Sky and ITV Executives Defend $2.1 Billion Acquisition

Comcast-owned Sky's $2.1 billion acquisition of ITV is still winding through the U.K. regulatory process, but the deal's two most senior champions used the Royal Television Society convention in London to make their case — and calm some nerves along the way.

Sky's content chief Cecile Frot-Coutaz and ITV CEO Carolyn McCall delivered separate keynote speeches at the convention. Regulatory constraints limit how much either party can say publicly, yet both managed to sketch out what the deal means for the U.K. broadcasting sector, from content investment to the future of news.

A deal that would not have happened six years ago

Both executives acknowledged that the television business has shifted immeasurably over the past decade. McCall said the acquisition "wouldn't have gone through" even six years ago, when the Competition and Markets Authority took a much more bullish approach to consolidation.

"The transaction is very much a response to what's happened in the marketplace," Frot-Coutaz said. She added that Sky is not acquiring ITV simply to create a "robust" media company: "we think there's a lot of opportunity in it as well."

McCall put hard numbers behind the argument. Five years ago, she said, audiences had 200,000 hours of streaming content available to them. That figure has now more than doubled to 900,000 hours — and it does not include YouTube. "That's what we're up against," the ITV boss said.

Content commitments

Frot-Coutaz and McCall both said Sky remains committed to ITV content, not least because the deal terms include a content supply agreement with ITV Studios.

"One of the most important things to Sky was our content," McCall said, in an attempt to allay fears among independent producers that cost savings will mean less money going into programming. "There'll be more content because the sum of the two."

Frot-Coutaz agreed in her keynote: "The goal ultimately is to maintain the scale of the content offering."

Technology and scale

"The competition is ferocious," McCall said. "It's not just [being] bigger; it's also the investment. So you have to invest in technology. You've got to continue to invest in AI. You've got to continue to invest in efficiency, and most importantly, you've got to have to enough money to constantly invest in content, because content is where it's at. That's what makes you all your money."

Frot-Coutaz echoed the point. "Content is super important, but you also need the technology that goes with it," she said.

Technology costs money, and money requires scale. That equation, in the executives' telling, is the logic of the deal.

The news question

A key concern hanging over the acquisition is whether Sky will seek to consolidate its newsroom with ITV's. ITV's public service broadcasting commitments — covering nations, regional and national news — are protected until 2034. What happens after that date remains a large question mark.

McCall defended the status quo. ITN, which produces ITV's news under a shared-ownership scheme comprising four stakeholders, one of which is ITV, is a "strong news organization," she said, asking: "why would you duplicate?"

Frot-Coutaz maintained that Sky has made a "very public commitment to maintain Sky News and to maintain ITN news," but she refused to say whether that commitment would extend past 2034, when ITV's public service broadcast license expires.

Whether those assurances will satisfy regulators and independent producers remains to be seen — a question that will follow the deal through its regulatory review and beyond.