Media moguls downplayed the impact of the China stock market crash and the debt crisis roiling Greece at the Allen & Co. conference in Sun Valley, Idaho, this week.
“I’m not worried,” said IAC/InterActive Corp. chairman Barry Diller. “Markets go up and down. The Chinese have a lot of production that they make.”
Others, such as, Walt Disney Company CEO Bob Iger, said he was attuned to the problems impacting both countries, even as he stressed he was not overly concerned. “Any time there are issues economically, because we touch so many markets, we obviously think about it,” said Iger. “But we’re not really seeing any impact from Greece and the China output remains robust.”
Not everyone was as loquacious. 21st Century Fox chairman Rupert Murdoch tossed off that he didn’t know anything about the Chinese stock market, while Comcast CEO Brian Roberts gently deflected questions about the downturn in the Asian country by gesturing to a copy of the New York Times he was carrying.
“I’m going to read about it right now,” he said.
While media barons argued that their businesses would not be overly impacted by financial calamities an ocean away, analysts argue that China in particular remains a critical source of revenue for companies looking to compete in a global marketplace. If stocks don’t begin to battle back from their 30% nosedive, it could spell trouble.
“China is clearly the second most important market in the world,” said Marla Backer, an analyst with Research Associates. “It’s a function of how long [the crisis] lasts and if there is a ripple effect.”
One thing is clear, the stock swoon has cast a shadow over a section of the world that entertainment executives were recently falling over themselves to talk up. At most of these gatherings, they seemed to compete with each other about who could be the most effusive about China’s burgeoning middle class and insatiable appetite for American culture.
“People may not have been sufficiently realistic about the potential volatility,” said Backer. “When there is a sense of euphoria about a market we tend to see that same kind of negative overreaction on the downside.”
China has become the world’s second biggest source of box office revenue, pushing hits like “Furious 7” and “Avengers: Age of Ultron” into blockbuster territory. It’s less important for smallscreen companies, Discovery Communications CEO David Zaslav told reporters. Programming runs through television channels that are controlled by the Chinese government, limiting the ability of Discovery and others to brand their content.
“Most of us have very little exposure in China,” said Zaslav.
Executives maintain that Greece, which is under pressure after its citizens rejected proposed austerity measures from its creditors, remains a small market. Some investors expressed hope that the the Greek government would come to terms with other members of the Eurozone about cuts it needs to make to government spending before it gets more assistance or runs out of cash. If that happens, the worry is that it could send shockwaves throughout much of Europe.
“I think they’ll come around,” said investor Ken Langone. “They’re letting other people pay their pensions.”
When not worrying about financial catastrophes around the globe, guests at this year’s conference spent the first full day hearing a talk by Tesla Motors chief Elon Musk on space travel and driverless cars. One guest called the discussion about the future of transportation and technology “inspiring,” while another griped that it was overly wonky.