Media M&A: Is a resurgence in the works for 2025?

The media sector is one of many industries being defined by a swift pace of change, with the worlds of digital media and online content creation growing virtually daily, posing a major challenge to the supremacy of traditional broadcasting and publishing formats.

Despite these wholesale changes and the sector’s rapid digitalisation, the media industry heads toward the end of 2024 amid ongoing uncertainty over dealmaking.

While economic conditions have improved around much of the world during 2024 and there have been indications of heightened dealmaking, this is yet to really translate into a major burst of M&A activity in the sector.

Activity has occurred at a decent level, demonstrating significant resilience in the face of adverse conditions, but figures continue to be impacted by the effects of COVID-19 and the financial downturn of the past two years – which have created headwinds to dealmaking that the sector is yet to fully overcome.

However, a number of trends – both well-established and emerging – indicate that consolidation in the media sector could begin to increase over the coming months, paving the way for the kind of M&A activity that has proven elusive over recent years.

So, which areas have been driving the resilience of media M&A during 2023 and 2024 and which trends could be set to drive a resurgence in activity? But also, what are the headwinds that have been impinging on dealmaking? And what are the potential hurdles that could get in the way of a possible recovery?

Media M&A in 2024

A recent study from BDO broke down the facts and figures behind global media M&A in 2024, revealing that activity in the sector has not seen a significant degree of improvement since 2023.

During the first half of 2024, there were approximately 630 transactions in the global media sector – down slightly from 655 in the same period of 2023 – with a total disclosed deal standing at around $60 billion.

BDO Partner and Global Head of Media and Entertainment Andy Viner writes: “This dip reflects broader hesitations in the market as dealmakers navigate high interest rates, political uncertainty, and valuation gaps.”

According to Viner, persistent high interest rates – continuing during the first half of 2024 – played a “critical role” in shaping the media M&A landscape, forcing dealmakers “to focus more on the potential value creation within each transaction to justify higher costs.”

Furthermore, supply chain issues and high debt costs have each played their part on slowing dealmaking down, while the high number of elections (not just in the UK and US but worldwide) during 2024 is also seen as having contributed to uncertainty and caution among dealmakers.

Striking a slightly more optimistic note, Ciesco Market Intelligence’s Technology & Media Global M&A Update for H1 2024, which monitored activity in the tech-enabled media and marketing sectors, found that there had been a 7 per cent year-on-year improvement in deal volume – with 1,129 transactions during H1 2024.

Ciesco added that deal value was up 63 per cent compared to H1 2023, but this seems to have largely been the result of two mega deals worth more than $10 billion each: Silver Lake’s $13 billion take-private acquisition of Endeavor and Tronic Ventures’ $12.25 billion acquisition of a JBB Advanced Technologies subsidiary.

In the UK, BDO’s report found that there were approximately 50 deals during the first half of the year, putting the sector roughly on course to match 2023’s deal count. The total disclosed deal value, meanwhile, has already outstripped 2023’s total, largely as a result of several large deals – such as RedBird IMI’s £1.2bn takeover of All3Media.

The acquisition of London-based All3Media by US firm RedBird IMI illustrated a key trend in UK media M&A: strong interest from international buyers. According to BDO, the UK media M&A landscape the first half of 2024 saw “a nearly even split between domestic and international buyers, underscoring the UK’s appeal as a global hub for media transactions.” This was further demonstrated by the fact that 12 per cent of the global deal total involved the acquisition of a UK-based target.

Looking at the industry from a sub-sector level, BDO found that – away from the perennially popular advertising and marketing sector, which accounted for 36 per cent of deals – activity was being driven by areas including broadcasting and content (26 per cent of deals) and publishing and media licensing (21 per cent of deals). Away from these areas, there was also significant activity in public relations (10 per cent) and, notably, digital media (7 per cent) which is seeing growing demand.

