Speculation that UK media group ITV might sell off some or all of its production & distribution arm ITV Studios sent the company’s share price up by 8% on Monday.While it is highly unlikely that ITV would completely detach its legacy broadcasting business from its fast-growing studio operation, the spike in market valuation will be welcome news to CEO Carolyn McCall. She is believed to be frustrated that the financial markets dwell more on the company’s traditional ad-funded linear channel business than its expanding content division, while giving short shrift to its streaming ambitions. At time of writing, ITVS is home to 60 production labels in 13 countries including the UK, the US, Australia, France, Germany, the Nordics, Italy and the Netherlands. It is also one of the biggest distribution businesses outside the US.The mostly likely outcome is that ITV would sell a minority stake in the studio operation to
- a) generate new investment/outlets and
- b) help fix a valuation on its content business. Potential buyers include private equity firms and European media groups – though a bid from a US-backed streamer wouldn’t be wholly unexpected.
Media interest in the story was sparked by an FT report – but ITV refused to comment on the speculation. One other eventuality that needs to be considered is that ITV may be acquired in its entirety – with the share price down 40% since the start of 2022.
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