ITV chief says Sky deal and industry upheaval make broadcaster role her toughest

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ITV Sky deal and challenges

Highlights

Sky will acquire ITV's broadcast division, ITVX, and ITN stake, leaving ITV Studios; the two-phase competition review may take a year.
ITV advertising revenue fell 5 percent; YouTube and Netflix viewing rose to 15 and 9 percent respectively, while ITV's share dropped to 11 percent.
ITV shares remain 20 percent below pre-deal levels despite a promised £950 million payout if the Sky transaction completes, reflecting investor uncertainty around the lengthy review process.

Break-up plan faces scrutiny

As reported by the Financial Times, McCall says running ITV has been her toughest role, with her tenure marked by a sharp industry shift toward global streaming platforms and pressure on the broadcaster's share price.

Sky is set to buy ITV's broadcast division, including its linear channels, the ITVX streaming platform and the group's stake in ITN and local news, leaving ITV Studios as the remaining production business. McCall describes the transaction as historic for the industry and says a two-phase competition review could take a year to complete.

She says regulators now see the financial strain on traditional broadcasters as advertising, overheads, competition and viewing figures come under pressure. Ofcom data cited in the interview shows YouTube accounted for 15 per cent of overall viewing last year and Netflix 9 per cent, both up 1 percentage point, while ITV stood at 11 per cent, down 1 point; advertising revenue fell 5 per cent.

McCall also says investor unease reflects uncertainty over both the duration and the risk of the review. ITV shares remain 20 per cent below their level at the time the deal was announced in July, even as the company promises a £950 million payout to shareholders if the transaction proceeds.

She rejects criticism that the agreed price is too low, arguing Sky and parent Comcast were not the only parties engaged in talks. McCall says two other unnamed media groups also showed interest in the assets.

Studios strategy and wider market pressure

Beyond the transaction, McCall argues ITV's deeper challenge lies in operating as a legacy broadcaster in a market transformed by streamers such as Netflix and YouTube. She says the UK advertising market is also being hurt by weak business confidence, with companies protecting profits by limiting spending on marketing and promotion.

McCall remains critical of UK capital markets, saying pension funds' retreat from domestic listed equities has undermined support for companies such as ITV. She says access to public markets remains important for the country and argues tax incentives should change to encourage long-term investment.

On the future of the remaining business, McCall says ITV Studios is large enough to stand alone, describing it as the world's second-largest TV production company. She says the division has grown nearly 40 per cent over the past eight years, while also warning that dealmaking in production remains fragile because success depends on retaining creative talent.

McCall says the ITV role has been much harder than expected and has lasted twice as long as she anticipated. While she is widely expected to leave once the Sky deal completes, she says she can see herself moving from chief executive roles into a future board chair position.

UK budget pressures tied to rising inflation and higher borrowing costs were the focus of our earlier coverage, as ministers faced a widening fiscal gap ahead of the October 28 Budget. We noted that maintaining investor confidence while protecting public services could force difficult choices on taxes and spending, with limited room for manoeuvre despite government pledges on headline tax rates.

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