Just a week after spin-off plan, Comcast says it will buy British broadcaster

By Steve Goldstein

Comcast to pay $1.6 billion in cash upfront as well as contribute a studio arm to ITV

ITV is selling its broadcast unit to Comcast's Sky.

Just a week after Comcast announced a plan to spin off NBCUniversal, the Philadelphia media-and-broadband conglomerate said it's buying a British broadcaster.

Comcast's (CMCSA) Sky division says it will pay GBP1.2 billion ($1.6 billion) in cash and up to GBP200 million more, depending on advertising performance, to ITV in return for the U.K. company's media and entertainment business, which comprises its free-to-air television, pay TV and streaming unit.

Sky also will contribute its Love Productions division, the maker of the "Great British Bake Off," at a valuation of GBP200 million.

The two sides had first said they were in talks on a deal back in November. At the time, they said the potential consideration was GBP1.6 billion, but had not detailed the composition of the transaction, including the contingent cash and the inclusion of Sky's studio arm.

ITV (UK:ITV) will retain its studios arm, the maker of shows including "Love Island" and "I'm a Celebrity ... Get Me Out of Here!" ITV said the studio arm will have an attractive financial profile with above-market profitable organic revenue growth, margins in the 13% to 15% range and strong cash generation.

Sky said ITV will remain a public service broadcaster. The media and entertainment's total advertising revenue was expected to rise 8% in the second quarter with a "strong" July anticipated.

Last year, ITV's media and entertainment arm saw revenue fall 5%.

-Steve Goldstein

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