Vodafone has finalised its deal to sell its Italian business to Swisscom for €8bn, opting for greater regulatory certainty and higher upfront proceeds rather than a potentially higher offer from Iliad for an Italian JV.

The company has grasped the nettle on the trailed dividend cut, bringing the announcement forward from the expected May timing, and halving the payout.

The company is highlighting how well it is positioned to grow now without Italy and Spain, and with the prospect of a better position in the UK. Germany will be more important than ever in this growth equation.

As guided, ITV’s advertising performance was down 8% year-on-year (£1.8 billion), while Studios performed slightly better than expected (+4%, £2.2 billion): meaning that adjusted EBITA, while challenged (-32%, £489 million) could have been worse given the trials of H1

Unsurprisingly, ITV has announced an acceleration of its cost-cutting measures which intensifies an earlier hiring freeze: costs have risen 19% since before COVID, while revenues are only up 10%

ITVX continues its strong growth, and although we think that this needs to be contextualised, there are unintended but encouraging signs for the broadcaster

Vodafone has confirmed that it is in discussions to sell its Italian business to Swisscom for €8bn having rebuffed a higher offer from Iliad for an Italian JV in December.

The Spanish and Italian deals should be reassuring to investors, are helpful to the growth profile of the company, and may help to reduce any conglomerate discount in the share price.

The all-important free cashflow impact of the deals remains to be seen with potential for buybacks of up to €10bn compensating for the direct dilution of the deals and softening the blow of any dividend downgrade in May.

As viewing moves online, broadcasters’ on-demand players make up a growing proportion of viewing, becoming central to their future strategies.

However, even though SVOD viewing might have begun to plateau, BVOD growth cannot yet balance the decline of linear broadcast.

Of this shrinking pie, 2023 saw most of the major broadcast players increase their viewing shares.

Disney's bottom line results were flattered by a year-long cost cutting drive: the decline in linear entertainment revenue is accelerating and direct-to-consumer subscriber growth has temporarily stalled.

A new sports JV with Warner Bros. Discovery and Fox, along with other announcements are designed to grab attention in midst of turbulent shareholder rebellion.  Disney also—at last—unveiled a new games initiative with a $1.5 billion equity stake in Epic Games and a major immersive universe to attract younger audiences.

Disney's approach to the licensing of content to third parties is nuanced and so will be its effect on the perception of Disney+'s exclusivity.

Germany’s RTL+ streaming platform has been revamped into an 'all-in-one' bundle of content including premium sports, music and audiobooks.

RTL wants to leverage its FTA reach to build an online subscription base large enough to influence the future shape of German TV.

To sustain subscriber growth we argue that RTL will need to release defining content and explore partnerships beyond its current deals with telcos.

Iliad has made an attractive offer for Vodafone Italy, to initially form a joint venture but to ultimately give Iliad the right to buy Vodafone's stake.

Vodafone management may be more keen on a less transformative, but easier, deal with Fastweb, retaining Vodafone's presence in Italy.

Iliad's announcement is likely aimed at highlighting to shareholders and the Vodafone board that a more value-creative deal is on the table, even if management appetite is not there for it just yet.

Metrics in Vodafone's Q3 results pointed in various directions with the main positive being revenue growth in Germany, but there were also concerning data points including continued subscriber decline there, and EBITDA across all of Europe.

The company reiterated its guidance for EBITDA and FCF for the year which looks achievable but a stretch. More importantly, these numbers exist only in theory with the Euro-based results looking set to be lower—with implications for the outlook and dividend cover.

Ridding the Group of its Spanish business, and possibly the Italian one too, will be helpful in delivering on the promise of growth, but whether it creates value for shareholders is another matter.

ITV Studios (+9%, £1.52 billion) continues to prop up the company's advertising business (-7%, £1.23 billion)—which faces macro headwinds—helping external revenues for the first nine months of 2023 slightly upwards to £2.53 billion

Q4 is shaping up as a particularly difficult period for advertising with the lead up to Christmas potentially down by 15% YoY

ITVX continues to show growth; given that this is mostly a result of cannibalising ITV's linear audience, there is a ceiling on its potential

Vodafone has struck a deal to sell its ailing Spanish business in a deal worth €5bn, equivalent to 5.3x EBITDAaL.

While the pragmatism of the move will be applauded, the valuation may be viewed as disappointing by some.

The deal removes an enduring drag on the company’s financials, providing scope for better European trends, but this is one of several challenges facing the company, with the dividend policy question now to the fore.