The ground may be moving under the feet of media and entertainment business, but the shifting tectonic plates didn’t result in any earth-shaking deals at the Allen & Co. conference in Sun Valley, Idaho.
Unlike last year, when the annual gathering of moguls and billionaires unfolded as 21st Century Fox made a not-so-stealth play for Time Warner, no big deals have overshadowed the weeklong event. Well, there might be big deals, but none that the press have gotten wind of — let’s be honest, security is so tight at the mountainside retreat that Google could be plotting to annex Minnesota without the Fourth Estate catching wind of it.
Media and entertainment companies will continue to grow bigger to protect themselves from threats from new technologies and evolving consumer behavior, moguls argue. It’s practically Darwinian.
“There’s always consolidation,” said Barry Diller, chairman of IAC/InterActiveCorp. “Consolidation is the nature of things.”
Distributors certainly seem primed to remain acquisitive. Charter, for instance, has already announced plans to merge with Time Warner Cable, something that Time Warner Cable CEO Rob Marcus said he expects will take place before the end of the year.
Liberty Media chairman John Malone, the driving force behind Charter’s purchase of the cable giant, told reporters that there are more deals to be done in the content space. After all, it is hard out there for smaller players like DreamWorks Animation or Relativity, which don’t have sprawling media empires to fall back on when a film falters or a project falls through. One of the most frequently discussed unions involves Malone’s Starz cable channel and Lionsgate, in which the media baron took a share, along with a board seat, earlier this year.
“Lionsgate is trying to grow so they have scale and is trying to become more balanced between television and theatrical, so it’s logical for [us] to talk about each other’s needs and desires and where we can create value together,” Malone said. “I just try to stimulate those kind of discussions. Whether or not there are quote-unquote deals of the M&A type, that’s a whole different thing.”
Not everyone was so sure. Discovery Communications CEO David Zaslav said most of the consolidation among content companies has already transpired. He believes the next wave of activity will center around Tiffany brands, akin to what Bob Iger has done at Disney by snapping up Lucasfilm and Marvel.
“I think there’s going to be a big drive toward more IP,” Zaslav said. “IP you can build assets around.”
There were a few murmurs about the possibility of a union between digital giants like Twitter and Facebook, but analysts speculate that the wave of consolidation isn’t ready to touch the social-media world yet. Silicon Valley players still need to figure out how to bolster the revenue they receive from their vast online audience.
“The big thing in 2015 and 2016 is going to be a race to create new products and monetization opportunities and after that cash grab, we’re going to see consolidation,” said Brian Solis, principal analyst with Altimeter Group.
And what of the mountainside event itself? Sun Valley, as it is colloquially referred to among members of the 1% and the people who cover them, cultivates an air of informality among the world’s most formal people. These Masters of the Universe engage in purposeful walk and talks in a setting that rivals the Von Trapps’ backyard, all while trying to look like normal vacationers.
“You can’t help having a good time here,” said Joel Klein, CEO of the education company Amplify, as he walked to a presentation Friday.
Some are better at embracing the vibe than others. Facebook COO Sheryl Sandberg and AOL CEO Tim Armstrong shared a video chat, while super agent Chris Silbermann and former Yahoo head Jerry Yang let cares melt away as they biked around the resort’s grounds. Others, like Viacom CEO Philippe Dauman, seem to approach wearing blue jeans with the delicacy and wariness that early colonists would life on Mars.
This year’s conference also marked a generational shift of sorts. It took place days after Rupert Murdoch elevated his sons James and Lachlan to the roles of 21st Century Fox CEO and executive co-chairman, respectively. One guest said that in between the days’ scheduled talks, the Murdoch progeny were all over the place, meeting with people and exhibiting “a lot of energy” in their new gigs.
The presentations here run the gamut from politics to economics, with brief detours into philanthropy and fashion, depending on who makes up the guest list. Friday’s talks, for instance, included Tom Brokaw interviewing King Abdullah II of Jordan and a panel discussion on turmoil in the Middle East that was led by former CIA chief George Tenet.
There was also a deep dive into the criminal justice system with U.S. Sen. Cory Booker (D-N.J.) and Milwaukee County Sheriff David Clarke, who has been an outspoken defender of police actions that led to the deaths of Freddie Gray in Baltimore and Michael Brown in Ferguson, Mo.
Approached by Variety after his talk, Booker gestured to Klein and his wife, Sony Corp. exec VP and general counsel Nicole Seligman, and said, “I got at least a B minus from two guests.”
“I wouldn’t say it was contentious,” Booker said, when asked if things got heated. “We didn’t get into [the Ferguson situation] as much as we could have.”
“We were certainly told we should abide by the law or else,” Seligman added.
The big news from Sun Valley isn’t the talks themselves. It’s the combustion of dealmaking that transpires simply by putting so many Fortune 500 honchos in the same zip code. That’s what led to Verizon’s purchase of AOL, Comcast’s play for NBC/Universal and Disney’s Capital Cities pact, all of which were hatched at the conference.
The seeds of the next mega-deal may be getting planted right now, but those early talks will only bear fruit long after the last corporate jet leaves the runway in Idaho.
Cynthia Littleton contributed to this report.