongoing difficult geopolitical environment, we are focused on what we can control and remain on track to deliver our full year guidance of good revenue growth in ITV Studios and strong profitable digital revenue growth in M&E."

ITV first announced in November 2025 that it was in discussions with Sky about a possible sale of the Media & Entertainment business. Thursday's update said those discussions remain active but gave no indication of timing or certainty that a transaction would be completed.

Context

The possible sale of ITV's Media & Entertainment business to Sky has been under discussion since late 2025. The unit encompasses ITV's broadcast channels, advertising operations, and streaming platform ITVX, while ITV Studios operates as a separate production and content sales division.

The quarterly results illustrate a continuing shift in ITV's revenue mix. While linear advertising, traditionally the core of the Media & Entertainment business, declined during the quarter, digital revenue and streaming metrics both grew by double digits. Studios revenue also outpaced the broader group, driven by external commissions and sales to global streamers.

ITV said it expects total advertising revenue in the second quarter to rise by around 10 percent, with July anticipated to be strong due to advertiser demand surrounding the Men's football World Cup.

What's Next

ITV said it remains on track to deliver its full-year guidance despite what it described as a difficult geopolitical environment. The company did not provide a timeline for the possible Sky transaction and cautioned that there is no certainty any deal will be completed.

The second-quarter advertising outlook, including the expected boost from World Cup-related demand in July, will offer a clearer indication of whether the Media & Entertainment segment can reverse its first-quarter revenue decline. Meanwhile, ITV Studios' pipeline of deliveries to streaming platforms will continue to be a key revenue driver for the group.