Will UK TV giant ITV, led by CEO Carolyn McCall, feel more pressure to boost the size of its production arm ITV Studios following this week’s news of the mega merger between production giants Banijay and All3Media? What’s the fate of ITV deal talks with Comcast’s Sky? And what the Paramount Skydance deal means for Warner Bros. Discovery for ITV? These were just some of the questions asked on a media call Thursday following the company’s latest earnings update.
The merger has been the subject of much controversy for ITV Studios, which produces shows such as Love Island, Britain’s got talent and the hit Harlan Coben Netflix series Fool me once. All3Media is owned through a co-investment partnership between Gerry Cardinale’s RedBird and IMI Media, led by RedBird Operating Partner and RedBird IMI CEO Jeff Zucker.
In November, ITV revealed talks with Sky focused on the company’s commercial free-to-air TV channels in the UK, as well as its ITVX streaming platform, with a deal set to leave ITV Studios as a separate asset.
Asked about the status of Sky’s talks and the outlook for the ITV Studios deal during an earnings conference call on Thursday, McCall said: “We are actively engaged with Sky.” She added that any further updates will be shared as and when required.
Regarding ITV Studios, she said: “We are very confident in the scale…[and] The nature of the business is “very diverse”. For Bangai and All3Media, “the merger will be a lot about cost synergies, but it will not impact our growth.”
What does the mega deal mean for ITV Studios? “We don’t feel it’s going to have any impact on us,” McCall said, highlighting: “We’re probably two-and-a-half times bigger than All3Media, so we need to put that in perspective. All3 is a really good company, but it’s a lot smaller than I think people realise.” So, All3Media has long been smaller, and Banjay has long been larger than ITV Studios, which means its portfolio doesn’t change much.
McCall later added: “For us, size is not as important as labels” and content, he emphasized. “We can compete.”
What about ITV’s overall approach to potential deals? “We’re growing organically where we can,” McCall said of ITV Studios’ M&A strategy. Talent deals are another major focus. Regarding the company’s M&A strategy, “we are very disciplined” to ensure focus on shareholders, she added.
Julian Bellamy, managing director of ITV Studios, echoed this, citing the need for any deal with ITV Studios to achieve “cultural and strategic fit and create value for our shareholders”.
ITV’s earnings report also saw MCCall highlight the success of both its traditional cable networks and ITV Studios business. “We have created two flexible and attractive businesses,” she said.
During a conference call on Wednesday, Francois Riahi, CEO of Banijay Group, Banjay’s parent company, was asked about the combined entity’s potential interest in ITV Studios. “Consolidation is the name of the game,” he said, adding that the company would keep all options open. “When you look at the Warner-Paramount deal, it’s very easy to understand why you need to be big and global to be relevant in this sector. So we share that view with RedBird IMI.”
ITV management on Thursday appeared unconcerned about Hollywood’s latest blockbuster deal. Asked about Paramount Skydance’s deal with Warner Bros. Discovery, “Paramount, now that they have stability…and they’re ambitious, they’re open,” McCall said.
