Banijay-All3, Mediawan likely suitors for ITV Studios

A combined Banijay-All3Media and KKR-backed Mediawan are among the leading contenders touted to buy ITV Studios, with the highly-rated division soon set to become a standalone entity.

Industry insiders have pointed to the Julian Bellamy-led Ludwig and Love Island producer as being “the real prize” in the wake of Comcast-backed Sky’s £1.6bn deal for the channel and streaming assets of ITV, confirmed today.

While that acquisition – and the creation of a standalone ITVS – is expected to take the best part of 12 months to complete, analysts have told Broadcast International that all eyes are already on who will make a move for the production and distribution business.

ITVS’s UK labels include Big Talk, The Garden and Twofour, while its international footprint extends to a dozen countries with companies such as Lingo Pictures in Australia, Il Fasario producer Cattleya in Italy, and US-based firms including High Noon Entertainment, ITV America and Tomorrow Studios.

Its output ranges from Rivals for Disney+ courtesy of Happy Prince, to Peacock hit Love Island USA from ITV America and natural history giant Plimsoll Productions.

The group, which is set to trade on the London Stock Exchange once the deal goes through, will command annual revenues of around £2.13bn (2025) and is being bolstered by the addition of Bake Off owner Love Productions from Sky and a long-term content supply agreement with ITV, worth at least £2.1bn between 2028-2032.

Banijay and All3Media, which are in the midst of wrapping their £3.8bn deal, are seen by many as a likely suitor, with All3 owner RedBird IMI previously linked to a move for the Force Of Nature outfit last year.

Whether the company will have the appetite to move from one major takeover to another so soon after remains to be seen, with fast-growing Mediawan seen by some as a more likely buyer.

The decade-old French group has spent billions of pounds acquiring companies ranging from See-Saw Films to Brad Pitt’s Plan B Entertainment, as well as numerous European groups such as Leonine, and group chief content officer Elisabeth d’Arvieu made little secret of her desire for more English-language focused companies when talking to Broadcast International in February.

RTL Group-owned Fremantle could also look to bolster its growth trajectory having largely pulled back from M&A over recent years, with ITVS being a large enough prize to encourage a return to the M&A fray, suggests Tim Westcott, practice lead of digital content and channels at UK-based analysts Omdia.

Westcott also points to expanding French operator Canal+ as another potential suitor for ITVS, which PP Foresight founder Paolo Pescatore described as “a far cleaner and more focused global content company.”

He told Broadcast International: “That makes it easier to value and far more attractive to potential buyers seeking scale, IP, formats, production capability, and international distribution.”

Pescatore also points to Banijay and Mediawan, but downplayed the likelihood of a US studio or streamer making a move.

“That cannot be ruled out but ownership by one global platform could make it harder for ITV Studios to remain a neutral supplier to the wider market,” he added.

Guy Bisson, executive director at Ampere Analysis, agreed, adding: “While ITVS is scaled for Europe, is it scaled enough for a global streamer to come sniffing around? Probably not.” He expects streamers to instead focus on broadcaster partnerships to gain access to local content.

UK-based analyst Ian Whittaker added that he expected ”some sort of deal” to be done within the next 18 months, “probably a consolidation play with other studios.”

He also suggested that NBCU could return for ITVS, with the US company soon to be freed from its Comcast ownership. “The shareholder dynamics made a Comcast bid for all of ITV difficult, that may not be the case in the future,” he added.

ITVS could also, of course, remain a standalone entity and look to acquire companies of its own. On today’s investro call, ITV chief exec Carolyn McCall and Bellamy both dismissed the notion that the production-distribution group would immediately become a sales target, with the latter also scotching suggestions it needed a statement acquisition to prove its clout.

“We absolutely believe we have the scale to compete,” he said. “We have a competitive edge in the market. We have a clear and consistent approach to our M&A but we’re of course always looking to add [on our terms].”

Pescatore said remaining independent “is possible”, particularly with the supply agreement struck with Sky “and a clearer investment story.”

But, he added that “separation shines a much brighter spotlight on the business - ITV Studios can stand alone, but it will now sit at the centre of the next wave of speculation about media consolidation.”

Westcott agreed that the spin-off makes ITVS an acquisition target, but highlighted that the list of potential buyers “is going to be short.”

He continued: “In a market where key clients are cutting back investment and user generated video and vertical formats like microdramas are on the rise, it’s questionable what advantages massive scale would bring.

“ITV Studios could also be in the market to make further acquisitions itself, decoupled from the ITV M&E business and armed with its content supply agreement. Its continuing as a strong local champion looks like a better outcome for the UK TV industry than flogging the company off for a short-term gain.”