As "Succession" Shows, A Strong Brand Makes a Difference in Deals

As fans of the hit show “Succession” know (spoiler alert if you haven’t seen recent episodes) Logan Roy, scion of the about to be sold media empire of his name, suddenly passed away. This leaves the three siblings, who have been vying for the CEO position, left without a defined succession plan - a longstanding source of conflict with their father and amongst the siblings. All the while, a deal to sell a portion of the company to billionaire acquirer and hipster tech bro Lukas Matesson is still pending. Seeing an opportunity, Matesson tries to negotiate down on the price of the deal claiming he’s the bigger brand now that the company’s leadership is undefined - and, he wants it at a discount. 

As both parties seek the upper hand, there is a competition to demonstrate brand equity. Brand reputation is the difference between winning and losing - outlasting your competition or succumbing to them. In an unexpected twist, when son and heir apparent to the Roy empire Kendall Roy finds some dirt on Matesson, he flips the script and aims to squash the deal with regulation or buy out Matesson’s media conglomerate instead.

The story is unfolding while we begin what may be a long hot summer for companies looking to raise capital or be acquired. In parallel with Succession, companies with the strongest brand recognition are likely to earn the trickle of capital that’s still flowing. 

Companies need to stand out in both good times and more challenging times. 

Most recently, public markets over the last four quarters, combined, didn’t break $10 billion in IPO proceeds. That pales in comparison to the $35 billion raised in the fourth quarter of 2021 alone. M&A activity isn’t faring much better. Estimated deal values are coming in at barely $1 trillion for all of 2023 versus last year's over $4.5 trillion. The number of total deals are also projected to fall some 75% from last year to just over ten thousand, from more than forty thousand in 2022.

Stronger brands that earn more capital are able to withstand a drier period of funding, and we are seeing that play out as some companies get acquired and others go bust. It is unpredictable when the “window” will open again but when it does you want to be prepared and building a stronger brand will better position you to compete in such an environment. 

Brand identity is also more than just the sum of its parts. Take Apple, for example, with a bevy of gadgets that span phones to desktops to watches and increasingly services from streaming to personal finance. Each product needs to be strong and have a distinctive image and yet Apple as a brand has an overarching lifestyle image. 

The importance of a consistent voice, as in the fictional series “Succession” where brothers Kendall and Roman are pitted against each other over control of the flailing company theri father built, is also critical. A unified brand voice coming from the top, while at the same time allowing leaders to have unique and distinct perspectives, is a challenge many real companies face as well.

Bed, Bath, and Beyond, once a key anchor of strip malls across the United States, had to file for bankruptcy recently after trying to sell their own branded products. Turns out customers wanted good prices for known names and sales plummeted. 

Not only did the business strategy destroy credibility with its key suppliers who were kicked off store shelves, but the company lost sight of its mission, brand, and message and they could not attract a bail-out. Even if a company stays true to its overarching vision, day-to-day sales and revenue matter far more than lofty statements. 

With easy money all but gone, and Fed rates likely to stay higher for the time being, companies need to double down on what they do best – stick to their brand and focus on their business mission. These are the firms best positioned to thrive despite a parching summer investment drought.

Thankful for Five Years as Pursuit PR

On October 17, 2022, Pursuit PR reached its 5-year anniversary, a considerable milestone. As we reflect on this inflection point, we are thankful for the opportunity to support and grow alongside our clients.

The dream for Pursuit PR started during my sophomore year at Syracuse University’s S.I. Newhouse School of Public Communications. During an alumni session, an established PR executive spoke with the class about her experience starting a firm after a decade working in-house at a major news station. She described her office set-up, how she changed her phone number so the last few digits were zero - to look like a bigger company - and the importance of her network. The possibilities of both public relations and entrepreneurism seemed fun and endless.

Fast forward to today, and it is so much more positive than I ever even imagined. I have had the unique opportunity to build this firm in partnership with my husband, Matthew Kule, since 2018. Further, my father Alan Gerber was an anchor as my career coach and Pursuit PR’s CFO and Managing Director, providing invaluable operations and business strategy counsel from the start. 

