Mergers and Acquisitions

What gives Succession’s depiction of big business drama its verisimilitude is how little of value the enterprises of its characters actually produce. Facing weak growth, Waystar Royco’s prospective options for expansion involve very marginal investment in their core business, staff, or innovation. The company does pay some attention to its fledgling parks division, but efforts to digitize their news arm mostly boils down to producing “skulls” — layoffs — to keep things lean.

Waystar’s main growth strategy is to devote enormous resources on prospective mergers and acquisitions — both forms of what economists call inorganic growth — to fatten up its balance sheet and swallow ever more market share.

Despite slow growth in local media markets and protest from younger characters, Waystar embarks on a campaign of gobbling up local TV stations. It also tries and fails a scattershot attempt to take over a major liberal media conglomerate via an outrageous $25-billion leveraged buyout (partly to help fend off a coup by making Waystar too big to take over). For Logan, driven by ego and a quest for more power, the madness of these decisions — and their optics — don’t matter.

The company’s media consolidation generates concerns about monopoly ownership that lead to popular protest and cries to protect democratic debate. Waystar Royco, like its real-life analogues, soldiers on basically unscathed.

Waystar Royco’s biggest opponent is not rival media outfits but rather the existential threat presented by Big Tech. At the end of season three, when an attempt at acquisition fails, Waystar Royco begins proceedings to merge with streaming giant GoJo.

Trying to pull the legacy media dinosaur out of potential obsolescence, failsons Kendall and Roman Roy spearhead these initiatives. In addition to the GoJo bid, they take over Vaulter, a Gawker/Buzzfeed–like combo oriented toward a millennial viewership. After investigating Vaulter’s mostly cooked books and hearing about a union drive, Logan instructs Kendall to gut the company, leading to 456 layoffs.

This voracious pursuit of acquisition doesn’t just mirror what’s happening in real-life media sectors — look no further than Disney acquiring Fox, or CBS’s merger with Viacom — but all over the global economy. Decades of slowing economic and productivity growth have motivated a small number of well-placed oligopolies to take over smaller opponents. These massive firms are not simply increasing their political and market power, but economic inequality writ large. In 2021, mergers and acquisitions broke record highs, capturing $5 trillion.

Succession illustrates the political implications clearly. In the third season, the family attends a Republican fundraiser where they will essentially “pick the next president.” Logan’s close relationship with the sitting president, meanwhile, results in constant access, favors, and preferential treatment for Waystar.

The real-life financial sector’s tendency toward mergers and acquisitions leads to “higher prices, lower investment and lower productivity growth.” Since 2007, tech’s Big Five have acquired more than 600 companies. A 2015 study found that “the top 10 percent of firms now account for 80 percent of global corporate profits.”

The foil to this growing concentration of corporate power is falling labor power. Tepid wage and job expansion have left workers holding the bag. Meanwhile, executives like the Roys earn billions, leveraging their near-monopolistic power to swallow enemies and grow ever larger.

The phenomenon of outsize inorganic growth began in the 1980s, as corporations faced falling profitability in “productive” sectors — that is, industries that actually create something of value. To adapt, as economist Michael Roberts points out, “corporations switched to mergers and financial speculation” and more profit came from “capital gains rather than . . . from production.”

The economy is now caught in the clammy grip of stagnation, with economists like Roberts calling our current period a “long depression,” resulting in low demand for employment. At the same time, money has exited the “real” economy, having been poured into the financial sector and swelling its importance — something known as “financialization.”

Some theorists contend that we’ve entered a “new phase of monopoly capitalism . . . in which monopolization, stagnation, and financialization” work together as “simultaneous and mutually reinforcing trends.” Simply put, less money now goes into investment or job creation. Instead, businesses look to new ways to profit, investing in assets that produce nothing. Researcher David Levy observes that “without balance sheet expansion, it is exceedingly difficult to achieve the profits necessary for the economy to function.”

But the economy is far from functioning in a fashion that anyone would recognize as useful. Immense wealth continues to be hoarded by elites, exacerbating income inequality, aborting opportunities for economic and job growth, and ensuring sluggish production.

Waystar Royco embodies this stagnating decay: it limps from merger to acquisition in the hopes of surviving pressure from advances in tech, all while engorging executive bonuses and shareholder dividends.

Debt Spirals

Despite their head-turning profits, contemporary corporations like Waystar Royco often carry enormous debt. Owing to a stroke, Logan is incapacitated at the series’ start, leading eldest son Kendall to assume temporary control. Kendall struggles to stabilize the company’s cratering stock price as markets reflect the uncertainty of his father’s health. He soon learns about the company’s nearly $3 billion debt hole — from a loan his father took out in 1985 — for which the bank will demand repayment if the stock price falls low enough.

It’s no coincidence that since 2008, during a period of historically low interest rates, corporate debt has doubled. Heavy hitters like Alphabet and Microsoft are loaded, but estimates show that one in six corporations can’t even cover interest payments. As Christian Parenti and Dante Dallavale note, the “most threatened sectors” are “energy, automotive, insurance, capital goods (meaning equipment and machinery), telecoms, aerospace and defense, and some parts of retail.”

AT&T, Disney, Comcast, ViacomCBS, Discovery, and Fox are all up to their ears in debt. Media firms have dug themselves into deep arrears by trying to keep up with the meteoric rise of Netflix and other streaming services. Like most corporations, they’ve also used the debt to pay themselves through stock buybacks — whereby a firm buys its own stock to boost its price — or to fund acquisitions.

