UK TV giant ITV on Thursday reported slightly lower earnings for its ITV Studios production unit, due to a previously highlighted change in revenue mix, and a less pronounced than expected 5 percent decline in advertising revenue for the full year of 2025, compared to 2024.
The company estimated late last year that advertising revenues for the full year of 2025 would fall by 6 percent, with a 9 percent decline in the fourth quarter as “the UK economic outlook remains uncertain, with caution exercised widely across business sectors ahead of the Budget in November.”
On Thursday, ITV, led by CEO Carolyn McColl, said its total overseas revenues in the most recent full year rose 1 percent, with total revenues unchanged, while adjusted EBITDA fell 1 percent amid “tight cost management.”
ITV is in talks with Comcast’s Sky. The company said in November that it was in discussions to sell its media and entertainment unit to Sky for £1.6bn. ITV’s financial update on Thursday stated Sky this way: “Following our November 2025 announcement, we remain in discussions with Sky regarding the potential sale of the M&E business. There can be no certainty as to whether the deal will take place and an update will be made in due course.”
Over the past 36 hours ITV Studios has become a renewed focus of deal talk following the blockbuster merger between production giants Banijay and All3Media, 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. RedBird IMI acquired All3Media in 2024 for $1.45 billion.
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.”
In response to lower demand for advertising, ITV said in November that it had identified additional temporary savings of £35 million in its media and entertainment (M&E) sector in the fourth quarter. “These savings align our M&E cost base – particularly content and discretionary spend – with the weak advertising demand we are seeing in the fourth quarter and will largely offset the expected decline in overall ad revenue,” she highlighted.
ITV said the targeted cuts included saving £20 million ($26 million) in content, “as we move some programming into 2026, which will be funded from existing 2026 content spending plans.”
McCall praised ITV’s “good performance in 2025, ahead of current market expectations and against the backdrop of a challenging market.” She added: “Thanks to a strong digital platform, we have successfully capitalized on growth opportunities, achieved resilient profits and generated healthy levels of cash. Our results demonstrate the scale of the transformation we are witnessing as we continue to successfully implement the ‘More Than TV’ strategy.”
The ITV CEO also stressed that “we have achieved a key strategic goal with two-thirds of our revenue now coming from ITV Studios and our digital M&E business.” Looking to the future, McCall said: “We are focused on delivering continued strategic progress, driving profitable growth and strong cash generation, supported by our consistent value creation strategy.”
As part of ITV’s ongoing cost savings programme, management is targeting an additional £20 million ($27 million) of “permanent non-content cost savings in 2026 as we continue to build a leaner business.” “We expect our total content spend to reach around £1.225 billion ($1.640 billion) in 2026, as we continue to optimize our content spend to better reflect viewer dynamics,” she added.
Advertising revenues in the first quarter are expected to decline by about 2 percent. “As usual, advertisers are reserving budgets for Q2 and Q3 spending around expanded men’s products. [soccer] ITV said: “The World Cup. We are showing 19 more matches than in 2022, and with more matches in prime time. We are confident that [Cup] “It will deliver strong advertising performance.”
Asked about the impact of the volatile political situation in the Middle East on advertisers’ behaviour, McCall said ITV had seen “no impact”.
