How to Get Away With Merger Season Recap

Over the past fifty years, the Federal Trade Commission (FTC), Department of Justice (DOJ), and the judiciary have consistently approved mergers and acquisitions, contributing to the consolidation of industries that have proven to be bad for competition, consumers, and communities. Despite the prevalence of these mergers and acquisitions, the stories featured this season serve as a reminder of the power of local initiatives to challenge profit-driven corporate consolidation. These efforts are combatting corporatism within their communities and states, mobilizing grassroots movements, and working towards a shared vision for a healthier and more sustainable future.

Reggie Rucker: Hello, and welcome to another episode of Building Local Power. I’m your co-host, Reggie Rucker. And all season long, we’ve had this theme, How to Get Away With Merger. And the one thing we wanted to do in this sort of a wrap up episode is actually talk about how do they get away with merger. These are themes that we’ve talked about throughout the season on different episodes.
But we really want it to be really clear and highlight some of the methods and tactics that these large corporations use to merge and build their power and influence and at the expense of communities. So we’re going to have a short little discussion. Me and Luke, we’re going to chat it up a little bit and saying, Luke, I guess I should bring her in. What’s up, Luke? How you doing?
Luke Gannon: Hey, Reggie, doing pretty well. I mean, I think this has just been a really great season. To start off, Reggie, I mean, there have been so many incredible highlights. What have a couple of years been?
Reggie Rucker: Yeah, so I know first for me, I think about… Actually, it was the first episode we did for this season. It was the beer episode and it was a great discussion. Ron’s always great, but what I really appreciated, this was the first time ever since I was told I got to work on a podcast. I’ve been trying to scheme away to get somebody from Modesto, the 209, the Central Valley onto the episode.
And so I finally got Amanda Wright from Blaker Brewing, who’s Modesto’s neighbor out in Ceres. So I was finally able to get someone from around that area on the episode. And yeah, so it was just great to have her felt like home and it was really great. I think what I knew we were going to get from that conversation was the degree to which…
And this is I think a consistent theme throughout the episodes where it’s not just about the small business owner and the person who’s creating jobs and being an entrepreneur and creating this economic activity. But the degree to which a place like a local brewery is a community hub and it’s just a place to bring community together.
I think that was just really one of my highlights of the season and to sort of, again, relive some of that hometown magic. That was really fun for me. How about you?
Luke Gannon: Yeah, I love that hometown magic. Definitely one of my highlights this season, which is kind of ironic because the season is called How to Get Away With Merger, and this is one of the episodes where the merger didn’t actually get through. I’m pretty sure still pending, but this is called New Mexicans versus Fossil Fuel Giants.
And one of our guests on that episode, her name’s Mariel Nanasi, and this was an episode about this massive company, the Spanish company called IBERDROLA, subsidiary is Avangrid in the United States. It’s in an electric utility company and it has expanded rapidly across the US and it decided that it wanted to buy the public utility company in New Mexico, and it just had a horrible track record.
And our guest, Mariel, that we had on knew that this was just going to be horrible for the energy grid, the energy system in New Mexico. And so decided to build this movement of organizers, this grassroots movement, legal counsel, communications team, the list goes on, to fight this. And for at least three years, a number of people spent many, many hours opposing this and ended up winning various legal battles over the course of these three years. And it’s just this really heartening story that shows you that sometimes these community power movements do win.
Speaker 3: If you give up, you already have lost, right? The only chance is if we fight back, and so we got to use our talents to do so, and then we have a chance.
Luke Gannon: One of the things that talk about a little bit is how there is a lack of government response, unfortunately right now against mergers. And this was an example of a lack of government response. And so the community having to take that on. And that’s a lot for a community to do when you have a whole job, a whole life of your own and you’re doing this whole additional thing on top of it. The power of these community members, these local businesses, these entities that really are so valuable.
Reggie Rucker: The theme of the season, which is How to Get Away With Merger and how some of these companies got away with it. And that part that you highlight where it’s the private sector, these individuals or these small grassroots groups really having to pick up the slack from the lack of government response.
And that thing you say about these people have other lives to live, but somehow, they’re finding a way to make a part of their life this big fight to push back against the mergers or the power that these powerful companies, these merge companies try to exert in their communities.
And that really, that made me think about Wanda from out in East Carroll Parish. So we did the episode about broadband and the community broadband effort in East Carroll Parish. And I just remember the story that Wanda told about one of the managers or executives from Sparklight, and they come to her and they’re like…
Wanda: And say, “Well, Wanda, well, I’m going to do this and that for you on your bill so it could come down and you have great service and all of this cool stuff.” I said, “Oh, really?” Said, “That’s awesome.” I said, “But are you going to do that for everybody else too?”
