Media

ITV sells stake in US streaming service to BBC Studios in £235mn deal


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ITV has sold its 50 per cent stake in BritBox International, a subscription streaming service that broadcasts shows such as Death in Paradise in the US, to BBC Studios for £235mn.

Shares in the broadcaster rose more than 15 per cent in morning trading on Friday after the company said it would return the net proceeds of the deal to investors through a share buyback after its full-year results, which would be released next week.

The deal comes as ITV faces fresh pressure on its balance sheet from a steep decline in advertising revenues from its traditional TV broadcast channels. The company is trying to replace those revenues with a shift into advertiser-funded streaming services through smart TVs and online, as well as expanding its global studios division.

Next week, ITV is expected to flag fresh cost-cutting initiatives as the British broadcaster adjusts to a double digit decline in traditional advertising revenues.

The broadcaster has already frozen hiring and clamped down on expenses to keep costs lower. ITV is expected to reveal a fall in advertising revenues of about 13 per cent for its traditional “linear” channels at its full-year results, according to analysts at Citi, although stronger sales for digital advertising should reduce this to about 8 per cent overall.

The UK broadcaster is also expected to show a better start to the year, however, with analysts forecasting that the rest of the year could also see some recovery around key events such as the Uefa Euro football tournament.

ITV’s chief executive Carolyn McCall said on Friday that the BBC deal showed the company was “focused on its core strategic goals”.

BBC Studios, the commercial arm of Britain’s national broadcaster, is increasing investment in new productions and services. Tom Fussell, the head of BBC Studios, said the BritBox deal was an “important acquisition for us”.

He added: “We are taking full ownership of a successful, growing service we know well and that fits with our stated ambition to double the size of our business.”

ITV Studios will be paid for the use of its programmes on BritBox International under a new licensing agreement. The broadcaster said the deal was for a cash sum of £255mn, providing net proceeds of about £235mn.

BritBox International streams British entertainment shows to eight countries: the US, Canada, Australia, South Africa, Denmark, Finland, Norway and Sweden. BritBox UK is unaffected and will still feature BBC content.

Fussell described the Britbox service, which is increasingly popular in the US, as featuring shows that have a “lot of murders in British villages”.

BBC Studios also owns channels in the UK such as UKTV, which had about a tenth of the linear advertising market last year across the Dave, Gold, Alibi and Yesterday channels.



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