Looking at the leading buyer types, BDO stated that, while corporate buyers were active, some leading firms were “more reserved in their deal-making". This caution on the part of some corporate buyers was also apparent among private equity firms.

Reflecting a trend that was seen widely across the M&A landscape during the first half of the year (continuing from 2022 and 2023), BDO reported that private equity-backed activity in H1 2024 “was relatively subdued”.

BDO reported that PE-backed buyers accounted for just 10 per cent of deals in H1, with political and economic uncertainty continuing to impact activity.

Private equity involvement in the media sector was largely dominated by the US marketplace, which accounted for 40 per cent of deal volume and more than two-thirds of deal value, while 12 per cent of deal volume involved UK targets.

According to Ciesco’s report, private equity activity accounted for 30 per cent of activity in H1 2024, a year-on-year decline of 12 per cent, with corporate buyers accounting for the majority of transactions.

Additionally, the report found that just over a quarter of all deals with a disclosed deal value (26 per cent) involved mid-market companies. According to BDO, mid-market deals “reflected broader trends in the global M&A market, showcasing the ongoing appeal of traditional media formats while simultaneously highlighting the increasing importance of digital platforms, mobile advertising, and data analytics.”

The concentration of activity on the US and UK was also cited by Ciesco, which found that they represented 49 per cent of all global activity in the first half of the year. Interestingly Ciesco also found that US and UK buyers were particularly active in the Middle East.

The Middle East region recorded 22 transactions during H1 2024, outstripping its full year total from 2023, with Ciesco reporting that the majority of deals were cross-border acquisitions involving buyers from the USA, UK and India.

Finally, PwC’s mid-year UK M&A report, which tracks eight key sectors, found that the wider technology, media and telecoms (TMT) sector contributed 376 deals (the third highest of any sector), as well as the third highest deal value with £11 billion.

Headwinds to activity

While the media sector is far from the worst affected by the economic and geopolitical upheaval of recent years, there seems to be little doubt that activity has been depressed by a multitude of factors.

As outlined by BDO, high inflation and interest rates and soaring borrowing costs have sharply increased the cost of capital. This has discouraged leveraged buyouts and other acquisition models that rely heavily on debt – potentially providing some explanation for slow activity among corporate and private equity buyers.

Even now that the worst of the recent economic upheaval still seems to have passed, significant concerns remain. Despite cutting interest rates, the Bank of England has not moved as quickly as some expected earlier in the year and it has warned that inflation could increase sharply next year.

Consumers are continuing to be hit by the cost-of-living crisis, impacting media company revenues, and many traditional buyers will still be cautious about investing in M&A deals, with any potential economic recovery clearly still at a very early stage.

Valuation gaps were another major hurdle cited by BDO, with cautiousness among buyers meaning that they are often unwilling to meet the kinds of high valuations that owners have placed on their businesses.

This is an issue that has impacted media companies going to market globally, with a recent Adweek report highlighting the case of Freightwaves – a US publishing and media business that sought to divest its data business earlier this year.

The business had been valued at $286 million in 2021 – roughly a 20x multiple of its earnings at the time – and Freightwaves expected to attract a similar multiple this time around, especially given it had doubled the size of its business since the previous valuation. Instead, it received offers at a multiple of 10x earnings, causing it to pause its sale process.

Clearly, there is a strong degree of caution among buyers that is impacting how they value potential acquisitions. Another issue that is potentially exacerbating this is the rapid digital transformation being seen in many areas of the media sector (for example, AI and automation), which is leading high-growth digital media firms to seek extremely high valuations that buyers are unwilling to meet.

Finally, geopolitical and regulatory issues continue to make dealmaking more complicated. Geopolitical challenges such as the war in Ukraine, the ongoing effects of crises such as Brexit and an increasingly strict regulatory environment still play a part in making investors more cautious.

Meanwhile, activity during the first half of the year will also have been impacted to some degree by the uncertainty ahead of key elections in the UK and US. While these have now passed, the results and aftermath of both polls could still generate further trepidation among dealmakers.

