While Sky’s proposed £1.6 billion takeover of ITV’s media and entertainment business reportedly hits some bumps in the road, the overall M&A landscape for media and marketing in the UK looks smoother this year than in 2025.
According to Moore Kingston Smith (MKS), a multi-disciplinary advisory, tax and audit firm that tracks deals in the media and marketing industries, deal volumes are expected to steadily improve in 2026. However, macroeconomic uncertainty continues to slow down M&A activity, as the media and marketing sector experiences more cautious, selective market conditions.
The forecast comes off the back of a slow 2025 for M&A. MKS recorded a total of 301 UK deals last year, down 23 percent on the 393 tracked in 2024, making it the slowest year for activity since the pandemic. Q4 was hit particularly hard, according to the research, with just 57 transactions completing during the quarter. The firm cited the late Budget as a cause for uncertainty in the sector, but noted that “acquirers and sellers who were in a wait-and-see mode can now plan for transactions with more confidence.”
“This pattern shows buyers and sellers adopting a more risk-aware stance,” Paul Winterflood, Corporate Finance Partner at MKS, tells VideoWeek. “Slower economic growth, uncertainty around UK fiscal policy, and stretched valuations have encouraged many sellers to hold off, while buyers are increasingly focused on strategic, capability-driven deals rather than volume.”
Sports deals pick up pace
Although overall deal volume was down, the advisory reports that there was demand for certain capabilities last year, with marketing services showing relative resilience. Performance and media buying capabilities, as well as PR services, have remained high on acquirer target lists, driven by interest in data, analytics and AI, alongside social and influencer capabilities.
The demand for media buying agencies is driven by the pressure to prove ROI and an increasingly complex media mix, according to Winterflood. “First, brands are demanding clear ROI and measurable outcomes, which benefits agencies that can credibly link spend to performance, especially as budgets keep shifting toward digital-first and social-heavy mixes,” he says. “Second, fragmentation across channels (CTV, programmatic, retail media, paid social etc.) is pushing buyers to acquire planning and activation breadth and measurement sophistication, rather than trying to build it all organically.”
These trends are expected to continue in 2026, as AI-enabled performance capabilities gain prominence in an increasingly data-driven ad market. Winterflood notes that buyers are seeking agencies “that can demonstrate measurable, attributable outcomes and integrate first-party and behavioural data.”
At the same time, social, influencer and creator-led agencies are continuing to gain traction, owing to the convergence of commerce and social media. “Sector specialists, notably in healthcare, tech, ESG and sport, and experiential agencies benefiting from renewed appetite for live events, also featured prominently in 2024 activity,” adds Winterflood.
Sport is becoming especially valuable amid fragmented consumer patterns and the rise of AI-generated content, according to MKS. While audiences continue to decline on linear TV, sports viewing remains relatively consistent, which in turn makes rights and production economics more favourable. But rights holders have also faced declining fees in Europe (as demonstrated by the Ligue 1 and DAZN fallout last year), and are pursuing new distribution formats, such as creator and social partnerships, in efforts to boost attention and consumption levels.
And last year saw a renewed push into sports from the global agency holding companies, with Publicis acquiring sports-centric agency Adopt in April, as well as Bespoke Sports & Entertainment in July. French agency group Havas also acquired Spanish sports marketing agency CA Sports back in January. Meanwhile on the media side, UK entertainment company Global announced last month that it has acquired a majority stake in The Overlap, a sports media group founded by Gary Neville.
Havas and Publicis turn up the volume
Overall the holding companies completed more acquisitions in 2025 than the previous year, with a combined total 21 deals, compared to 16 in 2024. This activity was driven almost entirely by Havas (11 deals) and Publicis (8 deals), though Omnicom’s year was taken up by its $13.5 billion takeover of rival holdco IPG. MKS expects to see further M&A activity now that deal has concluded, as Omnicom looks to rationalise its interests, either through consolidation or strategic divestment. The firm also forecasts further consolidation between the holdcos, with question marks over the M&A strategies at WPP and Dentsu, which last week dropped the sale of its international unit but reportedly remains open to divesting certain businesses at the local level.
“Holdcos have been selective rather than volume-led,” comments Winterflood. “One theme has been portfolio optimisation and carve-outs, as larger groups try to simplify and refocus, alongside targeted buys in areas like data, commerce and influencer.” Publicis acquired three influencer marketing companies last year, namely BR Media Group, Captiv8 and HEPMIL Media Group.
Winterflood notes that agencies struggled to grow fee income ahead of inflation last year, while also increasing wages in order to retain talent. This had the effect of squeezing margins and delaying exits for some founders as their profits dipped. But those with stronger performance, AI and influencer capabilities saw higher demand, and therefore better pricing power and resilience. “That’s creating a widening gap between ‘must-have’ capabilities and more commoditised offerings,” explains Winterflood.
In this environment, specialist independent agencies with key points of differentiation and demonstrable demand have a “clear advantage” in the face of buyer caution. UK indie Total Media rebranded as Mediaplus UK last year, following its acquisition by German network Mediaplus, having previously worked together to create complementary offerings that the companies now bring to a wider market.
Reshaping the UK TV ad market
On the media front, the UK has seen volatility in the film, TV and entertainment sectors, due to commissioning softness making conditions tougher for some producers. Meanwhile negotiations over Sky’s acquisition of ITV’s media and entertainment business have reportedly slowed in recent weeks, but reports suggest ITV remains hopeful in reaching an agreement.
While the deal would inevitably attract regulatory scrutiny, since combining two of the UK’s largest commercial broadcasters would significantly reshape the domestic TV ad market, Winterflood observes that market conditions are changing in the deal’s favour. “What makes it more likely is the strategic pressure on traditional broadcast economics (weaker ad markets, viewing shifts, streaming competition) and the logic of building greater scale around distribution and advertising,” he comments.
Overall MKS forecasts an improving environment for would-be sellers and acquirers in the UK this year. Falling inflation and increased rates of business asset disposal relief, to apply from April 2026, are expected to encourage business owners to complete transactions during the current quarter, according to the advisory.
“We expect steady and improving deal volumes, not a surge, driven by better alignment on pricing and capital availability, but still with macro uncertainty slowing processes,” says Winterflood. “Ultimately the ‘best-performing’ businesses will continue to attract strong interest.”
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