Now, we work at the intersection of the fast-paced industries of finance, tech, and media. Our talented community of specialists collaborate seamlessly every day. Our team of media relations, content creators, project management, business development, marketing, and employee experience has been essential to our growth. Together, we advance Pursuit PR’s mission: provide unmatched personalized client attention and exceptional results, driven by our core values of integrity, authenticity, and accountability.

With our focus on C-Suite communications, we have the opportunity to work with some of the most revered minds in business. We learn about best practices and industry trends on an ongoing basis. At the same time, we bring fresh thinking about how to best apply and amplify information in a way that our clients’ audiences understand and that resonates with the media. With intentionality, we create a safe environment to share unfiltered insights to help inspire thought leadership, drive media coverage, and raise eminence. It is rewarding to support inspirational people that value the work we do.

To date, referrals have been the source of business growth - and we are grateful for the recognition from our business partners, friends, and family. As we forge ahead, we are motivated as ever to relentlessly pursue and deliver results for our clients, team, and media partners.

Pursuit News to Use Intelligence

Trend Analysis

Capital Markets

U.S.-China relations may be at one of their lowest points in decades, but that isn’t stopping the world’s two largest economies from collaborating in financial markets. Chinese hotel chain Atour Holdings Ltd. is reportedly looking to list in the U.S. and is planning to open its order book for investors. That’s good news as the U.S. economy faces more Fed tightening and mixed quarterly earnings reports. 

Some Chinese firms in Hong Kong are also cooperating with U.S. audits, a requirement to keep them listed on U.S. exchanges. This had been a contentious issue for Beijing, which wanted its companies’ books kept off limits. Public Company Accounting Oversight Board officers have completed a first round of audits, on-site, at several Chinese concept stock companies. Hong Kong shares rose on the news.

It isn’t just Chinese companies looking for a market rebound. In early October, the still and sparkling water brand, Liquid Death, raised $70 million in its Series D funding round led by Science Ventures at a $700 million valuation. CEO Mike Cessario, in a recent Yahoo Finance interview, said that “an IPO path is something we're definitely going to seriously explore”, though he made no commitment to that funding path or provided a specific timeline for a decision.

Instacart, after delaying its own IPO, is paying this year’s employee bonuses in cash. That may go a long way towards employee retention in an environment where lucrative stock grants have lost their luster.

Technology and Media

The streaming wars are ramping up as the field becomes increasingly competitive. Netflix, in a risky move to add advertising for a lower priced tier of membership, announced a $7 per month plan that excludes some content and show downloads. Despite the competition from similarly priced offerings, Netflix remains a streaming leader and Barry Diller, chairman of IAC thinks they will remain in the top position. He did add on CNBC’s Squawk Box that the advertising model may add confusion to their market differentiator as a pure pay service.  

Amazon, with its own streaming offering, is expanding options for its Prime subscribers. The company is building out a larger music catalog in response to customer demand. They face competition not only from industry stalwarts like Netflix for series and movie content, Spotify and Apple on the music front, but also new content entrants including Walmart that is adding Paramount+ to its Walmart+ service. Overall growth rates are expected to slow for Amazon, so these new and expanded services may be key to retention going forward.

Not to be completely left out of the media landscape, movie theaters are hoping to attract viewers to the big screens with major releases in 2023, including more Marvel and DC Comics films. Domestic box office receipts have been hit hard by the Covid pandemic. Morgan Stanley estimates that this year’s revenues will come in about a third below 2019 totals with modest, yet slowing growth over the next two years. 

Workplace Trends 

Another tried and true method for keeping employees happy is creating a positive workplace culture. According to Gallup’s “State of the Global Workplace: 2022 report” the global economy loses trillions of dollars to low employee engagement.  Trends in engagement and wellbeing are stable, but at low levels. Work stress remains elevated. South Asia and Europe were highlighted as experiencing declines in worker satisfaction. The U.S. and Canada, however, remain top of the list of countries in which to find a new job, according to the survey.

In the U.S.,  employers are increasingly encouraging employees to return to the office as covid concerns decline. This is giving workers the chance to reset their relationships with managers, another go at first impressions post-pandemic.

