Sun Valley Forecast: Cloudy With a Chance of M&A

Sun Valley Forecast: Cloudy With Chance

A well-known mogul who shall remain nameless for the purpose of this unflattering anecdote contacted me several years ago just weeks before the Allen & Co.’s annual Sun Valley gathering for media and tech luminaries, which is underway this week in Idaho. The mogul in question was going to be in Sun Valley in hopes of securing a key deal and was hoping some coverage in Variety about the subject of the deal would help. Would I be willing to write about it?

The truth was there really wasn’t anything new to say about the asset in question. But as Mogul X started reeling off the list of names of executives who would be met with that year in Sun Valley regarding Asset X, the justification for coverage became clear to me: If a potential deal was going to be discussed with some pretty important people, I reasoned, wasn’t that in and of itself “news”?

You know what happened next, right? I wrote the article about the potential pact, and no such deal ever materialized. I confirmed discussions at least took place with several of the people Mogul X talked to just to make sure my leg wasn’t being pulled, but their substantiations also made clear nothing went beyond the most preliminary of tire-kicking.

So it goes in Sun Valley, where perception and reality aren’t always two of the same. It’s hard not to be intoxicated by the very notion of this gathering of 1-percenters — aptly dubbed Summer Camp for Billionaires — ensconced in a bubble of luxury as the event picks up again after a pandemic-imposed hiatus. But the truth of what’s actually going on up there can be a little difficult to separate from all the mystique.

From Facebook’s Mark Zuckerberg to Netflix’s Ted Sarandos, the A-list is well represented again this year. Even the mogul of moguls, Amazon’s Jeff Bezos, is a regular attendee; perhaps he contemplated shipping his Blue Origin rocket to Sun Valley for liftoff there rather than waiting until later this month.

Such a stunt would underscore the essence of what Sun Valley is about: getting attention.

With such high concentrations of powerful people in one isolated region of the country, no wonder there are plenty of reporters on the ground to track their movements. And this is where the perception-reality disconnect starts to happen: Reporters don’t have access to the event itself, so they rubberneck at the outskirts of the conference, ogling the moguls from a distance.

Occasionally you’ll see a media baron or two who might issue a few brief verbal nothingburgers to the assembled press as they wait for the valet to remove their golf clubs from the trunk of their Uber Lux in front of the hotel. But journalism in Sun Valley rarely gets more substantial than that.

Which is to say there’s never any direct observation of what’s actually going on, but there’s a presumption that just the mere rubbing of elbows by such an elite fraternity must mean something of consequence is occurring.

This year in particular, it’s difficult not to leap to conclusions about all the dealmaking supposedly taking place because the climate is thick with anticipation right now about M&A in media and tech. Allen & Co. could not have scheduled the WarnerMedia-Discovery and Amazon-MGM transactions of recent months any better in terms of instilling the conventional wisdom that more shoes are about to drop.

That’s why you have to keep an eye on the likes of ViacomCBS’ Shari Redstone and Comcast’s Brian Roberts. No two companies seem more primed to make a big M&A move — quite possibly with each other — in order to improve their companies’ underwhelming positions in the streaming wars.

ViacomCBS stock has been on a roller-coaster ride over the past six months, soaring on the wings of unrealistic expectations for Paramount+ in the first quarter of the year, only to lose nearly half its value in the following quarter. However, the stock popped 12% two weeks ago once Wall Street began anticipating a deal.

Tongues will surely be wagging if Redstone or her ViacomCBS CEO, Bob Bakish, are photographed in Sun Valley. But let’s not jump to any conclusions about any potential dealmaking. What they’re actually doing at the event remains a mystery, and their objective for being there may not be anything beyond the self-aggrandizement in which any self-respecting mogul must indulge.

Ever the keen observer of obscene wealth, the Showtime drama series “Billions” satirized Sun Valley in an episode during its fifth season (which is scheduled to return in September), as carnivorous billionaire Bobby Axelrod addresses attendees of a fictional Sun Valley-esque conference, brilliantly capturing the essence of this rarefied event.

“You’re either in Sun Valley or you don’t exist,” Axelrod declaims. “But what goes on there or here doesn’t matter at all. It’s not about the conversation, it’s the invitation.”