Areas driving deals

Traditional formats seek to adapt
Given the fact that so much of the media we consume these days is digital – whether that’s video or written content – it should stand to reason that traditional media formats would be a less notable feature of the M&A landscape and that buyers would largely be focusing their spending on digital-led assets.

However, according to BDO, traditional formats such as broadcasting and publishing were among the most-active sectors within the media M&A market, especially in Europe and the United States.

Looking at global M&A activity over the first half of 2024, BDO reported that broadcasting and content was the most active sub-sector, accounting for 26 per cent of activity, with publishing following a close second at 23 per cent.

According to the report, the high levels of activity seen in these traditional sub-sectors highlight the ways in which they are using M&A activity to adapt to an increasingly digital world, with traditional broadcasters aiming to expand their content libraries to keep pace with digital networks and publishers seeking to bolster their digital capabilities in order to compete with digital content providers and self-publishing firms.

Broadcasting and publishing were the two most active sub-sectors in the UK behind advertising during the first half of the year and there has been significant activity at the higher end of the market. Redbird IMI’s takeover of All3Media, mentioned earlier, is perhaps the biggest confirmed deal so far, but the potential breakup of broadcasting giant ITV could see some even more notable transactions over the coming months.

In publishing, a particular trend has been for deals focusing on bolstering niche capabilities such as academic operations, with buyers also seeking to strengthen their digital offerings and geographic presence.

A notable deal reflecting these trends was Bloomsbury Publishing UK’s May 2024 takeover of Massachusetts-based independent academic publisher Rowman & Littlefield, in a deal Bloomsbury said was its biggest takeover to date.

Discussing the acquisition, Bloomsbury CEO Nigel Newton described it as “a game-changer" for the company and “a key milestone in our long-term growth strategy.”

Newton commented: “Rowman & Littlefield is one of the few independent US academic publishers of such scale and it’s great that our discussions with [Rowman & Littlefield president and CEO] Jed Lyons have led to this acquisition.”

“Their 40,000 academic titles added to ours will make us a significant US academic publisher, growing Bloomsbury’s academic and digital publishing presence in North America, [and] opening new markets and publishing areas to Bloomsbury.”

There has also been a significant degree of M&A activity focusing on some of the UK’s leading news and magazine publications – and, perhaps predictably, these transactions have been subject to fierce debate and serious opposition.

In September, hedge fund boss and GB News co-owner Paul Marshall controversially acquired weekly conservative magazine The Spectator in a £100 million deal that an unnamed Conservative MP called “terrifying” - citing Marshall’s “Trumpism - and which prompted chair Andrew Neil to resign with immediate effect.

There has also been a protracted sale process involving Conservative daily The Telegraph, which has seen a significant number of high-profile bidders emerge and back out since the paper was seized by Lloyds Banking Group in early 2023 due to unpaid debts owed by former owners the Barclay family.

Later in 2023, the government blocked a takeover by RedBird IMI, with a new buyer yet to be found. In October 2024, Dovid Efune, the publisher behind The New York Sun, appeared to have won the battle after entering a period of exclusivity over a deal to acquire the paper for £550 million.

However, this too has been fraught with difficulties, with Efune’s potential takeover reportedly not well-received by Telegraph staff concerned about his social media posts about conflicts in the Middle East.

At the end of November, further uncertainty was cast on the deal, with the news that Efune had been handed an extension to the period of exclusivity, amid reports that he was struggling to gather funding for the deal.

The Observer, The Guardian’s Sunday sister paper, has also been involved in discussions over a disputed deal, with The Guardian reportedly seeking to offload the paper to loss-making start-up Tortoise Media.

The proposed sale has been met with widespread disquiet among Guardian staff and press groups, with the National Union of Journalists (NUJ) calling it a “betrayal” and saying staff would stage a 48-hour walkout in protest. Six former Guardian editors, meanwhile, including long-time editor Alan Rusbridger, have also voiced opposition to the deal.