Reggie Rucker: And so it makes sense that they would say, oh, I could probably buy this person off and get into like, hey, we’re going to let you go back to your life and you’re going to be taken care of if you just kind of chill out. So yeah, so it makes sense as a tactic to try to push these mergers through and to hear Wanda’s reaction and be like, oh, that’s cool. You’re going to take care of me. You’re going to take care of my neighbor? You’re going to take care of all of us? And if not, then get out of here. So yeah, I think that’s sort of like a slimy tactic.
Luke Gannon: There’ve been quite a few ways that we’ve seen how companies really get away with merging. Another thing that comes to mind is, and that is really a thread throughout all of these episodes, are how a lot of these, it was hard to choose a single merger for each of these industries. Ron talks a lot about this in the first episode, but we really see it across the season.
There have been a series of smaller mergers that ultimately lead to this really consolidated industry. And like the waste industry as an example, you have the series of smaller mergers over time. And then you have Waste Management being the largest waste company in the United States and Advanced Disposal being the fourth largest and Waste Management buying Advanced Disposal now making it the largest waste company.
And so just looking at the history of these mergers and how they slowly gain power in that harm that eventually causes, because it does end up being these really massive mergers.
Reggie Rucker: So Luke, are you familiar with the rope-a-dope? Do you know what that phrase means? No. Okay. So Muhammad Ali, famous boxer, grace of all time, all the things, he had this famous fight with George Foreman referred to as the Rumble in the Jungle. So at the time, Muhammad Ali was coming back from sort of his hiatus. His forced hiatus because he didn’t want to serve in Vietnam in the Vietnam War.
And so he was forced out of boxing and he’s kind of coming back. George Foreman has taken over this really powerful boxer, and a lot of people, most people think that George Foreman is going to crush Muhammad Ali. Muhammad Ali goes into this fight and he has this strategy of just standing up against the ropes and taking shot after shot from George Foreman, just taking shots, taking shots, taking shots. And eventually, George Foreman punches himself out.
He gets tired. Muhammad Ali comes off the ropes, beats George Foreman. And so what makes me think about that in this instance is part of what I am thinking as a tactic with these major corporations trying to merge is that they have this rope-a-dope strategy. They’re out here like we’re not a threat. Small merger here, small merger there, no big deal.
We’re not a threat. We’re not a threat as if they’re up against the ropes pretending to not be a threat. But then all of a sudden, you look up, and they’re knocking you out, right? They’re knocking this community out. They’ve accumulated so much power, they’ve weakened this community so much. Now, they’re taking over with all of their power and influence. So it feels very rope-a-dope-ish to me.
Luke Gannon: It’s hard when these companies have “convincing arguments”, and if you don’t look at the history of what has happened with mergers, the consequences of what has happened, it’s easy when the companies are telling you that it’s going to be good for customers. Costs are going to go down, your rates are going to be decreased, you’re going to get better customer service, the list goes on.
It’s easy to say, “Oh, well, I want all of those things you want. Yeah, we all want that, so let’s approve it.” But as a lot of people at ILSR have talked about, and a number of people beyond ILSR and on this podcast have talked about, if you look at the effects of these mergers, really across every industry, you’ll see that none of that’s actually true. And it really, the opposite generally happens.
Reggie Rucker: Sometimes and you mentioned the Mariel example out in New Mexico. And sometimes we win, and I think even Jon Schwantes and you talked about this consumer reports in the coalition that they brought together when it was a Comcast and Time Warner merger, and they won that one.
And so sometimes you win, but then what happens is these companies just have so much money. And so even if they lose the battle, they’re like, okay, we’ll just go to the next merger. We’ll just try again. Can you stop us again? Can you stop us again?
And the ability to be able to muster up that opposition over and over and over again, that’s hard for the grassroots groups and the nonprofit groups and things like that. So yeah, these big powerful, influential companies, they know that they have this money and lobbying power and influence on their side that they can wear you down. And so that’s definitely one of the tactics that seem to come up over and over again throughout the season.
Luke Gannon: Yeah, these companies will use every strategy they can, even if it’s slimy. And even sometimes if it’s illegal, they will do it ultimately to reap a profit at the expense of everyone else. So we just spoke about a few reasons of how companies get away with merger, but there are so many more.
We encourage all of our listeners to go check out episodes from this season to get a comprehensive idea of how these mergers end up getting approved. Reggie, what was one of your takeaways?
Reggie Rucker: I think the one thing that was consistent throughout the episode and actually made me think about the Dior St. Hillaire we did from BK Rots community composter up in Brooklyn. And she was just a great guest, and I am often thinking, she shared one of the composting songs that she made with us.
Dior: Consistently talking about cycles microbial your life will leave us with a brighter future that is just nurture the kids. I’m talking about macro and micro. Organisms feed on the browns and greens. Another way to say this is carbon or nitrogen.
Reggie Rucker: And for a month after that episode, I swear, I was like, singing this composting song. It’s so catchy. Whatever you do, go back and listen to this episode, find the song, link’s in the show notes. But it’s such a catchy song. But the thing that I think about most is the joy that she brings to her work, her advocacy work, her composting work, and the degree to which she said something in there about how composting truly is about community.