And as in-person team reunions become more common, motivating them to innovate and take risks becomes increasingly important. Managers need to create an environment where there is a willingness to experiment as well as measure progress. Culture is key.

Pursuit News to Use Intelligence

Trend Analysis

Capital Markets

With all of the news about equity markets these past few months you’d think no executive in their right mind would go public in this environment. There is the Fed’s voracious appetite for tightening, a crimp on corporate earnings, weakening consumer demand, and a strengthening dollar. All of that is ricocheting around the world affecting markets in Asia and Europe. To top it off Germany is facing a severe energy crunch as Russia tightens the taps on gas just as winter descends. And its exports to China are hitting rough times as Beijing struggles with its own internal economic problems from Covid-zero policies to energy shortages and drought.

The truth about conventional wisdom is that it's often not the whole picture. Capital markets are getting a new boost as Porsche rocketed off the starting line to a $75 billion valuation in their debut Frankfurt listing. Nasdaq is also expecting Chinese listings to start picking up speed over the next few months as U.S. audit concerns dissipate in what appears to be agreement with Chinese authorities over access to corporate records. And Instacart is going ahead with its IPO plans, but is eschewing the traditional big-money raise. Instead, the company is banking on the sale of employees’ shares to raise capital at launch.

Even on the acquisitions front, companies looking to sell are finding some stellar deals. Figma, a startup co-founded by Ivy-league drop-out Dylan Field, who made wire diagramming for app development de rigeur, sold to Adobe for an eye-watering $20 billion.

Technology and Innovation

Not every acquisition yields ground-breaking innovation, however. When there is a lot of cheap money sloshing around, as it has been during the historic Fed loosening over the past few years, many firms try to buy their way to future growth. Bankers and external advisors may be keen to broker M&A deals, fueled in part by fat fees, but neglecting to build an internal capacity to innovate has costs. It may be tougher to re-tool corporate culture and merge bottom-up and top-down strategies to fuel innovative solutions, but they pay off when done right, according to a recent Harvard Business Review article on the “Perils of Innovation by Acquisition”.

Still, it’s no guarantee of success as Google found out with Stadia, its three-year-old cloud-based gaming service. Despite some technological prowess, the initiative failed to gain traction and was shut down. Corporate culture, it turns out, is proving to be an important requirement for continued success. Google CEO Sundar Pichai spent much of a recent all-hands meeting addressing employee concerns about company cost-cutting measures. Pichai, who expressed some annoyance during the meeting, said "I remember when Google was small and scrappy," and added that, "We shouldn’t always equate fun with money." 

Google's finance head told employees to temper their expectations for holiday parties.

Media

The entertainment sector is also adapting to the vicissitudes of fickle viewers in their attempt to innovate. Broadcast networks are launching fewer new shows this fall as they become more of a testing ground for content, like baseball farm teams. The ones that perform well can be promoted to the big leagues — streaming services. Rather than being judged on traditional metrics, the networks want to be evaluated with this new role in mind. 

That could be a challenge to advertising revenue on the mainstream channels. A shift is already underway for streaming services, which are also on the hunt for profitable content. That’s more likely to be ad-supported and “reality” TV-based in the genre of Judge Judy rather than blockbuster and budget-busting mega-projects like Game of Thrones. The competition is becoming intense, as former Disney CEO Bob Iger noted at Vox Media’s Code Conference. Not all of them are going to make it, he said, with Netflix, Apple TV+, Amazon, and Disney+ the most likely to survive. Iger expects HBO Max and Discovery+ to face tougher times.

HBO Max is already cutting back. Originally envisioned at launch in 2020 as the home of everything Warner Bros., DC, HBO, and kids shows, the service is cutting costs by jettisoning series and films as it shifts strategy in the lead up to next summer’s merge with Discovery+. 

Streaming services run by big tech parents are also betting big on live sports. Amazon Prime picked up the NFL’s Thursday Night Football coverage and Apple TV+ has MLB games. Some are also developing sports-oriented documentary series putting viewers into the world of professional athletes and teams during their biggest moments including Netflix’s “Drive to Survive” and Amazon’s “All or Nothing”.