The scale of these potential deals, as well as the obvious depth of feeling surrounding them, illustrate not only the continuing high value of these historic publications as assets (for both buyers and sellers), but also the concerns surrounding the future of print publications in an increasingly digital world and the role that M&A may play in helping them to adapt.

Busy inbound dealmaking could yet increase
One of BDO’s key findings in relation to media M&A activity in the UK was the roughly even split between activity engaged in by domestic and international buyers – which they said underscored “the UK’s appeal as a global hub for media transactions.”

According to the report, 12 per cent of acquisitions during the first half of 2024 involved a UK-based target, with BDO citing a strong mix of domestic and international buyers in sub-sectors including broadcasting and content and publishing and media licensing.

Strong international interest in UK media businesses is in line with a broader trend of overseas buyers targeting UK assets over recent years. This has occurred in spite of the UK’s economic struggles and the numerous M&A headwinds prevalent since 2022.

A recent LSEG Deals Intelligence report found that, across all sectors, the UK has been the third most-targeted country in the world for M&A activity so far this year, behind only the United States and China.

According to LSEG, M&A deals involving a UK-based target accounted for 6 per cent of the global dealmaking total in the first nine months of 2024, up from 4 per cent in 2023. 72 per cent of these deals involved an overseas buyer – the highest share in three years.

With BDO finding that 12 per cent of media deals involved a UK target, it would appear that the sector has remained a particularly popular one among both domestic and international buyers, despite tricky M&A conditions.
Discussing the prospects for continuing inbound activity targeting UK companies, LSEG Senior Manager Lucille Jones said that the July general election will have removed a significant degree of political uncertainty and helped to deliver more clarity and confidence to buyers.

Jones added: “This, coupled with the expectation of a further rate cut before the end of the year, bodes well for dealmaker appetites, and may encourage more companies off the sidelines to pursue acquisitions.”

While positive sentiment regarding the UK’s new government and economic health may have tempered since then – particularly in the wake of the Autumn Budget – there still remains a general consensus that the UK is in a more stable place, politically and economically, than it has been for the past few years.

As a result, it seems likely that strong cross-border activity in the UK media sector will continue, if not increase, over the coming months and years. This will prove even more likely in the case that, as expected, private equity buyers begin to increase their activity.

Private equity buyers should return
Amid ongoing economic and political uncertainty, private equity activity in the media sector was slow during the first half of the year – with much activity defined by corporate buyers and mid-market strategic acquisitions.

However, this is something that should begin to change over the coming months and this would arguably represent the main driving force behind a potential surge in media M&A activity during the remainder of 2024 and into 2025.

This is especially true given: a) the huge amount of unspent capital currently held by private equity firms (BDO estimates that private equity dry powder stood at more than US$ 3 trillion during the first half of 2024) b) the rapid pace of digital advancement in the media sector, particularly with trends such as automation and AI, and c) the trend of consolidation that is apparent in areas such as publishing, traditional broadcasting, digital media and content creation.

Looking at the M&A market more broadly, a recovery in private equity dealmaking has long been forecast and finally appears to be taking shape. A recent Deutsche Numis study demonstrated a major increase in confidence among UK private equity firms this year, as well as significant optimism that PE activity will increase during 2025.

81 per cent of UK private equity professionals polled in the report stated that the UK was “more attractive” or “significantly more attractive” for investment than other geographic areas, while 84 per cent said they expected to execute M&A deals in the high single digits or more during 2025.

Another private equity trend highlighted in the report was a growing interest in bigger deals, demonstrating a higher degree of confidence among private equity buyers following a significant period in which activity has been dominated by smaller bolt-on transactions.

Deutsche Numis found that 20 per cent expected to complete “transformational” deals during 2025, while 49 per cent said that they expected to target “sizeable” bolt-on deals, in contrast to the smaller deals that have prevailed in recent years.

