Published July 06, 2012
A fresh sense of dealmaking excitement should permeate Idaho's mountain air next week when media and technology moguls descend on remote Sun Valley for their annual conference, which in recent years has been as sleepy as the town for which it is named.
The latest moves made by News Corp, Vivendi and Liberty Media signal a shifting landscape of opportunities for snatching up assets as media companies navigate new entertainment platforms, a soft economy, turmoil in Europe, and the upcoming U.S. presidential election.
The 30-year-old conference, hosted by boutique investment firm Allen & Co has consistently attracted heavy hitters and spawned blockbuster deals including Disney's $19 billion acquisition of Cap Cities/ABC in 1995. However, with the exception of Comcast Corp's 2009 purchase of NBC Universal, few major tie-ups have come out of Sun Valley in recent years.
That may change at this years event, which runs from July 10 to July 14 at the Sun Valley Resort. Developments in just the past few weeks have industry watchers predicting media companies will peel away more assets while they jockey to grab consumers' attention as entertainment options swell.
Most notably, News Corp's board approved a plan to split the $60 billion conglomerate into two publicly traded companies, one focusing on entertainment and the other on publishing, with the Murdoch family controlling both. News Corp (NWS) Chief Executive Rupert Murdoch and his children - James, Lachlan and Elisabeth - are expected at Sun Valley amid speculation over their roles in the new companies.
"I think it'll be more provocative this year. There will be more discussion about whether these bigger conglomerates start breaking up. It'll be the topic du jour considering what happened with News Corp," said Todd Davison, Morgan Stanley's co-head of media investment banking for North America.
Between whitewater rafting and hikes in the scenic Pioneer mountains, executives attending the so-called "summer camp for moguls" have the chance for high-level talks about possible sales or collaborations.
Close attention will be paid to who lunches together, chats over cocktails, or huddles with the venture capitalists and private equity chiefs expected to attend, including Marc Andreessen of Andreessen Horowitz LLC and Henry Kravis of Kohlberg Kravis Roberts & Co.
Other media titans whose private jets are expected to clog the small airport's runway include Disney (DIS) Chief Executive Bob Iger, talk show queen turned network executive Oprah Winfrey, and Time Warner CEO Jeff Bewkes, according to a list of attendees obtained by Reuters.
Facebook (FB), one of the most closely watched and highly anticipated companies to go public, fell flat with its IPO in May after technical glitches on the Nasdaq and questions about its ability to increase advertising revenue. The fallout from Facebook's public debut and how that will affect other tech companies' plans of going public will certainly be a topic of conversation among the moguls.
So will the fate of Yahoo (YHOO), an Internet icon that is struggling to regain its leadership status after being usurped by Google (GOOG), Facebook, Apple (AAPL), and others. Yahoo's interim CEO Ross Levinsohn is currently on the guest list, but he may not make the event due to the annual meeting of Yahoo shareholders next week while former Yahoo CEOs Jerry Yang and Terry Semel are also expected to attend the conference.
Apple CEO Tim Cook appears on the guest list, but the iPhone maker has not confirmed whether he will attend. His predecessor, the late Steve Jobs, shunned the event, though his widow, Laurene Powell Jobs, is listed among this year's guests.
Even if Cook does not attend, the next version of Apple TV will be on the minds of media executives.
"I'm sure there will be lots of speculation with the full version of Apple TV. If and when that happens, that will have a major impact on how Internet video is consumed in the living room," said Ken Allen, director in Blackstone's technology advisory practice.
Vivendi, the French media conglomerate, could be looking to unload some assets now that longtime CEO Jean-Bernard Levy has stepped down.
One Vivendi asset widely considered to be ripe for disposal is its 60 percent, or $8 billion stake, in U.S. video game publisher Activision Blizzard, whose CEO Bobby Kotick, a Sun Valley conference regular, is registered for this year's edition as well.
The company could also spin off Moroccan telecom company Maroc Telecom or mull a Murdoch-style split of its business into a telecom and media arm, analysts and bankers have said.
Lucian Grainge, the head of Universal Music Group, another Vivendi asset, will also be in attendance as his company continues its battle for regulatory approval of EMI Group.
John Malone, the CEO of Liberty Media is expected, as his media holding company tries to seize control of Sirius XM Radio (SIRI), the satellite radio provider it floated a $530 million loan to in 2009 to help it avoid bankruptcy.
Television and film producers also may be looking for new avenues to sell their content as online players try to bolster their offerings.
"The content companies are in the best position. They just need to continue to figure out the best way to monetize their content through new mediums," said Jonathan Boyar, managing director of Boyar Value Fund, which owns shares of Cablevision Systems (CVC), CBS Corp (CBS), Time Warner (TWX) and Comcast (Cablevision Systems).
The November presidential election is "another source of uncertainty in terms of what sort of regulation we'll have, what the tax outlook will look like, what the healthcare will look like," said Blackstone's Allen.
(Reporting By Liana B. Baker in New York and Lisa Richwine in Los Angeles; Editing by Peter Lauria and Alden Bentley)