Comcast's Sky $2.2 Billion ITV Deal Talks Slow Down: Sources

• Negotiations have stalled partly due to time-consuming complications in separating ITV's Media and Entertainment unit from its Studios operation, making it difficult to value the broadcast assets
• Comcast is weighing how potential acquisitions of Warner Bros by Netflix or Paramount Skydance may reshape the competitive landscape before committing to the ITV deal
• The weak UK economic outlook and declining value of traditional broadcast assets are weighing on talks, though Comcast continues investing in the UK market with plans for its first European theme park near London

Summary: Comcast's Sky-ITV Deal Talks Slow Amid Industry Uncertainty

Negotiations between Comcast-owned Sky and British broadcaster ITV over a £1.6 billion ($2.18 billion) acquisition have decelerated in recent weeks, according to sources familiar with the matter. The proposed deal would see Sky purchase ITV's Media and Entertainment unit, including its broadcast channels and ITVX streaming platform.

Key Developments:

• Talks have slowed due to reduced engagement from Comcast's Philadelphia headquarters
• The transaction aims to create a top-three UK streaming competitor against Netflix, Amazon Prime Video, Disney+, and YouTube
• Negotiations have not completely halted, and a deal remains possible

Complications:

• Separating ITV's Media and Entertainment unit from ITV Studios is proving time-consuming, complicating valuation efforts
• Content arrangements and overhead allocation issues are causing delays
• Comcast ($117 billion market cap) is monitoring how potential Warner Bros. Discovery takeovers by Netflix or Paramount Skydance could reshape the media landscape
• The UK's weak economic outlook (minimal Q4 growth) and negative investor sentiment toward traditional broadcast assets are additional concerns

Strategic Context:

Comcast previously bid for Warner Bros. in 2024 but withdrew in December. The company's recent spin-off of cable assets into Versant, which has declined nearly 40% since January, has also influenced deliberations. Despite headwinds, Comcast remains committed to UK investment, including plans for its first European theme park near London.

ITV maintains advantages as a public service broadcaster, including rights to bid on protected sporting events and guaranteed device prominence. The upcoming Soccer World Cup could provide significant advertising revenue upside.