Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
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 a tenth in early 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 on 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 growing its global studios division.
ITV’s chief executive Carolyn McCall said on Friday the 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, which could also include the acquisition of rival production companies and intellectual property that can be turned into TV shows such as character rights and rights owned by literary estates.
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.
BBC Studios generated £2.1bn in revenue in its past financial year and paid a dividend of £176mn to the public sector broadcaster. In addition, it invested £177mm in BBC-commissioned content.
Fussell has set out a target to take revenues by the end of the charter in 2027 to £3.2bn, with returns of £450mn. However, even these returns are nowhere near the £3.8bn that was generated by the licence fee in income last year for the BBC.
BBS Studios commissions its own programmes as well as invests in other companies’ programmes and sells them around the world. It owns 55 different channels in more than 100 countries, including half of BBC America with US broadcaster AMC, and now all of streaming service Britbox International.
Fussell described the Britbox service, which is increasingly popular in the US, as 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.
The group is also relaunching the BBC website and app in the US ahead of the election, which brings together news and sport in the country.