So even though the markets are reeling from each new economic data point, from unemployment figures to headline inflation, the real economy continues to chug along. Some firms are announcing layoffs and tighter budgets, while others continue to thrive and invest in the long game where bigger profits lay.

Communicating is a Constant - Especially in a Choppy Market

It is essential to communicate effectively in both the best of times and the more challenging times. Just like long-term strategic investors hold their positions instead of fleeing the market, companies need to stay the course with communications as a constant. Yet one of the common mistakes that companies make is being reactive - or worse, silent - instead of proactive. 

It’s not easy, but it’s necessary to communicate amid the ebbs and flows of business performance. The headlines may portray macroeconomic uncertainty, however, the headlines don’t tell the whole story, or even your story, and they will be told with or without you. Why not be part of the story, shaping it to inform your audience?

Here is why a strong ongoing communications strategy matters at all times:

• Corporate reputation drives business health. It has a lasting impact on the entire lifecycle of the business. Strong corporate reputation boosts the credibility of your business and raises the eminence of your leaders and overall company, among many benefits. As Warren Buffet has said, “We can afford to lose money — even a lot of money. But we cannot afford to lose reputation — even a shred of reputation.” For more on this topic, read this Pursuit PR blog, Invest in Your Reputation For The Best Returns.

• Silence creates irrelevance. When you become irrelevant or have a negative reputation, it is even harder to rebuild when the bull market comes roaring back. By investing in your reputation, you create relevance, elevate your brand awareness, strengthen competition positioning, attract new talent and retain key hires, and more.

• Thought leadership showcases value. Uncertainty can create a lot of questions (and concerns), and thought leaders have the answers. C-suite communications puts the executives into a position to inform the public and demonstrate credibility. Being known as a credible thought leader enhances your value to clients and talent. Thought leadership is the messaging architecture that solidifies executive insights and shapes the direction of earned, owned, and shared media. This works in support of and in alignment with your business objectives and brand position. 

• Shaping conversations drives media coverage. Media coverage reflects a snapshot of thought leadership insights. Opening up conversations creates relevance and may lead to new learnings about market needs, business ideas, and more. Amplification of earned content is key to creating further dialogue with clients, prospects, team members and partners. 

• Communication increases competitive edge. To be complacent in business is to allow your competition to outshine you. Communication is an integral part of the work needed to gain and retain market share. Being proactive with thought leadership improves your subject matter expertise, which drives opportunities to share industry knowledge with clients, prospects, and team members. It requires a deep dive into your business, understanding challenges and opportunities. 

• Good communication builds trust. It’s instinctual to communicate when there is good news. It’s necessary to communicate when there is not. Transparent companies build trust. For public companies, there is no choice but to share the good, bad and ugly. For private companies, there is little other choice if they want to earn and retain trust and confidence. 

As the global economy is vulnerable, the open question for businesses becomes: who will stay relevant? Who will be silent and complacent as others communicate, grow, outcompete and lead?

It is always important to be prepared. Now is the time to stay ready and play offense so you don’t fall behind. 

Pursuit News to Use Intelligence

Trend Analysis

Capital Markets

Tech stock options just aren’t what they used to be since the boom years went bust this year. Gone are the days when early hires could make a small fortune exercising options or selling some of their shares into a public listing. These days employees looking to cash out will have to wait a bit longer while the U.S. IPO market tries to regain its footing. 

One company defying the trend is Instacart, which plans to go public sometime before the end of the year. They may have a successful exit as long as they can keep showing profits and other profitable companies may follow suit. For the rest still running in the red, it’s going to take time before markets regain interest. That’s little solace for those who may have exercised their options thinking the recent stock market rebound was a sign of things to come. 

Chamath Palihapitiya, considered a bellwether for SPAC issuances, had to push back two mega-mergers this month. But still, special purpose acquisition companies (SPACs) have seen a slight uptick in interest with seven new mergers announced in the first sweltering week of August. That’s better than July’s single IPO raise of $100 million. It’s unclear when they’ll complete their acquisitions.

