The proposed sale of ITV’s broadcasting arm to Sky has been greeted, for the most part, with a kind of weary inevitability. ITV, the most successful commercial public service broadcaster in British history, is preparing to place its channels, ITVX and advertising operation inside Sky. ITV Studios will remain separate. The programmes, we are told, will remain free to air. The newsrooms will remain editorially distinct.
The danger now is overcorrection: waving Sky-ITV through as an act of regulatory penance
The temptation is to treat this as sad but necessary consolidation. British broadcasters are too small. Global platforms are too large. ITV’s advertising revenues have been moving the wrong way. Sky has the technology and advertising machinery. ITV has free-to-air reach and national habit. Put them together and a stronger British-facing competitor emerges.
That may be true. But it should not mean the deal gets waved through with the light-touch scrutiny that Philadelphia-based Comcast might prefer.
To understand the risk in 2026, we need to return to 2009, when British regulators killed Project Kangaroo.
Kangaroo was the proposed video-on-demand joint venture involving the BBC’s commercial arm, ITV and Channel 4. In plain English, it was an attempt to create a shared British online television platform before streaming swallowed the world. It would have pooled archive content and created a domestic on-demand destination at a moment when audience behaviour was beginning to shift, but had not yet hardened around global platforms.
The Competition Commission blocked it in February 2009. Its concern was that the venture would restrict competition in the emerging UK video-on-demand market. Looked at through the narrow lens of the time, that was a predictable regulatory instinct. Powerful British broadcasters combining their rights and distribution muscle might have made life harder for smaller players. They might have had too strong a hand in the market for on-demand rights.
Seen from 2026, the decision looks like a heavy-handed misreading of the future. Regulators saw domestic concentration and missed global platform power. They saw British broadcasters trying to get bigger, but not the scale of the companies that were about to arrive. They stopped domestic scale forming just before global scale arrived.
The snapshot in 2009 was deceptive. British free-to-air television still looked almost indecently healthy. The X Factor was moving towards its imperial phase. Britain’s Got Talent had become a national event. Bake Off was about to arrive. Channel 4 still had cultural swagger, even as Big Brother was running out of road. To a regulator, the public service broadcasters did not look like fragile institutions trying to build a seawall before the flood. They looked strong in audience and full of inherited power.
Until then, commercial television had always been cyclical. In a recession, marketing directors cut budgets quickly; when confidence returned, they came back to television because it remained the fastest way to stimulate demand at scale. That was the old case study. But 2009 was not just another turn of the advertising cycle. It was the beginning of a structural break that would break broadcasting’s grip on mass attention.
Netflix had launched streaming in the US in 2007. It would arrive in the UK in 2012. By 2013, with House of Cards, it had become a commissioner in full public view. The threat was already forming. But the regulator, unlike the proponents of Project Kangaroo, saw only recession, not rupture.
They were looking at the old commercial television cycle and missing the new television economy. They saw a cyclical advertising downturn. They did not see that distribution, habit and interface were about to move somewhere else.
The language was changing too. Broadcasters still talked about audience. The new market would be about attention. Audience could be measured in ratings and reach. Attention would be fought for across screens, platforms and devices. Television was about to become part of a wider attention economy, where the programme still mattered, but so did the route to it and the platform that owned the viewer relationship.
Sky is buying a free-to-air relationship with Britain: a Channel 3 licence
So the Sky-ITV deal is the bill arriving seventeen years late. In 2009, Britain stopped its broadcasters building together because the result looked too dominant. In 2026, ITV is selling because the market that followed was too brutal for it to stand alone.
That is the cost of mistaking market tidiness for market health. But the lesson of bad regulation is not no regulation. The danger now is overcorrection: waving Sky-ITV through as an act of regulatory penance, allowing domestic cultural value to be absorbed too lightly because of guilt about 2009.
The commercial logic of Sky-ITV is clear enough. Sky has always had a ceiling. Whether the service comes through a dish, a box, a glass screen or a puck, it remains a pay-TV universe. You have to join it. ITV is different. ITV reaches the country before the country has decided to subscribe to anything.
That is what Sky is buying. It is buying a free-to-air relationship with Britain: a Channel 3 licence, mass attention and a place in national habit. If the price looks low, that is because the market is pricing declining broadcast profits. It is not necessarily pricing the public value of a broadcaster that still reaches deep into national life.
ITV’s problem is the other half of the bargain. It has reach, but it needs to earn more from that reach as viewing moves from broadcast signal to connected screen. Sky has spent years building the technology to target households more precisely. ITV brings scale. Sky brings the machine that can monetise it.
That gives the regulator a strong hand. Sky needs the very thing the public interest needs protected. It needs ITV’s mass audience and its free-to-air place in British life. So the question is not whether the regulator should punish Sky for wanting scale. It is whether that scale can be made to serve British viewers and British cultural life.
What is promoted first when viewers open an app? What gets the best window?
This is where the scrutiny should fall. Sky can promise that ITV remains free to air, and that promise matters. But the harder question is what happens around the promise. What is promoted first when viewers open an app? What gets the best window? What sits behind a bundle, a registration wall or a pay offer? What gets commissioned because it serves British viewers, and what gets commissioned because it fits a larger global content machine?
Public service broadcasting can survive on paper while being weakened in behaviour. A channel can meet its licence obligations and still become less central to national life. Coronation Street can remain free to air, but the argument is bigger than Corrie. It is about whether ITV drama, entertainment, factual programming and regional news continue to be funded and surfaced as part of a living British broadcaster, or become the regulated front door to someone else’s platform strategy. Already, London television’s C-suite WhatsApp groups are alive with speculation about who will run what after the deal, a piece of industry gossip that should make regulators more curious, not less, about where ITV’s cultural authority will sit.
That is why the domestic content question matters. Netflix, because it is a very smart business, learned this. It did not build real weight in Britain simply by importing American shows, windowing global English-language content, or relying on occasional curiosity hits from elsewhere. It had to Anglicise. Adolescence, Baby Reindeer and At Home with the Furys worked because they were rooted in British voices, British celebrity, British anxieties, British humour and British social texture. When those programmes travelled, they travelled because of that specificity, not in spite of it.
That should be the regulator’s purpose: not to preserve ITV in aspic, but to allow a British-facing business to gain the scale it needs while making sure that scale serves the very audience who gave ITV its value in the first place.
Regulators cannot make good what was lost in 2009. Britain will never get back the chance to build a shared public service streaming platform before Netflix and YouTube became giants of the attention economy. That moment has gone.
But they can avoid compounding the error.
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