ITV has confirmed it remains in “active discussions” with Sky over a possible sale of its media and entertainment (M&E) division.

The broadcasting group confirmed in November last year that it had started preliminary discussions with Sky regarding an acquisition for the M&E arm of ITV, which is valued at £1.6bn.

It also revealed in March this year that talks were still being held but noted at the time that there was “no certainty” an agreement would be reached.

ITV revealed the latest update on the talks as part of a trading statement for its Q1 period, covering the three months to 31 March. In the figures, the broadcaster reported a 2% year-on-year fall in total advertising revenue to £416m, although revenue in ITV Studios, the company’s production arm, saw a 4% rise to £400m.

Revenue in the group’s M&E division, which includes ITV’s free-to-air TV channels and the streaming service ITV X, slipped by 2% compared to the opening quarter last year, falling from £489m to £477m.

“Our strategic priorities of expanding ITV Studios and supercharging our digital M&E business continue to deliver clear and positive results,” ITV’s chief executive, Carolyn McCall, commented.

“While we are monitoring the ongoing difficult geopolitical environment, we are focused on what we can control and remain on track to deliver our full-year guidance of good revenue growth in ITV Studios and strong profitable digital revenue growth in M&E.”

For the rest of the financial year, ITV said it is still on track to meet expectations with no change to its full-year guidance.

In its M&E division, compared to the same period in 2025, ITV is expecting total advertising revenue to be up by around 10% in Q2, and up around 4% across the H1 period, as it anticipates a strong July driven by the Men’s Football World Cup.

However, head of markets at AJ Bell, Dan Coatsworth, described ITV’s current trading in its M&E arm as “lacklustre”.

“The Middle East conflict has the potential to cause a sharp drop in advertising if companies are worried that the oil price spike is dampening consumer spending,” Coatsworth commented. “There’s no point investing big money on adverts if consumers aren’t splashing the cash. Fortunately for ITV, it appears that advertising activity has trundled along so far, albeit not exactly at big levels.

“A lot of advertising slots are booked well in advance, so there is still the potential for ITV to suffer from a pullback in client activity if oil prices don’t come down soon. There might be a lag effect on its earnings.

“The one saving grace is the World Cup as advertisers might still want to take the risk of booking airtime if they know there will be significant viewing figures for matches.”

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