ITV is considering selling a stake in its production business to raise cash after failing to win support from shareholders for a rights issue.

The move to find a strategic investor in the business that makes Coronation Street and Emmerdale is one of several radical steps being weighed up by the broadcaster as the outlook for advertising this year darkens.

The company has resisted calls to split production from its broadcasting division but now that it faces a possible cash squeeze and is sitting on debt of £730m, selling a stake is seen as a compromise. The division’s earnings were flat last year at £90m on sales up 10% at £622m. ITV could raise £500m by selling a 50% stake.

ITV’s largest shareholder BSkyB, 39.1% owned by News Corporation, parent of The Sunday Times, may be interested. It has made no secret of its desire to increase its production capability.

Fremantle Media, maker of the The Bill, and Big Brother producer Endemol are also keen to scale up.

Meanwhile, Sky is understood to have discussed options with ITV to develop new subscription revenues. ITV could switch some of its channels from Freeview to pay-only platforms.

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