Meanwhile, the China IPO market hit nearly $58 billion in the first seven months of 2022, a new record for the country. Five IPOs have breached ‘unicorn’ status crossing $1 billion valuation, with one more waiting in the wings. Southeast Asia is also on the move as the New York Stock Exchange (NYSE) collaborates with SGX, the Singapore exchange. John Tuttle, Vice Chairman of the NYSE said in a CNBC interview that they are looking for ways to not only cross-list Singapore-listed firms, but also to find other avenues for listings.

Media

Back in the United States, the streaming wars are heating up as the Walt Disney Company racked up 221 million customers, outpacing long time market leader Netflix. In an effort to boost revenues even further, Disney+ and Hulu will try out an ad-free premium membership ($10.99/month), a 38% increase over the standard subscription that will now include ads.

Amazon is beefing up its streaming sports coverage this year with exclusive rights to Thursday Night Football (TNF), hosted by acclaimed sportscaster Al Michaels. To widen their viewership beyond the typical NFL and NCAA, Amazon is also offering a simultaneous stream hosted by the sports-comedy team Dude Perfect, known for their trick shots and challenges. Another potential deal with DirecTV may bring TNF to restaurants and bars.

Fans without an Amazon subscription can subscribe to the NFL’s own streaming service, which will now feature live out-of-market preseason games, along with live local and primetime regular-season and postseason games on phones and tablets only. That’s in addition to live local and national audio for every game.

Technology and Innovation

This summer’s heat wave hasn’t spared early-stage companies. As equity markets slumped and IPOs dried up, so did pre-IPO funding rounds. And even when they do occur, entrepreneurs are dreading the lower multiples that might lead to a down round where they are valued at less than what they were before. The rocky economy doesn’t help convince investors that it’s a good time to take on risk either.

In order to capture more of the value in the startup process, major venture capital investors are figuring out how to effectively leverage niche startups to create real world solutions.

In the “traditional” tech world, work-from-home may become as antiquated as a wired mouse. Apple wants its workers back, in person, three days a week by Labor Day. The goal — increase productivity. The question — will it work and how many perks will it take to keep highly skilled workers from seeking more flexible companies?

Pursuit News to Use Intelligence

Trend Analysis

Capital Markets

The tepid U.S. investment climate has caused a backlog of more than 300 companies waiting to IPO. Companies that have gone public recently have tended to be smaller listings under $100 million. John Tuttle, the NYSE’s vice chairman, is expecting a post-Labor Day resurgence in interest. Investors are focused on value versus growth and the ability to demonstrate profitability - for the time being. 

China stock performance has caught the eye of Goldman Sachs, Bank of America, Jefferies Financial Group, Amundi, and Citi—all of which have brightened formerly dim outlooks for Chinese equities. The MSCI China Index, the broadest measure of China stocks on mainland and offshore markets, is up more than 20% since March 15th.

With so much upside potential it’s no wonder that China-based listings are breaking records, while initial-public-offerings elsewhere dry up in the heat of recession fears. So far Shanghai and Shenzhen markets have remained relatively sheltered from the global downturn.

China’s Didi de-listed from the NYSE after pressure mounted from a China crackdown. That isn’t stopping other firms from chasing listings elsewhere, including through Special Purpose Acquisition Companies (SPAC’s). These firms have no operations, but have listings on exchanges. Active companies merge with them to get a fast on-ramp to going public without an IPO. 

Even though SPAC listing losses were more than doubled the S&P 500′s 2022 decline, companies are still choosing this route including in Singapore and the U.S. markets. Blockchain-based crypto payments provider Roxie is merging with Goldenstone Acquisition Ltd in a deal valued at roughly $3.6 billion. With so much money flowing via the SPAC pipeline, participants are concerned about potential regulation. Proposals from the Securities and Exchange Commission and Democratic Sen. Elizabeth Warren of Massachusetts were on the minds of participants at the recent 2022 SPAC Conference held in Rye, NY. And the tech bubble that seemingly burst this ear, well, money keeps pouring in as companies continue to build.