Deutsche Numis’ co-head of UK M&A Oliver Ives stated: “We are seeing increased ambition from private equity going into 2025, with the majority expecting to execute on at least 5-10 deals next year. This is reinforced with respect to existing portfolio companies, where sponsors anticipate engaging in larger transactions after a period of primarily ‘housekeeping’ bolt-on deals.”

This trend is arguably already being seen in the UK media sector, with BDO citing Intermediate Capital Group’s $850 million (approx. £667 billion) acquisition of a significant stake in Law Business Research in May 2024 as one of the major deals in the publishing and media licensing sub-sector.

However, an even more significant private equity deal is seemingly in the offing, with The Times reporting recently that a number of private equity suitors – including Cinven and Triton Partners – have submitted bids to acquire TV ratings data giant Kantar Media in a deal that could be worth up to £1 billion.

Should such a major transaction as the Kantar acquisition go through, it would arguably deliver a clear indication that private equity confidence in the media sector has fully returned and that the recovery in PE dealmaking is underway.

Evolving digital landscape attracting buyers
While traditional media formats have shown a, perhaps, surprising degree of resilience in terms of M&A activity, there is no denying that much dealmaking in the media sector is driven by trends relating to technology and digital media.

According to BDO, digital media accounted for 7 per cent of the UK’s dealmaking total during the first half of the year, with the report stating that acquisitions such as online media monitoring service provider Signal Media’s takeover of reputation intelligence monitoring company Social360 demonstrated “a growing demand for technology-driven media monitoring solutions, as companies seek more sophisticated tools to track and manage their reputations in an increasingly digital world.”

Elsewhere, as mentioned above, a significant degree of activity in traditional areas such as publishing and broadcasting was driven by a need for operators to improve their resilience and competitiveness amidst the emergence and growth of digital and technology-led rivals.

Another notable trend has been the growing interest that corporate buyers and investors are taking in digital content creators – more specifically YouTube channels.

This has emerged as a particularly pronounced trend in the world of car news channels, with acquisitions including the 2021 takeover of the Donut Media channel by private equity firm Recurrent Ventures and the 2023 acquisition of Car Throttle by industry news site Crash Media Group.

In August 2024, one of the biggest deals yet in this vein was completed with the acquisition of The F1 Word YouTube channel by sports broadcaster Planet Sport. The acquisition, via Planet Sport subsidiary PlanetF1.com, saw The F1 Word creator Sean Cullingford join the company as Head of YouTube.

Commenting on the deal, Planet Sport Editor Mark Scott said: “Sean’s vast knowledge, experience and incredibly high standards makes him the perfect fit for our operation and this acquisition represents a big step in our video production ambitions.”

“There is a lot of excitement and buzz around F1 again with a thrilling title battle in play, Lewis Hamilton’s upcoming move to Ferrari on the horizon and what promises to be an ultra-competitive F1 2025 season to come.”

“As an FIA-accredited publication, the addition of a very well-established video outlet will allow us to strengthen our commitment in bringing the passionate F1 fanbase closer to the sport through our on-the-ground reporting and wide variety of analytical features.”

As people continue to consume a growing amount of their daily media via the internet and mobile phone apps, it seems virtually guaranteed that deals like this will become increasingly commonplace, both as digital-led media businesses become more powerful market operators and as traditional media incumbents seek to keep pace with the digital revolution.

Threat of future headwinds still lingers

Despite the numerous reasons to be optimistic about a full-on revival in media M&A, there are still a considerable number of challenges facing dealmaking. Perhaps most imminently, the tempering of positive sentiment regarding the UK’s economic and political stability that was prevalent during the first half of the year and in the wake of the general election.

The Autumn Budget arguably delivered a sobering dose of economic reality for many, while the controversial decision to increase Capital Gains Tax may have a direct negative impact on the number of business owners considering going to market across a wide array of sectors – including media.

