For those who don’t know, Warner Bros. Discovery (WBD) is effectively off the market, having already signed a merger agreement with Netflix. But there is another suitor: Paramount Skydance (PSKY). Despite their offer being rejected, PSKY is going hostile.
I’ve been following the trials of PSKY and WBD through Puck News, and it has been a masterclass in clashing egos. The latest Puck News article by William Cohan
But beyond the drama, the article highlighted a critical issue: if PSKY manages to acquire WBD, bringing these two brands together will be a nightmare, especially after PSKY has gone litigious to get the deal done.
When reading the Puck piece, I was struck by the admittedly obvious point that “the growing pile of recriminations and negative feelings between WBD and PSKY don’t serve the objectives of either party particularly well.”
At Good, one of the main challenges we’re asked to solve is managing a brand transition when one business acquires another. If PSKY wins, this could be an almighty merger. But that’s winning the battle, not the war.
We believe that brand strategy is business strategy. You cannot separate the two. The PSKY takeover bid isn't just financially risky (with its reported $87B debt load); it is a brand disaster in the making. A brand built on hostile litigation and massive leverage is destined to fail because the internal reality will effectively kill the external promise.
Here is what stands in the way of a successful merger:
1. Internal Culture is the First Customer
Let’s start with the most obvious and important fallout. The article describes the relationship as deeply fractured, with WBD viewing PSKY as a "litigious counterparty" and PSKY dismissing WBD’s concerns as "irrelevant."
Successful B2B and corporate brands are built from the inside out. Employees are your primary brand ambassadors. A takeover forced through "pissing matches" and legal threats creates a toxic Day 1 culture. If the WBD board and employees feel conquered rather than acquired, the internal brand collapses. You cannot "market" your way out of a merger where one side actively despises the other.
Layoffs are often a consequence of this type of merger, but on Day 1, you need everyone to be with you; you need to feel like one team. Making references in your filings about how the other side is "irrelevant" does not pave the way for a successful transition.
2. Financial Shackles Disrupt Brand Strategy
The Puck article highlights that PSKY’s bid is essentially a massive LBO (Leveraged Buyout) with $87 billion in pro forma debt and a 7x leverage ratio.
If business strategy is brand strategy, then a business strategy defined by debt service mandates a brand strategy defined by cost-cutting.
A media brand requires investment in risk - new shows, new movies, new formats. An LBO structure requires guaranteed returns to pay lenders. The "Business Strategy" (debt) will strangle the "Brand Strategy" (innovation), leading to a hollow brand that stands for nothing but survival.
This looks like an existential crisis for a media brand. It deeply impacts its immediate core constituent: the employees at WBD. Not to mention the external talent that PSKY needs to attract to make world-class entertainment. If the best showrunners and directors fear a debt-ridden, cost-cutting owner, they will simply take their scripts elsewhere.
3. The Authenticity Gap
Finally, we have a topic we’ve been discussing at Good long before this feud: the gap between how a business says it will behave versus how it actually does. This is highlighted perfectly as the mud-slinging intensifies.
PSKY claims to offer a "superior" home for WBD’s legendary creative assets. Yet their behaviour - threatening "DEFCON 1" litigation, engaging in public insults (calling the Netflix deal "psychedelic antitrust"), and filing aggressive SEC complaints - reveals a culture of hostility, not stewardship.
You cannot build a brand based on "creativity" and "partnership" when your entry strategy relies on legal bullying. The "reality" of the takeover (hostility) will bleed into the brand. It seems to be centred purely on securing IP, which risks alienating current staff, future talent, and consumers alike.
These are just three points that spring to mind, but they are critical. This is warfare - high stakes, billions being sloshed around, monumental egos driving decisions - and the goal right now seems to be dominance.
But from a brand perspective, I would suggest that someone at PSKY needs to understand that the major objective isn’t just winning the war. It's securing the peace.
Good luck