EXCLUSIVE: The heat is rising in The Great British Bake Off tent — and not because it’s been the hottest summer on record in the UK.
In an explosive legal battle, Letty Kavanagh, former managing director of Bake Off producer Love Productions, is suing for wrongful dismissal and unpaid severance in two separate courts. Sky has now hit back, accusing Kavanagh of false accounting and misusing a company credit card. Kavanagh strongly denied the allegations and accused Sky of a “smear campaign.”
Deadline first revealed the row last month and, over the weekend, published a detailed report about the dispute, which exposes long-rumbling tensions between Love and its parent company Sky over Bake Off, one of the UK’s most successful unscripted series.
Kavanagh accuses Comcast-owned Sky of a conflict of interest in its attempts to poach Bake Off from Channel 4, as well as inaccurate financial reporting and sex discrimination. Kavanagh further claims she is owed £755,752 ($1 million) in severance payments.
Sky has now served Kavanagh with its defense in relation to the severance payment issue, which is being contested at the High Court. The broadcaster alleged that Kavanagh is not entitled to her $1 million golden goodbye because she breached her contract by “deliberately” changing Love’s accounts and claiming “inappropriate” personal expenses, including boat trip charters.
In its 34-page defense, Sky alleged that under Kavanagh’s instruction, Love “double-counted” production costs as overheads and costs of production in monthly accounts from June to September 2025. Sky said this “artificially” increased Love’s costs and decreased the company’s profits.
Sky alleged that the accounting took place on Kavanagh’s “express instructions,” despite her being “questioned” by Love and Sky’s finance team. Sky claimed that Love’s finance team requested that the accounts be “corrected” after Kavanagh was put on garden leave in November 2025.
Sky carried out an internal review of the accounting matters, which concluded last month that Kavanagh’s alleged actions amounted to gross misconduct. Kavanagh insists she was fired for blowing the whistle on improper conduct by Sky.
A source close to Kavanagh denied the “double counting” allegation in the “strongest possible terms,” claiming it was the result of accounting changes imposed upon Love. This person slammed Sky’s internal review as a “self-serving exercise.”
“Sky are fully aware that the ‘double counting’ they are referring to was as a result of the chaos imposed by Sky from 2023 of improperly recouping corporate overheads in advance of filming whilst understating legitimate overheads,” the source added.
Kavanagh originally made this allegation in an employment tribunal lawsuit filed alongside her High Court claim. It has been refuted by Sky, which attributes the changes to updated accounting practices introduced in 2023 at Comcast’s request.
Sky’s position is that the Comcast accounting updates were unrelated to its double-counting allegation against Kavanagh. A Sky insider claimed that Kavanagh did not deny counting costs twice when the allegation was raised as part of its internal review.
Sky’s defense filing also accused Kavanagh of using a Love company credit card to pay for personal expenses, including a boat trip charter, taxi fares, and international postal services. Sky stopped short of accusing Kavanagh of dishonesty, but said she acted “in a manner that was inappropriate.”
A source close to Kavanagh said Sky never raised expense issues during her employment or notice period. This person added that the “boat charter” was a human error involving an assistant using the wrong card to book a “small boat” while Kavanagh was on vacation. Kavanagh is said to have offered to pay this back immediately, but was told by Sky’s finance team to wait.
A Sky spokesperson said: “We wholly reject Ms Kavanagh’s claims and are confident in our position. We have taken the concerns she has raised seriously and sought throughout to deal with these matters fairly and appropriately. It is regrettable that this dispute has resulted in legal proceedings. Our defence sets out our position in full and we will now respond to the claims through the legal process.”
A spokesperson for Kavanagh said: “This is a retrospective smear campaign designed to discredit a senior executive who spent over a year blowing the whistle on severe financial mismanagement, structural conflicts of interest, and governance breaches by Sky.
“Letty looks forward to having the truth revealed in court — and shining a light on the ruthless corporate approach Sky/Comcast takes to its shows and the TV industry. This paints a worrying picture for any merger between Sky and ITV. And it is an incredible irony that Sky is looking to buy the broadcaster that exposed corporate cover-ups – in Mr Bates vs the Post Office – while Sky attempts the exact same whitewash of its own management.”
A Sky insider baulked at the idea of a “smear campaign,” arguing that the broadcaster was entitled to defend its position. This person added that the allegations made against Kavanagh relate directly to her claims against Sky and Love Productions.
Sky’s defense filing revealed that, in addition to her salary, Kavanagh earned close to £6 million in earnouts and bonuses after Sky’s takeover of Love in 2014.
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