Sun Valley Preview: What the Moguls Will Be Talking About at Billionaires’ Retreat

Sun Valley Preview
Fausto Montanri

If ever the atmosphere was ripe for dealmaking at Allen & Co.’s annual gathering of moguls in Sun Valley, Idaho, this is the year.

Key players in the megabucks M&A activity that has made headlines in recent months will be rubbing elbows in the confines of the Sun Valley Lodge and its posh surroundings during the conference, which begins July 10 and runs through the weekend, when Warren Buffett will hold court with his annual Q&A.

Participants will surely keep a close eye on the movements of Comcast’s Brian Roberts, Disney’s Bob Iger and Fox’s Rupert Murdoch for hints of a resolution to the Disney-versus-Comcast brawl over large portions of Murdoch’s media empire. CBS Corp. chief Leslie Moonves will be on hand, as will the subject of the lawsuit CBS unleashed in May on its controlling shareholder, Shari Redstone of National Amusements. CBS and National Amusements’ Viacom are prime targets for buyouts in this moment of consolidation, which means Redstone’s meeting list will be monitored with great interest, especially if she’s seen in the vicinity of AT&T’s Randall Stephenson and Amazon’s Jeff Bezos; those two companies are rumored to be prospective suitors for CBS.

Moonves’ counterpart at Viacom, Bob Bakish, is reportedly skipping the Sun Valley confab out of anger at how the bank handled the auction of Scripps Networks Interactive last year. Undoubtedly David Zaslav, the Discovery CEO who snared Food Network, HGTV and other Scripps channels, won’t be able to contain his enthusiasm for the marriage of cable brands consummated earlier this year.

Others who could be in the mood to plant the seeds of a deal or two in the bucolic setting include Peter Chernin, Liberty Global’s Mike Fries and Greg Maffei, WndrCo’s Jeffrey Katzenberg, Grupo Televisa’s Emilio Azcárraga Jean and investors Haim Saban and Casey Wasserman. Rumblings of changes afoot for media and tech companies large and small will keep the conversation humming. One big focus of attendees will be gauging the appetite among tech giants for traditional media acquisitions.

“Everybody wants to know what’s next,” said a prominent industry executive who has been attending the conference for more than a decade. “The [conference] agenda always puts out a lot of public policy issues and social issues, but this year people are going to want to talk about deals. It’s just in the air.”

Yet, larger market forces may put the brakes on some of the most ambitious dealmaking. President Trump’s threatened tariffs are sparking fears of a recession, China’s economy appears to be sputtering and the Dow has started the second half of the year down triple digits.

“There’s a school of thought that the market is tired and topped out,” said Hal Vogel, a veteran media analyst. “When you’re looking at the valuations of these companies and seeing what Comcast and Disney are willing to pay for Fox, we’re entering a kind of Twilight Zone. These deals don’t happen at the bottom of the market.”

Still, each encounter, every shared bike ride, coffee run or leisurely lunch on the resort’s Alpine-inspired porches, takes on major significance. That’s partly because of Sun Valley’s history as a breeding ground for big deals — Disney’s 1995 acquisition of ABC/Capital Cities, Comcast’s 2011 takeover of NBCUniversal and Bezos’ 2013 purchase of The Washington Post were all hatched at this mountain idyll.

Now in its 35th year, the Sun Valley conference is designed to be a getaway for the media titans, investment gurus and assorted dignitaries invited to the closed-door retreat. It’s a chance for the Igers and Roberts and Redstones of the world to ditch the power suits for shorts and polos, as biking, hiking, fishing and other recreational pursuits are built into the schedule. It’s also the rare instance in which Facebook chief Mark Zuckerberg, perpetually clad in T-shirt and jeans, doesn’t look underdressed.

Despite the high-wattage attendees, Allen & Co. strives to keep the event low-key and guarded by an array of intimidating security personnel and topiary that seems to grow larger every year. Many have christened the week “summer camp for billionaires.” Reporters are kept behind barriers, with the exception of a few star journalists such as Andrew Ross Sorkin or Evan Osnos. But it’s possible to observe the comings and goings of the assembled moguls.

This time around, with so many deals in progress or winding through the courts (in the case of CBS), the close quarters among so many CEOs raises the potential for insider trading or other improper behavior. But experts say Securities and Exchange Commission guidelines don’t prohibit the private assemblage of this many market movers, even if it raises eyebrows.

“People try to get access to public company information all the time through meetings with management or calls to investor relations, but the concentration of power brokers heightens the possibility of improper exchanges of information taking place,” said attorney Peter Altman, a partner at Akin Gump. “That’s what’s potentially problematic.”

In recent years, traditional media companies have seen their business models upended by new distribution services and Silicon Valley players, but there are thunderclouds on the horizon for the disruptors and the disrupted alike. Big data has become a buzz word, with the likes of Google and Facebook promising that the information they collected on customers only allowed them to improve the user experience by presenting them with ads for products they wanted or needed.

That benevolent vision is being challenged. In March, it was revealed that Cambridge Analytica, a polling firm linked to the Trump campaign, had improperly acquired private data on millions of Facebook users. The blowback was substantial, with Zuckerberg hauled before Congress for a Capitol Hill grilling and the U.S. Trade Commission announcing an investigation. Since that time, Facebook has unveiled an elaborate marketing campaign pledging to do “more to keep you safe and protect your privacy,” and the European Union has implemented stricter regulations for companies that collect information on customers. But the damage may be lasting.

“There was this narrative of ‘We’re going to connect everybody, and there will be peace on Earth,’” said Vogel. “Well, guess what — there’s a sinister side to big data, and Facebook and Google are finding the environment for them is not as friendly as it used to be.”