The Big Story: Why Paramount Paused Its Blockbuster $111 Billion Deal for Warner Bros. – The New York Times
“One explanation is that they want more time to formulate the case, to tell the story as completely and favorably as they can.”
Communicating the Deal
3-minute read
“Rising costs, fewer jobs and lower quality.” These were a few “proof points” in a recent article discussing opposition to a proposed merger.
Sound familiar? Those are the quick, repeatable and tiresome arguments all too common in the healthcare merger and acquisition space today. Critics used these points because they are simple and effective. They also speak directly to what people worry about the most.
But this wasn’t a healthcare merger. It was the proposed merger of Paramount and Warner Bros.
States scrutinize a blockbuster deal
The megadeal would unite two news organizations, two streaming platforms and two movie studios. The announcement of the merger immediately raised antitrust eyebrows from industry leaders and federal officials. Now, a number of state attorneys general have signed on to a lawsuit to stop this merger, claiming – among other things – that it would stifle competition, harm movie theaters and spike consumer prices for cable and streaming.
Many of the states that are speaking out are the same vocal opponents of healthcare mergers, and it looks like they’re dusting off their playbooks for this merger. Some of the arguments may fit better in healthcare than in entertainment, but the political playbook is familiar. (After all, can we get any more “low-quality” than the live- action version of “Moana”?)
The pressure from the state AGs has worked, for now, not because of a compelling legal argument but because Paramount and Warner Bros. underestimated the key role politics play in deals. Getting any deal across the finish line requires political thinking, and healthcare deals are potentially even more complex than entertainment mergers.
The politics of getting a deal done
This is not just about “big P politics,” but the “little p politics”- those involving how people are going to feel and react to a merger announcement. While there is an important and specific role for attorneys, elected officials and regulators that must be considered, what people hear and how those messages are received is the key to success.
In healthcare, this starts with doctors and nurses. They are often the most trusted voices in a hospital and the people who patients and families look to when they are trying to understand what a merger really means. If they are confused, skeptical or left to learn about the deal from someone else, that uncertainty will spread quickly.
The same is true for business and community leaders. These are the people who know how the hospital fits into the local economy and the benefits that a strong health system provides. They may not have a decision in approving a partnership, but they have influence over those who do. Their voice and perspective can shape whether decision makers see the partnership as a threat, a rescue or an opportunity.
Engaging these groups doesn’t mean asking them to blindly support a potential deal. It means giving them information early, hearing their concerns and being willing to answer direct questions about jobs, access, services, quality and local control. Those conversations can surface problems before opponents define them publicly.
Healthcare leaders need more than a legal strategy and a set of talking points to get approval for a merger. They need credible people inside and outside the organization who understand the need and can help others understand it too. Ignore that part of politics, and the process gets much harder than it needs to be.
Quick reminders
How do leaders create meaningful engagement?
- Build trust and demonstrate value long before you need it. Be ready to tap into it.
- Create a compelling story that highlights the benefits while addressing the “What does this mean for me?” concerns.
- Be ready for opposition. It’s part of the process – whether from regulators, unions, competitors, community leaders and/or others.
- Remember, people can respond emotionally to familiar brands. Hospitals aren’t just businesses in people’s minds but tied to personal experience and local pride.
- Don’t ignore the people politics in a deal. Engage with nurses, doctors and community leaders early and often.
On paper vs. in practice
In healthcare, successful merger communications aren’t built around telling people, “Trust us.” They’re built around showing why that trust is warranted. A merger may make sense on paper, but people will judge it by what they believe it means for their hospital, their job, their doctor, their access to care and their community.
It will be interesting to watch what happens with Paramount and Warner Bros. Partnerships succeed when people understand the benefits, far beyond financial measures. The simple lesson: Deals are easier to defend when organizations have already shown up for the communities they serve. Trust is not created by a merger message. It is the groundwork that makes the message believable.
Contributors: Isaac Squyres and Emme Baxter
Image Credit: Shannon Threadgill
