The proposed £1.6bn takeover of a big chunk of ITV by Sky would be the biggest consolidation in British broadcasting in more than 20 years, and reflects fundamental changes in viewing habits and commercial realities.

For Sky, a deal that brings together Ant and Dec with Gary Neville and Jamie Carragher would make it the UK’s largest commercial broadcaster, and strengthen its hand in the battle with US streaming giants that have upended the entertainment business.

For ITV’s shareholders, who have seen the value of their investment decline as advertising revenue, like viewers, has migrated online, it may be a chance to say, “I own a terrestrial broadcaster, get me out of here.”

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Neither Sky or ITV would publicly discuss who made the initial offer, and both stress that talks are at an early stage, but privately, both sides emphasise the mutual opportunity.

For Sky, owned by US giant Comcast since 2018, there is the opportunity to create a larger pool of content and subscribers.

The deal would see it acquire ITV’s media and entertainment business, including its free-to-air channels and public sector broadcaster (PSB) licence, which runs to 2034, as well as the ITVX streaming platform, which has 40 million registered users.

The ITV brand is likely to be retained, and the two companies run separately, but Sky would look to leverage its commercial and technology strengths.

ITV’s PSB licence includes the requirement that ITV’s app be “available, prominent and easily accessible” on online platforms, a crucial shop window as viewers access content directly.

Added to Sky’s existing 13 million subscribers for largely pay-walled content in the UK, it would add muscle as the broadcaster competes for attention, subscription revenue and advertiser spend.

The acquisition would be a restatement of commitment to Sky from Comcast. Having paid £31bn for Sky in a bidding war with Disney seven years ago, it wrote down that investment by more than £6bn in 2022, and earlier this year announced the sale of Sky Deutschland.

While it is navigating the conclusion of exclusivity deals with content providers, including with HBO that gave it rights to hits including Succession, the £5bn renewal of Premier League rights this season underlined the centrality of sport to Sky’s offer.

Scale matters because even companies as prominent in the UK as Sky and ITV are competing with giants, both for audiences and advertisers.

Netflix has 301 million subscribers worldwide and annual revenues approaching $40bn. Amazon, the largest retailer in the world, is now an entertainment content provider. In the US, Warner Bros. Discovery is considering a sale, having already rejected reported offers worth more than $60bn.

Google and Meta, meanwhile, gobble up to 60% of all UK advertising spend, a shift in the last decade that has hit ITV particularly hard.

When it was founded 70 years ago, the third channel was the only way advertisers could reach television viewers. Today, it and Sky are competing for a slice of a shrinking pie, with one source citing an estimate that their combined UK advertising revenue is nine times smaller than Google and Meta’s.

Any proposed deal will face regulatory scrutiny from Ofcom and the Competition and Markets Authority, but both parties will argue that these commercial realities mean consolidation would strengthen the broadcast sector rather than weaken it.

ITV still generates critical and commercial hits and live moments. Last year, the largest audiences for sport (England’s Euro 2024 semi-final), drama (Mr Bates v the Post Office) and entertainment (I’m a Celebrity) were all on ITV.

Translating that into a commercial model that satisfies investors has proved difficult, with the general drift of the UK economy not helping. The 19% bump in the share price on news of the proposed takeover may be a welcome series finale.

Elon Musk could be on track for a $1trn (£761bn) pay package – if Tesla meets a series of extremely ambitious targets over the next 10 years.

The world’s richest man has the potential to become a trillionaire after the controversial plans were approved by 75% of the company’s shareholders.

It would be the largest corporate pay package in history.

However, it won’t be easy. As part of the agreement, Musk will need to deliver 20 million Tesla vehicles over the next decade – more than double the number churned out over the past 12 years.

He will be tasked with dramatically increasing the company’s valuation and operating profits.

Another requirement is for Tesla to roll out one million AI-powered robots – despite the fact it hasn’t released a single one so far.

Musk will also need to come up with a succession plan on who will replace him as the chief executive of Tesla.

As each step is successfully completed, he will receive more company shares and his ownership stake will rise – potentially from 13% now to almost 29%.

And even if Musk falls short of some of these targets, he could end up earning a lot of money.

Figures from Forbes magazine suggest the 54-year-old already has a net worth of $493bn (£375bn) – and while that means he has more money than anyone else on the planet, he isn’t the richest person in history… yet.

That title belongs to John D Rockefeller, the railroad titan who had a wealth of $630bn (£480bn) back in 1913 – when adjusted for inflation.

Why?

Now is the moment Tesla wants to innovate, develop into robotics, self-driving and embrace the growth of artificial intelligence (AI).

It’s seeking a visionary leader to spearhead this move. And a lot of Tesla’s market value is tied up in this ambition.

Tesla’s board of directors, who oversee the management of the business, are adamant that only Musk can make the lofty ambitions a reality.

Some believe there’s no one else like Musk.

More shares in the company are “critical to keep Musk at the helm to lead Tesla through the most critical time in the company’s history”, said financial services firm Wedbush.

“We believe this was the smart move by the board to lay out these incentives/pay package at this key time as the biggest asset for Tesla is Musk … and with the AI revolution, this is a crucial time for Tesla ahead with autonomous and robotics front and centre.”

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Opposition

Not everyone is in favour of the pay package.

Major investor advice firm Institutional Shareholder Services (ISS) warned the 10-year pay agreement reduces the board’s ability “to meaningfully adjust future pay levels in the event of unforeseen events or changes in either the performance or strategic focus of the company over the next decade”.

In a note, ISS said: “The high value of each tranche could also potentially undermine Musk’s desire to achieve all goals and create significant value for shareholders”, and that the goals “lack precision”.

Musk has described ISS and another major adviser, Glass Lewis, as “corporate terrorists”.

There was speculation he would walk away from the business if the package was not agreed on.

ITV has revealed talks with Sky, the owner of Sky News, over the possible sale of its media and entertainment (M&E) division in a deal worth £1.6bn.

Sky News understands the approach centres on the potential creation of a UK-focused streaming giant.

The division takes in ITV’s current broadcast operations and channels, which are largely dependent on advertising revenue.

The talks do not include the company’s studios arm, which makes shows such as I’m A Celebrity… Get Me Out Of Here!

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“There can be no certainty as to the terms upon which any potential sale may be agreed or whether any transaction will take place”, a statement by ITV to the London Stock Exchange said.

“A further announcement will be made in due course if appropriate”, it concluded.

ITV shares jumped by 15% in early trading in response to the statement.

Sky, which is wholly owned by the US media and entertainment firm Comcast, declined to comment.

ITV released its statement after news of the discussions were first revealed by Bloomberg News.

Just hours earlier, the company’s latest financial results showed it was moving to save millions of pounds due to an advertising slowdown.

ITV reported delays to some programmes over the coming months to save costs as a result.

It predicted a 9% decline in ad revenues across 2025, with the most recent trends being blamed on advertisers pulling back on spending in anticipation of the chancellor’s budget later this month.

It is understood that a possible deal between Sky and ITV would seek to create a larger, more attractive proposition for advertisers in the UK streaming sphere through a focus on UK audiences.

ITV has long been the subject of takeover speculation.

The latest came from the Reuters news agency earlier this year when it reported early-stage talks with Abu Dhabi-backed group RedBird IMI about a possible merger of their respective production businesses.

French media group Banijay was also reported to have held discussions about a possible offer for ITV’s studio business or a full takeover.