By Paul Sandle
LONDON (Reuters) -Britain’s ITV said its Studios production business was performing both creatively and commercially after it delivered record profits in 2024, but it would not be drawn on reports it could spin it out and merge it with RedBird IMI’s All3Media.
The performance by Studios, which made “Rivals” for Disney, helped ITV meet market expectations with an 11% rise in earnings.
It said the unit would deliver “good” revenue growth in 2025, but its margin would fall as the market recovered from past strikes by U.S. writers and actors.
Its Media & Entertainment broadcast and streaming unit – the other half of the group – would be hit by tighter rules on advertising junk food from October and the lack of a major soccer tournament in the summer, it said.
ITV has been reducing its reliance on volatile advertising on its linear TV channels by investing in Studios and its ITVX streaming platform, which offers targeted and younger audiences.
Chief Executive Carolyn McCall said she had transformed ITV, which counts drama “Unforgotten” among its recent hits, from an analogue business to a successful digital one.
“We’re definitely a more resilient business, with the proportion of our revenue that comes from production and digital now accounting to close to two thirds of our revenue,” she told reporters on Thursday.
Shares in ITV, which have fallen nearly 60% since McCall took over in 2018, rose 5% to 74 pence in early deals, helped by a forecast for broadly flat advertising revenue for the first four months of 2025. Some analysts had forecast a fall.
Reuters reported in January that ITV was in early-stage talks with Abu Dhabi-backed RedBird IMI to merge their respective production businesses, ITV Studios and All3media.
McCall said there had been speculation about all studios businesses, including rivals Banijay and Fremantle.
“We won’t comment on any speculation,” she said. “All we would say is we continue to build the business as it has been built.”
She said there were “definite merits” in being an integrated producer-broadcaster, but ITV’s board kept all options open. “We review everything and we review it regularly,” she said.
AJ Bell investment director Russ Mould said any bidder would have to dig deep to persuade ITV’s board and shareholders to accept an offer for Studios.
“Speculation is rife that All3Media owner RedBird IMI wants to buy the production business and ITV’s latest results have effectively pushed up the price that’s needed to get a deal over the line,” he said.
ITV reported adjusted earnings of 542 million pounds ($700 million) on total group revenue of 4.14 billion pounds in 2024.
($1 = 0.7744 pounds)
(Reporting by Paul SandleEditing by Sarah Young and Frances Kerry)
