ITV For Sale: Behind The Headlines Of A Deal That Everyone And No One Is Talking About
Jake Kanter and Max Goldbart
8 min read
If you’ve watched ITV’s The Assembly, you will know that it involves stars like Danny Dyer and David Tennant subjecting themselves to no-holds-barred questions from a captivating cast of neurodivergent interrogators. It makes for illuminating viewing, producing genuine revelations from its disarmed but obliging subjects, who enter the show in a spirit of openness.
Far from the cameras, in a colorless room in the basement of London’s 11 Cavendish Square townhouse on Tuesday, ITV chairman Andrew Cosslett was similarly squirming in the face of questioning, with less comical results. Chairing ITV’s Annual General Meeting (AGM), Cosslett was grilled, almost heckled, by an angry shareholder demanding to know when the British broadcaster’s 78p share price will rise after flatlining for more than three years.
“This is not good enough, you must have some idea, you guys are very highly paid,” said the shareholder. Cosslett struggled to answer, reaching for what by now feels like an old fail-safe. “If you can explain to me what Donald Trump will do next, then maybe I could,” he said.
Questions around ITV’s sticky share price — Cosslett and ITV boss Carolyn McCall faced three during the 45-minute AGM alone — are inextricably linked to the constant mutterings around its potential sale. On this matter, ITV has been a little less forthcoming with answers than the celeb bookings on The Assembly. The company that gave the world Downton Abbey has been finding new ways to say “no comment” to inquiries about whether it will submit to suitors, including RedBird IMI and Banijay.
Cosslett did, however, reveal a little more at the AGM, first noting that “the board has an obligation to review offers,” before positing: “If someone approaches with an offer we have to take interest and it’s very clear from the room that there are lots of people interested in getting the share price up.”
This week has been a high watermark for sale speculation. Twenty-six miles west of the AGM, ITV Studios’ unscripted producers were gathering for their annual “creative exchange” in Windsor. The meeting has long been in the diary, and although the sale was not officially on the agenda, it was certainly on the lips of those in attendance, some of whom expressed anxiety about a buyer smashing production labels together. “People are scared sh**less — a lot of people will be losing their jobs,” said one producer.
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ITV matters, hence the steady drip of press reports and speculation. “ITV creates more rumors than dramas,” joked one insider. The £3B ($4B) behemoth is a British cultural icon, which entertains the nation with Coronation Street and Britain’s Got Talent. The company is also a world-straddling production titan, with ITV Studios boasting shows from Love Island to Rivals, and a great deal in between. Were the listed company to come under new ownership, or if it were to flog ITV Studios, it would profoundly reshape the British TV sector and reorder the global production power list.
Flanked by its banking advisors at Goldman Sachs, Morgan Stanley, and Robey Warshaw, ITV has reportedly been entertaining potential suitors since at least last November. RedBird IMI, run by former CNN chief Jeff Zucker, emerged as the frontrunner to a deal after the Abu Dhabi-backed investment fund acquired All3Media last year. The rumor mill continued to turn last month when The Financial Times reported that French media giant Banijay had held early-stage talks with ITV. The configuration of any deal is opaque, but what is clear is that ITV Studios is the prize for a buyer with production ambition.
RedBird IMI’s Interest Cools
Four sources with knowledge of the talks told Deadline that RedBird IMI’s interest has cooled significantly in recent weeks, though the situation remains fluid and could change again quickly. These people said RedBird IMI believes ITV Studios’ valuation is too high. Ironically, ITV is said to be citing the £1.15B price RedBird IMI paid for All3Media — around 10 times All3Media’s profit that year — as a benchmark for the valuation it is hoping to achieve, though Zucker has previously played down suggestions he overpaid for The Traitors production group. It would put a circa-£3B valuation on ITV Studios, which generated record profits of £300M last year. “Valuation is always vexed,” someone drily noted.
One source said RedBird IMI has reservations about ITV wanting ITV Studios’ management team to remain in place post-deal, which has proved a sticking point. Any agreement could see ITV Studios boss Julian Bellamy and All3Media chief Jane Turton vying for the top job, for example. Turton, linked with the soon-to-be vacant Channel 4 CEO role, is said to have frustrations that RedBird IMI has not yet fully unleashed All3Media on the M&A market after it has missed out on targets, such as See-Saw Films. RedBird IMI and All3Media declined to comment.
Banijay’s talks are said to be tentative. The French production empire behind Big Brother and Peaky Blinders has the appetite for big buys following its €2B ($2.2B) acquisition of Endemol Shine in 2020 and its serious interest in All3Media more recently. Some think ITV Studios might be too big a bite for a company with a net debt pile of €2.6B. The FT reported that Banijay could look to involve other investors if it attempted to acquire all of ITV.
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“Banijay is over-leveraged,” said one senior source from the M&A sector. “They raised money when they bought Endemol but I don’t think there are billions of pounds around at the moment to chase down media production content assets. The market is in trouble.” The potential to unlock savings by combining the companies is obvious, this source added, but they questioned whether ITV Studios has a “game-changing” asset amongst its labels and sales arm to catapult Banijay to the next level. Banijay declined to comment.
Sources point out that talks with RedBird IMI or Banijay have not matured to the point where ITV has needed to alert the market to a potential deal. Regulatory rules in the UK required the FTSE 250 company to tell shareholders in June 2023 that it was “actively exploring” acquiring All3Media. Watching from the sidelines is Liberty Global, ITV’s biggest shareholder with a 9.9% stake, which has long been a cheerleader for a sale.
Shape Of A Deal
Selling ITV Studios could be a simpler transaction, but where this would leave an ad revenue-dependent TV network business is unclear. The so-called Media & Entertainment division boasts sales of £2.1B, of which around a quarter is generated online, including via streaming service ITVX. It is a depreciating asset, but ITV has just been awarded a new license, meaning it is committed to broadcasting public service content for another decade.
A full sale would likely attract the interest of UK regulators and lawmakers. This could be particularly thorny for Abu Dhabi-backed RedBird IMI, which has been told it cannot own The Daily Telegraph, let alone a public service broadcaster with guaranteed platform prominence and an audience of millions. Lord Grade, chairman of Ofcom, gestured to this when asked by lawmakers if the media regulator has any concerns about RedBird IMI’s interest in ITV. He said this month that RedBird IMI is a “peculiar” prospect because of its links to the United Arab Emirates government.
An industry source told us RedBird IMI has “never expressed any interest in the broadcast arm,” meaning the foreign ownership questions are not an issue. RedBird IMI’s acquisition of All3Media was waived through without so much as an eyebrow being raised by the government.
Grade also pointed out that foreign ownership of public service broadcasters is not off the table, given Paramount controls Channel 5. Banijay may be a more palatable option in this respect, with one person suggesting that the French producer could use the ITV network as a testing ground for new shows, akin to the way John de Mol has done at Talpa.
There are other options. Some think ITV should explore a joint venture for ITV Studios, allowing it to secure investment and scale while maintaining some control. ITV CEO McCall, who has been in the job for more than seven years, has continued to bolster the production arm, recently sanctioning deals for The Gentlemen co-producer Moonage Pictures and Hartswood Films, the company behind Sherlock. Those close to her say she is unwilling to “stand on touchlines” as consolidation goes on around ITV in a market where it is competing with Netflix, YouTube, and Meta for eyeballs and revenue.
What can be said with certainty is that any deal will be complicated. Thomas Dey, a seasoned media industry M&A broker at investment bank ACF, summed it up like this: “Achieving the transaction will be hard. I think you’ve got to be quite special and get quite a lot of support.”
For now, ITV’s future feels like the subject that everyone and no one is talking about.