And I think that’s one of these themes that I saw throughout all of the episodes is that the people who were doing the work win or lose, they were building this community around their work, and that community was a source of energy and a source of joy. And I don’t care what these merging companies say that their merger is going to do for you. If they’re going to save some money or they’re going to be able to serve more people.
One, usually that’s a lie. But then even outside of that, one of the things that these companies just cannot do is bring communities together and infuse their work with this sense of community spirit and joy. And so that I think by far being able to have these conversations with these people on the ground who are building local solutions and building local power in the face of this corporate concentration, that’s always my favorite part of these episodes and definitely this season.
Luke Gannon: Absolutely. So on the flip side of that, one of my takeaways is this general trend that we’ve had over the past 50 years towards this acceptance of bigness, both among our governmental institutions, among political figures, and among the public.
Although I think what we’ve talked about a lot at ILSR is that this has really been changing in the last four years. Especially since we’ve had new people in both the administration with Joe Biden and in the Federal Trade Commission with Lina Kahn, who are totally changing this framework.
But unfortunately, because we’ve gotten so far along this path of bigness and supporting big entities, and that’s why we have this season talking about these mergers and about bigness. We’ve become so accepting of this profit motive and the money that these massive institutions continue to make and that they really are putting profit over people.
And we have… Every person on our episode has said this. We haven’t mentioned Miguel Escoto, who is down in Texas, who talks about the oil and gas industry in Texas. And how JP Morgan, one of the biggest banks, backs this infrastructure investment firm, which has a ton of investment in the oil and gas industry.
And so just the idea of bigness that that is, I guess, the foundation of bigness being profit and money, that if that is your value system, if that’s really your only value system, it’s wrong because you’re not putting people or community in front of that.
And so I think it really goes to your takeaway, Reggie, which is that can’t be what we’re placing first. And if it is, there’s an issue because you’re not having those community composters. You’re not having people like Dior who are making these amazing composting songs and people like Miguel who are building these amazing grassroots coalitions.
Reggie Rucker: So I think we’re starting to see some of this stuff change. And there’s the Kroger Albertsons merger. And we don’t exactly know what’s going to happen there, but definitely feeling a greater sense of skepticism around that merger. Within the last year, it was the Penguin Random House and Simon & Schuster merger that got blocked.
And so I think there is a greater sense of, it’s not just about how much money can these companies make if they merge or save if they merge, or it’s not just about profit. It is about the impact to producers and the people who bring so much goodness into our life. How do we create an economy and markets that work for everyone and local producers and all producers, not just the big guys?
Luke Gannon: Well, thank you so much, Reggie, for rounding this season out with me. It’s always a pleasure getting to work alongside you. And I really want to thank our guests this season who made each of these episodes possible. Thank you. And if you’ve made it this far, I assume that means you enjoyed this episode and maybe even the whole season.
If you did, at dinner tonight or over coffee tomorrow morning, tell your family and friends about How to Get Away With Merger. What did you learn? What were your takeaways? And then if you’re feeling so inclined, send us an email at buildinglocalpower@ilsr.org and share your thoughts. We are trying to make every episode better and more engaging, so we’d love to hear from you.
This is our last episode for 2023. We need your support to keep this podcast going, so if you can give us $1, $10, $100, more or less, or anything in between, we’d sincerely appreciate it. Every dollar counts. This marks the conclusion of our season, but be sure to stay tuned for our upcoming hyper-focused short seasons starting in the new year.
Each season will take you to a different city exploring how it is cultivating robust local economies through various lenses. This show is produced by Reggie Rucker and me, Luke Gannon. This podcast is edited by Andrew Frank and me, Luke Gannon. The music for the season is also composed by Andrew Frank. Thank you so much for listening to Building Local Power.

Like this episode? Please help us reach a wider audience by sharing Building Local Power with your family and friends. We would love your feedback. Please email buildinglocalpower@ilsr.org. Subscribe on the podcast platform of your choice.

 

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Music Credit: Andrew Frank

Photo Credit: Em McPhie, ILSR’s Digital Communications Manager

Podcast produced by Reggie Rucker and Luke Gannon

Podcast edited by Luke Gannon and Andrew Frank

Copyright 2016 Licensed under a Creative Commons Attribution Noncommercial (3.0) license.

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Luke Gannon is the Research and Communications Associate for the Independent Business team.

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As Communications Director at the Institute for Local Self-Reliance, Reggie develops communications strategies and leads campaigns to build public support for ILSR local power initiatives. Contact Reggie with media inquiries.

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