UK media and TV M&A: key legal risks for buyers and sellers

Unlike M&A in many other sectors of the economy, deals in the TV and media sector are dominated by the intellectual property rights the buyer acquires on completion. Ownership of these assets will determine the extent to which the buyer is able to exploit existing programme formats, development ideas, brands associated with the target company, and distribution rights in the future.

Verification of copyright in programmes and other content, ownership of formats, trademarks and domain names, for example, will play a significant part of due diligence. The very nature of the media industry means these rights are often acquired through a complex chain of development. Numerous freelancers and outside contractors may have been involved in the creation of the asset. This means the seller should be ready to provide complete ownership documentation for all IP and associated assets it intends to sell. If issues arise in due diligence, accurate and prompt assignment of these rights may be required pre-deal to secure legal title in the manner the buyer requires.

Expiration of musical and other rights as well as geographical use restrictions means some IP may be of limited value and the buyer should carefully scrutinise all documentation in light of this. Often it may be necessary to negotiate bespoke warranties and indemnities regarding usage and exploitation of certain IP rights.

The process of IP due diligence ensures the buyer can make an informed decision about the purchase. Gaps in ownership documentation, restrictions on usage and other risks identified during due diligence can reduce the value of the target entity considerably and, in some instances, jeopardise the deal entirely.

The TV and media sector in the UK is tightly regulated with independent regulator Ofcom performing an oversight role over TV and radio broadcasters. Companies licensed by Ofcom must adhere to strict content standards covering accuracy, impartiality, and harm. Anyone seeking to acquire a company with an Ofcom licence and become a licensee must satisfy the regulator that they are ‘fit and proper’ to do so.

The regulator will assess the honesty, integrity, and regulatory compliance of the broadcaster and any controlling individuals before agreeing to the transfer of a licence. In making its decision it’s likely that Ofcom will examine the buyer’s legal structure, how its governed and – crucially – any other media interests it has.

Buyers of media companies should be aware that Ofcom has powers not just over the BBC and major commercial channels but also over smaller operators and other platforms. Its remit extends to video-on-demand services, online services, social media channels and, to a degree, search engines.

If the target company holds an Ofcom license, buyers must clarify whether regulatory notification or approval is required. Buyers should also obtain details of the target company’s compliance history, including details of any Ofcom Code breaches or sanctions.

Where the target entity is a news provider, additional regulations apply. Since 2025 the government has had additional powers to intervene in mergers of online news publications on public interest grounds and to ensure diverse viewpoints are heard. The Secretary of State is also now equipped with stronger oversight powers where foreign state-owned entitles seek control of UK news publications.

Advertising rules apply to as well.   With all of this in mind, parties involved in the transaction should factor in the possibility of regulatory intervention, approval and notification requirements and adjust the deal timetable accordingly.

TV and media M&As are increasingly impacted by competition law controls. The target entity may be relatively small, and its turnover/share of supply might not meet the usual threshold to trigger Competition and Markets Authority (CMA) intervention. But, the deal may still be scrutinised if the acquirer has other UK media interests. This is a crucial consideration for buyers.

It means that purchasers of smaller, boutique-type production companies or digital media businesses may still have to demonstrate that the acquisition will not lessen competition. A small production house, for example, may play a disproportionate role in a specific genre or have unique relationships with distributors or broadcasters that make it necessary for the CMA to impose conditions or restrictions on the deal.

It is essential that buyers and sellers consider the effect the deal will have on relevant markets, consumer choice, and access to content early on in the deal. The risk of delays or having to meet onerous CMA conditions will reduce the entity’s attraction to potential buyers. Sellers should assess these possibilities before marketing and, where a real risk is identified, take steps to address potential issues.

Investors in UK media and TV companies are often motivated by the commercial agreements the target company is party to. Will these survive the transition to new ownership? Typically, contracts will include commissioning and development agreements with broadcasters, streamers and online platforms. They may also include advertising contracts, content licenses and contracts for production, editing and other services.

As with any commercial M&A, all contracts should be scrutinised carefully for change of control provisions. How robust are the agreements when it comes to termination rights, for example? Do they contain renegotiation or consent clauses applicable on change of ownership?

Where a major distributor or broadcaster can modify agreements on transition, the value of the deal can be significantly reduced. These considerations are particularly applicable in media and TV contracts because the value of many agreements in the industry is closely associated with unique creative talent or key staff who may or not remain with the target entity post completion.

UK media businesses increasingly operate on a subscription basis and, as a result, hold considerable amounts of sensitive data. While information on subscribers, viewers and their consumption of various media all represent a lucrative commercial asset for the buyer, handling the data comes with significant regulatory obligations. This includes visual data.

Companies in the sector must follow strict data protection rules. Sellers must demonstrate compliance with UK GDPR and all relevant data and consumer protection legislation. For acquirers of TV and media businesses, scrutiny of compliance records, including historical data breaches and an analysis of internal processes and staff awareness of the importance of data protection, will form a key part of due diligence.

Non-compliance with data protection rules presents significant financial and reputational risk and must be fully addressed during the transaction. The proliferation of data analytics, algorithmic targeting of consumers and digital profiling across the media sector means it is now more important than ever that data protection procedures are reviewed regularly and remain fit for purpose.

As a relationship driven industry, buyers will want to ensure that key personnel are contracted to stay the course and that these contracts contain appropriate protection via restrictive covenants. Issues with sponsor licences and skilled worker visas may be important to resolve as part of the transaction. With a high level of freelancing in the industry, the quality of the freelancing and contracting arrangements will also be subject to scrutiny. The buyer will want to ensure that the freelancers are correctly classified as independent contractors in order to avoid liability under employment law obligations and/or tax.

There is little doubt that the media market has been hugely disrupted by AI and the striking change in audience demand and media consumption. However, the traditional dominance and stability of the UK production and creative industries have enabled the sector to retain real value. It continues to attract significant domestic and international investment from existing owners, strategic buyers and private equity. As we have outlined above, however, the distinct regulatory regime means that there are many legal considerations applicable to M&As in the TV and media sector that do not arise in other commercial transactions.

We have outlined several of the key areas of concern for buyers and sellers. Other issues that arise in TV and Media M&As in the UK include advertising regulations and consumer protection, employment law and TUPE consultations, retention of key talent and scrutiny of editorial compliance history.

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