Allen & Co.’s annual gathering of media and technology barons in Sun Valley, Idaho, known as “summer camp for billionaires,” is a chance for the 1% to break out the Brooks Brothers casual and relax. But between rounds of golf, guests play let’s make a deal. After all, some of the biggest mergers — a collection that includes the marriage of Comcast and NBCUniversal, as well as the disastrous coupling of Time Warner and AOL — were hatched at the Idaho ski resort. Here are five issues sure to be hot topics at this year’s July 7-12 conference.
Charter’s play for Time Warner Cable is expected to set off a fresh wave of hookups in the pay-TV space. The issue is scale. The industry already has a giant in Comcast, which failed in its recent bid for TW Cable. With the Charter deal, another colossus would rise. Disney, 21st Century Fox and NBCUniversal can push back, but what of smaller companies like Discovery Communications and AMC Networks? How will they contend with massive distributors who will have more power to set the terms and prices for programing?
Anyone Want to Buy a Studio?
Disney, Warner Bros. and Universal are all armed with top-tier franchises, so it’s difficult for midsize studios to punch above their weight. MGM, Lionsgate and DreamWorks Animation lack deep-pocketed corporate parents, making them attractive prospects for acquisition.
A Family Affair
The Murdoch clan is a Sun Valley staple. Expect them to be on display now that Rupert has ceded control of 21st Century Fox to sons Lachlan and James. The brothers will govern the entertainment industry giant as a pair, so it’s essential they put on a show of solidarity to assuage investors who worry that sharing command is a recipe for power struggles.
Consumers are glued to smartphones, but keeping them hooked may require more megadeals like AT&T’s $45.8 billion play for DirecTV and Verizon’s $4.4 billion AOL pact. Both moves were seen as aggressive attempts to corner the streaming-video market, but they won’t begin to satisfy content cravings. Look for telecom companies to break out the checkbook.
Meet the New Boss?
Many media companies are bracing for leadership transitions. Thomas Staggs seems positioned to take over for Bob Iger at Disney, while plans have been made for succession in a trust that controls National Amusements, the company backed by the family of Sumner Redstone and through which he controls CBS and Viacom. But all media firms need to ponder succession plans, making sure not only that the current CEO is best to lead, but that their bench is strong, too.