The more vulnerable firms will face significant crises soon. In all, the situation resembles a kind of “zombie capitalism”: a dangerous scenario where firms impaired by debt or underinvestment lack the profitability necessary to finance the massive debts they’ve assumed.

Private Equity Parasitism, Shareholder Supremacy

Kendall, desperate to claw the company out of debt, attempts a risky solution to the problem. After bungling a negotiation with the bank, he enlists Stewy, a friend and a ruthless private equity investor, selling him a chunk of the company and some voting power to get the bank off his back.

Logan soon awakes from his coma, begins a slow recovery, and announces — surprisingly — that he won’t be retiring. Kendall, robbed of the job he has anticipated acquiring for his whole life, calls a vote of no confidence against his father. The vote does not go his way, and he’s fired. Kendall then sets in motion the events that will drive the show’s narrative for the following two seasons, featuring two central players from our real-life economy: private equity investors and shareholders.

Aggrieved, Kendall attempts, in cahoots with Stewy, a hostile takeover of the company. He also learns that Sandy Furness, one of Logan’s main business rivals, happens to own a shell company inside Stewy’s firm. “I’m a parasite in a parasite,” Sandy jokes to Kendall.

In the end, the coup plan comes to nothing. Kendall shifts his ground after being blackmailed by Logan.  The conflict evolves into a season-long proxy war — a struggle for who runs the company — fought between the family and Stewy, Sandy, and whoever else either team can win over. Proxy fights require loads of money, leading to protracted negotiations and high legal costs.

Stewy, a walking emblem of private equity, hypostatizes contemporary capitalism. His bald-faced focus on the bottom line, shorn of manners or concern with civility, liberates him from the already compromised sense of decorum and emotional politesse that inhibits other characters. This laserlike focus on profit frees him from the messy ambiguities of existence, allowing him occasional moments of perspicuity. In one satisfying scene, Stewy effortlessly derides the family’s grandiose arguments for keeping things in their control, pointing out that shareholders merely want a “little more money on their fucking dollar.”

Succession aptly illustrates the burgeoning power of private equity. Most people have some sense that private equity has become a major mover and shaker in financial markets but find the investment practice to which it refers baffling. The basics, however, are not too difficult to understand. As Nicole Aschoff writes, “Their business model is simple and brutal.” Using pooled investor cash, a fund purchases a company, strips it down, fires workers, shutters doors, charges a huge fee on top of it all, then “either sends it into bankruptcy . . . or sells it.”

Knowing he’ll profit no matter what, Stewy remains above the fray over who will succeed Logan, quoting Rupert Murdoch himself: “I’m spiritually and emotionally and ethically and morally behind whoever wins.” The family, meanwhile, tries to court shareholders to avoid losing the company. They visit important figures like filthy rich, whip-smart investor Josh Aaronson, who asks for stock buybacks to “juice” his earnings-per-share in return for his support.

Shareholder lionization, like dividends and stock buybacks, is another common feature of our current economic reality. As Public Services International points out, “Over the last decade and a half, dividends absorbed 37 percent of corporate profits in the US.” Even more shockingly, “dividends and stock buybacks represented 91 percent of corporate profits in the US between 2004 and 2014.” While CEOs recently declared the era of “shareholder value maximization” to be dead, the stock buyback binge continues, diverting money from wages, innovation, and job creation.

Main Street Casualties

As giant corporations get high on their own supply and busy themselves with unproductive ventures, it is workers, ultimately, who pay the price. We see it all through Succession, often subtly; David Klion observes that the show’s mostly unnamed workers are “plundered and exploited and discarded by these pampered sociopaths.”

The show’s working class — maids, servers, cleaners — often act as a kind of wallpaper against which the real drama unfolds. Occasionally, they feature more prominently: a scandal in Waystar’s cruise ships division, involving the systemic sexual assault and murder of foreign workers, shakes the company; Roman antagonizes a groundskeeper’s child by offering him a $1 million check before ripping it up in front of him; Kendall’s inebriated actions lead to the death of a waiter. The incident is coldly dismissed by Logan as “NRPI” — no real person involved.

As Klion notes, the main characters leave a mess wherever they go, but “we will never learn the names of the people who have to clean up after them.” This same story echoes throughout the global economy. As the “real” economy recedes and inorganic growth and outsize executive compensation take its place, the unnamed workers of the world are left to clean things up — navigating limp job prospects, low wages, and stagnating growth, and suffering under soaring inequality.

Absent in Succession is any successful depiction of resistance. In one instance, a protester throws a urine-filled balloon at Logan, calling him “monopolist scum.” The series’ liberal-left characters regularly criticize Waystar’s stifling of democratic debate due to its monopolistic tendencies. Gil Eavis — the Bernie Sanders–ish presidential candidate who quotes Karl Marx — echoes many of these criticisms but is the one character who goes further, taking specific aim at the for-profit nature of news media. He is, however, quickly dispatched by Logan, and things return to business as usual as the family use their close ties to the Republican-controlled White House to win political favors.

This is, admittedly, a bleak world. But it is ours, and the great success of Succession is that it looks unflinchingly at the complexities of contemporary capitalism, layering comedy into tragedy in its drama. Succession allows us more than a peep through the keyhole of the boudoir of our economic royals — it blows the doors wide open.