ITV in the Spotlight: Speculations about a Possible Breakup

The British broadcaster ITV is known for emotional relationship dramas in shows like "Love Island," but its own corporate relationships are currently providing plenty of conversation topics. Analysts and investors are once again speculating about potential takeovers and partial sales of the company, with interest from private equity funds reportedly emerging for a split. For almost two decades, takeover rumors have been a recurring theme around ITV. Investors still remember with regret the failed attempt by cable operator NTL to acquire ITV in 2006 for £4.7 billion. Today, ITV's market capitalization is around £2.7 billion, raising the question of whether the company is undervalued. Although the company has recently strengthened its production division under the leadership of CEO Carolyn McCall — with revenues there rising by an impressive 37 percent since 2017 — ITV is still seen as a "linear" broadcaster, whose fate heavily depends on the advertising budgets of British companies. Recent sales in the industry, like that of All3Media, have drawn market participants' attention to the possibility that ITV might be noticeably undervalued. Some analysts argue that selling off the production division could increase the company's value. However, a functional separation from ITV Studios, which produces a variety of key programs like "Love Island" and "Coronation Street," appears complex. McCall had stated as recently as 2022 that the production activities are well-integrated into ITV's overall structure, making a complete separation seem inappropriate. This also raises the question of who would be interested in the remaining parts of ITV. Despite progress with the streaming service ITVX, the traditional television business remains dependent on volatile advertising revenue. Stabilizing this income, therefore, seems to be the most promising way to achieve a sustainable increase in the stock price.