U.K. TV giant ITV, led by CEO Carolyn McCall, reported the latest revenue trends for its ITV Studios production arm and advertising business on Wednesday, and the latter is facing some challenges.
Total third-quarter ad revenue fell 8 percent from the year-ago period, leavving nine-month ad revenue down 1 percent, ITV disclosed.
“Due to the weaker demand for advertising, we expect total advertising revenue to be down around 5-10 percent in the fourth quarter and down around 2-3 percent for the full year 2026 when compared to the same period in 2025,” McCall said. “To align our costs with advertiser demand, we have identified £30 million ($40 million) of additional temporary savings in Media & Entertainment (M&E) in the fourth quarter. This comprises: £25 million ($37 million) of content savings and £5 million ($7 million) of discretionary non-content savings.”
The ad business is part of ITV’s Media & Entertainment (M&E) segment, which the company agreed to sell to Comcast’s Sky in July for $2.13 billion. “While the outlook for advertising remains muted, we are firmly focused on self-help and mitigating actions, while continuing to execute our strategic priorities to drive performance across both businesses,” McCall said.
The CEO also commented on the outlook for the Sky deal. Last week, the U.K. government filed an intervention notice, meaning U.K. Culture Secretary Lisa Nandy asked regulators Ofcom and the Competition and Markets Authority (CMA) to formally investigate the deal. While Ofcom’s review will focus on the proposed merger’s public interest impact, the CMA will investigate it from a competition perspective.
“The agreed sale of our M&E business to Sky, which will position ITV Studios as a highly attractive, pure-play, global content business, is progressing as planned,” McCall said. “On Nov. 4, the Secretary of State issued a Public Interest Intervention Notice (PIIN). This is an expected and important milestone in the regulatory review process, and we are pleased that it is moving at pace. We continue to expect completion in the second half of 2027.”
ITV on Wednesday disclosed that ITV Studios, which will indeed become a standalone company once the Sky deal closes, recorded a revenue drop of 1 percent for the first nine months of 2026.
“ITV Studios’ performance for the first nine months, with total revenue down 1 percent, was in line with our expectations,” McCall said. “As previously guided, production deliveries and licensing deals are heavily weighted to the fourth quarter this year, and despite this, we have a greater proportion of our full-year Studios revenue secured than at this point last year.”
So what is going on in the company’s ad business? ITV said that “7 percent growth in digital revenue [was] offset by the decline in linear advertising,” adding: “Digital advertising revenue grew 6% with continued momentum on ITVX, which delivered record viewing during the period – driven by the final matches of the [soccer] World Cup, alongside drama and entertainment titles, such as Trigger Point, Big Brother and Love Island. So far this year, eight of the 10 most-watched series across commercial broadcasters and streaming services were on ITV.”
ITV’s 1 percent ad revenue drop for the nine-month period ended up “outperforming our broadcast competitors but [coming in] slightly below previous guidance, impacted by macroeconomic uncertainty,” the firm said.
Total ITV revenue fell 1 percent over the first nine months of 2026, with external revenue down 2 percent.
ITV agreed to sell its media and entertainment arm to Sky in a deal that will see it divest its terrestrial TV channels and its streaming service ITVX. Sky is led by CEO Dana Strong. It not only operates pay-TV and streaming businesses in the U.K., Ireland and Italy but has also been growing its telecom offerings, such as broadband and mobile phone operations. Sky also owns the production arm Sky Studios, which is led by Cécile Frot-Coutaz and has been growing its investment in original content creation.
