ITV Reports Deeper-Than-Expected Ad Revenue Fall as Sky's £1.6bn Takeover Faces Government Investigation
ITV plc, the FTSE 250 broadcaster, reported on 11 November 2026 that advertising revenue fell eight per cent in the third quarter of 2026, worse than its own previous guidance of a five per cent decline. Chief executive Dame Carolyn McCall cited economic uncertainty, competition from global streaming platforms, and restrictions on advertising for less healthy foods as the drivers. ITV now expects full-year advertising revenue to decline between two and three per cent, with a further decline of between five and ten per cent anticipated in the fourth quarter. In response, the company announced £30m in additional cost savings: £25m from reduced fourth-quarter programming spend and £5m from discretionary cuts. Group revenue slipped one per cent to £2.76bn in the nine months to September, with external revenue falling two per cent to £2.36bn. ITV's media and entertainment division, the part set to be acquired by Sky, recorded a one per cent revenue decline to £1.43bn, while ITV Studios, which is to remain independently listed after the deal closes, reported a one per cent decline to £1.33bn but is said to be on track for full-year growth. The trading update arrives a week after Culture Secretary Lisa Nandy ordered regulators to investigate Sky's proposed £1.6bn acquisition of ITV's broadcasting and streaming operations over concerns about media plurality and editorial independence. Sky is owned by Comcast Corporation.
Why this matters
The deepening advertising slump materially weakens ITV's earnings trajectory at precisely the moment when the government has intervened to scrutinise the Sky deal on public interest grounds. A widening gap between deal price and underlying performance introduces valuation risk and could affect the terms on which the transaction ultimately completes, if it completes at all. The government's media plurality investigation is a distinct and potentially lengthier process from standard competition review, and its outcome is not guaranteed. For investors in ITV's remaining listed entity, ITV Studios, the trajectory matters independently of the deal.
On the Ground
The government intervention triggers public interest media plurality review, which runs alongside any competition assessment and involves the CMA, Ofcom, and ultimately the Secretary of State. This generates regulatory advice work covering media ownership rules, editorial independence assessments, and the conditions under which a public interest intervention can proceed or be remedied. M&A practices will be advising on deal conditionality and timetable risk. Capital markets practices advising on ITV's continuing listed entity will be monitoring disclosure obligations given the material trading update. A trainee would assist with drafting regulatory notification memos, preparing PDMR (persons discharging managerial responsibilities) notification letters following the trading update, and maintaining a conditions precedent tracker.
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