Concurrently, the Bank of England has sought to temper optimism regarding economic policy. Despite cutting interest rates twice this year, the central bank has perhaps kept them higher than expected at 4.75 per cent. Furthermore, it has warned that inflation could be on the rise again in 2025.

All of these factors will serve to heighten uncertainty among dealmakers and perhaps renew the caution that many have felt over deploying capital into M&A deals over the past few years. This caution has been highlighted through trends such as resilient private equity interest in “safe haven” sectors such as building products, in comparison to sluggish investment in the kind of high-growth sectors they might typically target.

Something else that may make buyers more hesitant about pursuing deals in the media sector is heightened regulation and increased scrutiny of M&A activity. This was demonstrated recently with Daily Mail owner Lord Rothermere’s announcement that he would withdraw from the bidding to acquire The Telegraph.

Discussing the decision, Rothermere stated that his group Daily Mail General Trust (DMGT) feared it would be dragged into a long, complex competition enquiry were it to pursue a deal, saying that DMGT “cannot justify the required investment given the changing legal and regulatory backdrop.”

Rothermere commented: “We believe the new statutory regime governing the ownership of UK newspapers is overly restrictive and could curtail our ability to raise capital for our news publishing and other media businesses — both now and in the future.”

“With a new government in place, we would face a heightened risk of a protracted regulatory process if we were to win the auction. This would cast further uncertainty over TMG and could disrupt our plan to grow DMGT’s diverse stable of news titles.”

More recently, the government has stated that media merger laws would be “modernised” - i.e. tightened – further still. Culture Secretary Lisa Nandy announced plans in November 2024 to broaden the scope of the mergers regime government the UK media sector, “updating it for the digital age to reflect modern news consumption habits and better protect media freedom and plurality.”

The plans would enable greater scrutiny of deals involving the acquisition of UK online news publications and news magazines “that might adversely impact accurate reporting, freedom of expression and media plurality”.

Such increased regulation would likely stymie the flurry of activity that is currently ongoing around UK news publications and online news sites – indeed, concerns over new regulation ahead of the general election may provide some explanation as to why activity has been so busy.

Finally, there remains the persistent issue of valuation gaps between buyers and sellers throughout the media sector. With economic headwinds still prevalent, many buyers will simply be unwilling or unable to come close to the kinds of valuations that media company owners may be putting on their businesses.

In a recent Adweek report, Paul Miller – CEO of information and events firm Questex – discussed the sector’s valuation gap issue in the wake of Questex’s 2023 sale process. Last year, the $100 million revenue company went to market seeking a multiple of between 12-13x earnings, but instead received offers in the 9.5-10x range.
According to Miller, media company owners expecting to get the kinds of valuations that firms were attracting even in 2022 are likely to be disappointed, adding that “it will be a bitter pill to swallow for sellers to accept lower multiples.”

Miller continued: “It doesn’t mean that all businesses are going to have to discount their value. But there needs to be a realistic ownership view of how each business compares to the very best.”

Conclusion – Prevailing trends still positive

Despite the significant challenges that remain, sentiment surrounding the future of M&A activity in the media sector remains hugely positive. In their reports, BDO and Ciesco both state that they feel that positive trends and dynamics emerging in the sector will continue during the remainder of 2024 and drive an acceleration in activity.

The pace of change within the sector is rapid, primarily driven by technological advancements and the ongoing rise of digital media. As a result, there are newer major companies that are driving these changes and emerging as a powerful buyer class, as well as a host of incumbent market stalwarts that are increasingly using M&A to keep pace.

Furthermore, with economic uncertainty easing somewhat and investors under growing pressure to deploy unspent capital, private equity buyers should return to the market in a significant way during 2025 – something that will represent a major boost to dealmaking as PE firms make acquisitions and seek to finance buy-and-build strategies in areas of the market undergoing rapid consolidation.

Overall, with the media sector having weathered the past two years relatively well from an M&A standpoint, virtually all of the current indicators suggest that the conditions are in place for a significant resurgence in media dealmaking during 2025.

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