U.K. TV giant ITV, led by CEO Carolyn McCall, provided a first-quarter 2026 trading update early in the morning, along with an update on a potential big transaction.

“Following our announcement in November 2025, we remain in active discussions with Sky regarding a possible sale of the media & entertainment (M&E) business,” the company said. “We will update the market in due course.” The M&E business includes ITV’s commercial free-to-air TV channels in the U.K., as well as its ITVX streaming platform. After a potential deal, ITV Studios would continue as a standalone company.

ITV Studios revenue rose 4 percent in the first quarter, while M&E revenue fell 2 percent, with total advertising revenue (TAR) down 1.5 percent, ITV reported on Thursday.

In its guidance earlier this year, ITV had said ITV Studios was “on track for another year of good growth in total revenue in 2026, ahead of the market, driven by external revenue.” But it also highlighted that revenue, margins and profits would be “weighted to the second half [of the year], due to the phasing of scripted deliveries and timing of high-margin licensing deals.”

On Thursday, the firm highlighted that the first-quarter gain was “driven by strong external revenue growth up  8 percent, primarily reflecting the phasing of deliveries to global streaming platforms, including Skyscraper Live for Netflix, Rivals season 2 for Disney+, and Love Island U.S.: Beyond the Villa season 2 for Peacock. Internal revenue declined by 7 percent, as expected, due to the lower volume of soaps and daytime content following the previously announced strategic scheduling and production changes.”

In its Thursday ad outlook, ITV noted: “We expect TAR to be up around 10 percent in the second quarter and a strong July, driven by significant demand from advertisers around the men’s [soccer] World Cup. 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.”

ITV also provided additional figures for its M&E performance in the first quarter, noting that 12 percent growth in digital revenue “largely” offset the decline in linear advertising revenue. Digital advertising revenue grew 14 percent, “supported by a record-breaking start to the year for ITVX, with total streaming hours up 13 percent, driven by content such as the drama Gone, Love Island: All Stars and the Six Nations [rugby] championship.” M&E non-advertising revenue dropped 8 percent in the quarter, in line with ITV’s expectations.

Concluded McCall: “Our strategic priorities of expanding ITV Studios and supercharging our digital media & entertainment business continue to deliver clear and positive results.”