Sky has warned of potential job cuts and a £200m cost-saving drive following its £1.6bn acquisition of ITV’s media and entertainment arm.
The media giant did not specify how many roles would be affected, but indicated reductions in corporate and commercial divisions due to operational overlap.
Sky employs around 20,000 staff in the UK, while ITV’s media and entertainment division has approximately 2,400 workers.
This significant deal sees Sky acquire ITV’s terrestrial TV channels and its streaming service, ITVX. However, it explicitly excludes ITV Studios, the production arm responsible for hits like I’m A Celebrity and the acclaimed drama Mr Bates Vs The Post Office.
Sky group chief executive Dana Strong emphasised that job cuts are not the primary focus of the £200m annual savings, which are earmarked for achievement within three years. She noted that the bulk of these cost reductions would stem from technology, marketing, and overseas content.
Ms Strong said: “There is some duplication in roles in corporate functions and commercial functions as there is when you bring, inevitably, two organisations together.
“But it’s the minority of the synergy.”
The group said it was too soon to say how many jobs will be impacted.
The companies said the deal will create a major competitor to the global streaming giants.
They have been in talks since late last year in a bid to hammer out the terms of a sale, which is set to be transformative for UK television.
ITV Studios will become a “pure-play global content business” with its shares listed on the London Stock Exchange following the sale, and a long-term agreement to supply content to the newly combined Sky and ITV, according to the broadcaster.
This includes programmes popular with the British public such as Love Island, I’m A Celebrity, Coronation Street and Emmerdale.
Sky has committed to spending at least £2.1bn over 2028-2032 on the partnership.
Under the terms of the deal, Sky will pay £1.2bn for the broadcasting unit and sell its Love Productions business to ITV, which makes shows including the Great British Bake Off and The Piano, and is valued at £200m.
ITV may also receive a payment of up to £200m in two years’ time, subject to its advertising sales performance.
The firms said the combined business will have a bigger content budget and the resources and technology to better compete with global streaming platforms in the UK.
Dame Carolyn McCall, chief executive of ITV, said she cannot give “any guarantees” on jobs, but she said overlapping roles would be looked at across both Sky and ITV’s businesses.
She said the companies were “hopeful” the deal will get the approval of regulators, but said it will be a lengthy and “comprehensive” regulatory review she expects to last 12 to 18 months.
She said the deal comes as the market has “changed fundamentally”, with Sky and ITV now competing against the likes of YouTube, Amazon and Netflix.
Sky is owned by US media giant Comcast which is in the midst of plans to split into two companies, and will see Sky’s European business become part of NBCUniversal.
Ms Strong said: “Bringing Sky and ITV Media & Entertainment together combines the very best of free-to-air television, pay TV and streaming, ensuring viewers across the UK continue to enjoy outstanding British programming in a rapidly changing world.
“ITV will remain a public service broadcaster at the heart of British life, and we’re excited about the future we can build together.”
She said the takeover was a “defining moment for British media”.
Andrew Cosslett, the chair of ITV, said that “at a time of rapid change in the industry, it is right that we now secure ITV’s crucial role as a public service broadcaster” and that the combined business will “create a UK champion with the scale and resources to better compete with global streaming platforms”.
Sky will also become an indirect 20 per cent shareholder in the ITN business, which makes news programmes such as Good Morning Britain and News At Ten and regional news for London, with ITV retaining half of its current 20 per cent stake.
Dame Caroline Dinenage, MP and chair of the Culture, Media and Sport Committee, called for close regulatory scrutiny “to make sure the deal is in the best interests of audiences”.
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