Brand Wars: Why Trademarks Are the True Battleground in Entertainment M&A

By Jay Kotzker

When Adidas ended its partnership with Kanye West, the story dominated business and culture pages alike. Billions in projected Yeezy revenues evaporated almost overnight, not because of physical factories or distribution channels, but because the brand itself became radioactive. Similarly, Nike’s ongoing dispute with StockX over sneaker authenticity underscores how fragile—and how valuable—trademarks are when reputation, consumer trust, and billions in enterprise value are on the line.

These high-profile clashes highlight a truth corporate dealmakers sometimes overlook: in entertainment and fashion transactions, trademarks and the goodwill they carry often eclipse every other asset on the table. The streaming rights, supply agreements, or inventory may draw attention, but it is the strength—or weakness—of the brand that ultimately makes or breaks a deal.

Why Trademarks Drive Enterprise Value

In an age where audiences stream content and consumers chase logos, entertainment and fashion companies live and die by the distinctiveness of their brands. A strong trademark signals quality and authenticity; it anchors licensing deals, drives collaborations, and secures customer loyalty across borders. Investors know that a recognizable brand can command outsized pricing power and open doors to lucrative partnerships.

That means in many transactions, the “crown jewels” are not factories or catalogs, but word marks, logos, and trade dress. Without clear rights to those assets, the rest of the deal is just packaging.

The Pitfalls Buyers Must Spot

Even valuable brands come with hidden risks:

• Overlapping or Conflicting Rights: Two companies using similar names in different markets can create global headaches when deals expand across jurisdictions.
• International Knockoffs: A hot fashion label at home may already be widely counterfeited abroad, eroding margins before the ink on an acquisition dries.
• Weak Enforcement History: If a company hasn’t consistently policed its marks, those rights may be diluted or unenforceable—turning a supposed crown jewel into a paperweight.

Each of these pitfalls can undermine the very value a buyer thought it was acquiring.

Lessons from Pop Culture

• Adidas v. Kanye/Ye: Partnerships can turbocharge brand value, but they also expose buyers to reputational risk. When a celebrity collaborator implodes, the brand owner pays the price.
• Nike v. StockX: Resale platforms and digital marketplaces create novel trademark challenges, testing whether traditional enforcement strategies still work.
• Celebrity Brands and Collabs: From Rihanna’s Fenty to Kim Kardashian’s Skims, brand value increasingly depends on personality-driven goodwill. Deals must account for how those relationships are structured, licensed, and terminated.

Each case illustrates that brand perception isn’t just a marketing issue—it’s a legal and financial reality that shapes M&A outcomes.

The Diligence Imperative

For acquirers and investors, testing brand strength should be as central as reviewing financial statements. This includes:

• Verifying the chain of title to every trademark.
• Reviewing international registrations and pending applications.
• Assessing the company’s enforcement track record against knockoffs and infringers.
• Scrutinizing licensing and collaboration agreements to confirm the brand hasn’t been diluted or encumbered.

Done well, diligence ensures that the “brand story” driving deal value is backed by enforceable rights, not just hype.

Takeaway

In entertainment and fashion M&A, trademarks are not window dressing—they are the battlefield. Buyers who fail to probe the strength of a target’s brand risk paying for an illusion. Those who invest in careful diligence, however, gain more than logos and labels—they acquire the very assets that command loyalty, pricing power, and long-term enterprise value.

At Holon Law, we help clients navigate the intersection of brand, IP, and corporate transactions—so when the next “brand war” makes headlines, you’re on the winning side.