Streaming and Media

What’s old is new as streaming giant Netflix delayed the two episode “Stranger Things” finale by five weeks rather than dropping the entire season all at once. It’s a change in tactic for a company that prided itself on making the weekend binge “a thing” that became a weeknight ritual for many during those dark winter Covid nights. With 200 million subscribers worldwide, the ailing streaming giant is adapting to what its rivals like Disney+, AppleTV, and Amazon have been doing from the start—the weekly episode drop that teases viewers for weeks on end (and sustains the monthly fee model). It’s not all that different from the advent of the medium itself with 1950’s TV shows airing at a precise day and time with a cliffhanger kicker to keep viewers tuning in week after week. That and the “only in theaters” movie releases that are challenging the streaming world as people are eager to get out of their houses and watch a film on an actual big screen again.

Viewers are also overwhelmed with choices these days. CNN+’s early demise barely a month into their launch shows there’s a limit to what execs think will sell. Still, for cord-cutters, the cost of streaming services are beginning to add up. The goal was to beat the cable companies at their own game. If there are too many choices in the end, some kind of market consolidation is likely (note Discovery and WarnerMedia’s $34 billion merger). And the best positioned to weather any storm are the tech giants like Apple and Amazon, with deep pockets and enough time to wear down the opposition. 

In the end, profits will trump sheer volume of content. Those profits may be coming from new revenue streams including advertising. Netflix also announced a crackdown on password sharing though underground marketplaces sell them at rock-bottom prices. Non-fungible tokens (NFTs) are also in the mix as Tom Brady’s digital collectibles firm Autograph teams up with ESPN to sell NFTs based on the 10-part ESPN docuseries “Man in the Arena.” Whether the general crypto meltdown affects interest in this burgeoning segment is still TBD.

Technology

Blockchain is, however, making significant headway in the healthcare sector. Along with cryptocurrency, virtual reality, and artificial intelligence, U.S. healthcare spending is expected to double by 2040 to $8.3 trillion, up from $4 trillion in 2020, as the industry adopts new and emerging health technologies.

Some of that spending will inevitably revolve around cloud resources. Firms had been offloading their data storage, and increasingly their software needs, to external providers which offered zero downtime and back-up services. That trend may be shifting as Walmart made news with its ability to switch seamlessly between cloud providers and its own servers. That could save millions of dollars and offer a road map to other companies that want to reduce their dependence on big tech.

Securing all of that data, wherever it resides, also depends on a good offense. With that in mind, IBM is acquiring Randori, a Boston-based security startup that combines attack surface management (ASM) with continuous automated red teaming (CART) to help organizations bolster their cyber defenses.

Some firms, and governments, have also become increasingly concerned about where user data is being stored and who may have access to it. The popular short-form video app, TikTok, owned by China-based ByteDance Ltd, was in the spotlight after news surfaced that its user’s data could be accessed in China. They have now announced that U.S. user data is routed through the cloud infrastructure of its partner Oracle Corp. though the firm still uses its own U.S. and Singapore data centers as backup. They expect to delete U.S. user data from its own data centers and migrate fully to Oracle servers. 

Gaming

TikTok’s data storage is about to surge with the launch of its augmented reality development platform Effect House, where creators can build AR effects for use in TikTok’s video app. Meta is also expanding its AR offerings, though users may not be so happy. While its content creators will be able to monetize their creations in Horizon Worlds, Meta may take up to nearly 50 percent of the revenue. That’s some real, not virtual, money.

ByteDance Ltd. has some analog aspirations of its own, but its plans for an initial public offering have stalled. They finally filled a vacancy in their executive management team with the appointment of Julie Gao, a senior China-focused lawyer as their new chief financial officer. The position had been vacant since last November.
With tech under scrutiny, M&A is under review as Microsoft (ticker: MSFT) strives to advance its $69 billion all-cash deal with Activision Blizzard (ATVI). It looks like it might happen, according to Microsoft, with projections to close in the fiscal year ending in June 2023. If this does come to fruition, it will set MFST up for success and likely have a big impact on the gaming and broader M&A ecosystem.