ITV Cutting $40M From Media & Entertainment Budget Due To Weak Advertising Market

With “weaker demand for advertising” in Q4, ITV has identified £30M ($40M) worth of cost savings from its networks division, which will soon be sold to Sky.

Total Advertising Revenue is set to drop 5-10% in Q4 and 2-3% for full year 2026, ITV said today in its Q3 trading update. The network is therefore finding savings from its Media & Entertainment biz, which houses the ITV network and streamer ITVX, “to align our costs with advertiser demand.”

ITV said £25M will come from content savings and another £5M from “discretionary non-content savings,” with the total content budget for 2026 now expected to be around £1.2B.

ITV boss Carolyn McCall put the sticky ad market down to “continuing broader macroeconomic uncertainty, increased digital advertising on global streaming platforms and the impact of Less Healthy Food regulations, which came into effect on 1 October 2025.”

ITV revealed a similar saving target last year due to a “softening economy” in the UK.

The news comes as Comcast-owned Sky pushes on with its £1.6B acquisition of ITV, although as revealed last week the UK Culture Secretary has now officially tasked two UK regulators with probing the deal.

The Love Island network is bullish that it will make it through the probe unscathed. “This is an expected and important milestone in the regulatory review process, and we are pleased that it is moving at pace,” said McCall. “We continue to expect completion in the second half of 2027.”

The news was revealed today in ITV’s Q3 results, which showed total revenue of £2.7B, almost flat with the same figure for the first nine months of 2025.

Media & Entertainment revenue was also virtually flat at £1.4B, with digital revenue helping offset the advertising declines. Producer-distributor ITV Studios, which is not being sold to Sky, also posted stable revenue of around £1.3B.

Within ITV Studios, ITV said revenue, margin and profit are “heavily weighted to Q4,” pointing to a “strong pipeline of deliveries” like Netflix Italy’s SuburraMaxima, Peacock’s Love Island US: Beyond the Villa and the seventh season of Line of Duty for the BBC, alongside “significant high-margin licensing deals” in the global partnerships division. McCall said the sale of ITV network to Sky will “position ITV Studios as a highly attractive, pure play, global content business.”

As previously guided, ITV Studios’ EBITA margin will be at the lower end of the 13% to 15% range, reflecting the revenue mix in the year, ITV said.

Elsewhere, streaming hours to ITVX shot up by 29% to more than 2 billion minutes viewed.

“Despite a more challenging market, we remain on track to deliver good revenue growth in ITV Studios and continued profitable digital revenue growth in Media & Entertainment (M&E) over the full year,” said McCall. “While the outlook for advertising remains muted, we are firmly focused on self help and mitigating actions, while continuing to execute our strategic priorities to drive performance across both businesses.”