ITV heads into results under Sky scrutiny

That is the event hanging over the broadcaster’s figures: a strategic disposal meant to reshape ITV now has to pass through Competition and Markets Authority and Ofcom investigations, with both asked to report to Nandy by January 27 on the effect of the deal on media plurality and free speech in the UK.

The sale, agreed in July, covers ITV’s terrestrial channels and ITVX, but not ITV Studios, the production arm behind shows including I’m A Celebrity… Get Me Out Of Here and dramas such as Mr Bates Vs The Post Office. The broad corporate logic is easy enough to follow. ITV has been trying to tilt away from a business more exposed to the advertising cycle and toward production income that looks steadier and easier to sell across different buyers and territories.

Nandy’s intervention complicates that story because this is no longer only about portfolio management. The Independent reported that she also plans to bring forward legislation so the public-interest test can apply to on-demand programming as well as traditional broadcasting. That gives the episode a slightly sharper edge. Ministers are not just examining one transaction; they appear to be using it to test whether the rules still fit a media market in which streaming sits beside old broadcast power rather than outside it.

For investors, the immediate problem is plainer than that. Delay alone can be costly when a company has already signalled a strategic turn. Russ Mould, investment director at AJ Bell, told The Independent that ITV is “hoping to change the channel and start a new season with a fresh cast” by selling its broadcast business and focusing on TV production. He added that this would remove some reliance on advertising spend, “which is heavily linked to the ups and downs of the economy and has an outsized impact on investor sentiment.”

He also put the practical risk bluntly: “At the very least this could delay any deal from getting across the line.” Management, he said, will be expected to address whether the scrutiny could derail the strategy and what ITV would do if the deal were blocked.

That makes the coming update awkward in a fairly specific way. ITV said in July that performance would be weighted to the second half because of programme scheduling and licensing deals. It also cautioned that advertising revenues were set to fall around 5% year on year in the third quarter due to macro-economic headwinds. In the previous three months, advertising revenues rose 3%. For the first half, pre-tax profit increased 16% to £78 million as total group revenues rose 2% to £1.89 billion.

Those numbers are not disastrous, which is part of the tension here. ITV is not making this move from obvious collapse. It is trying to get ahead of an older commercial pressure: dependence on ad markets that turn sour quickly, while global streaming groups keep changing what scale looks like.

The scrutiny now forces two arguments to run side by side. ITV has to convince markets that the sale still offers a workable future for the business. At the same time, regulators have been asked to consider whether handing more of that media infrastructure to Sky creates a public-interest problem large enough to slow or stop it.