ViacomCBS chair Shari Redstone in a pink cardigan and black backpack, NBCUniversal CEO Jeff Shell in short sleeves, Discovery chief executive David Zaslav in dark shades and a signature vest and Comcast CEO Brian Roberts pulling up in a car – these are of some of the first shots of media moguls arriving in Sun Valley, Idaho for the Allen & Company conference.
The annual ritual of whitewater rafting and shop talk by titans of media and tech skipped 2020 due to Covid but is back this year in a pared down version with no kids, mandatory vaccines and testing and many sessions outdoors. With fewer family outings, moguls may have more together time to mull potential deals in the midst of a wave of M&A that many in Hollywood and on Wall Street expect to continue.
Within one week in May, WarnerMedia and Discovery announced a combination, and Amazon unveiled plans to acquire MGM — a reflection of a momentous year as streaming exploded with major disruptions in the television and theatrical landscape. Earlier today, in fact, Universal announced that its sister streamer Peacock will assume the studio’s pay TV partnership in 2022 when its current deal with HBO expires.
Zaslav, who is set to helm a merged WarnerMedia Discovery when that agreement closes (expected sometime next year) told CNBC’s Julia Boorstin – who was on site to greet arrivals Tuesday afternoon – that, “We’re not done yet.” He said he’s looking forward to talking with Shell and Shell’s boss Roberts. The media, cable and broadband giant that also owns Sky is said to have been interested in WarnerMedia too.
Wall Streeters have speculated that 1) another bidder could possibly step in before the deal closes, and, 2) a standalone WarnerMedia Discovery could itself become a bigger, juicier new target.
Zaslav indicated, however, that he he’d likely be a buyer. “We are just about great content, great talent, taking it around the world in every language, so I think that gives us an advantage,” the CEO told CNBC. “But I do think there will be more consolidation.”
“We want to get his this done, but over time I think there are a lot of assets out there that have good IP that will probably find homes.” He also told Boorstin said he’s looking forward to an Allen-hosted tete a tete with WarnerMedia CEO Jason Kilar, whose role at the combined company hasn’t yet been determined.
Also attending this year’s edition of what’s been called summer camp for billionaires at the secluded woodland mountain resort are, among others: Apple CEO Tim Cook and the giant company’s senior VP of Internet Software and Services, including Apple TV, Eddy Cue; Facebook founder and CEO Mark Zuckerberg and COO Sheryl Sandberg; Disney chief executive Bob Chapek and outgoing chairman Bob Iger; Netflix co-CEOs Reed Hastings and Ted Sarandos; Alphabet CEO Sundar Pichai; Amazon’s newly installed new CEO Andy Jassy; and Microsoft CEO Satya Nadella and founder Bill Gates.
There are big names from the sports and gaming world, major investors like Warren Buffett and an assortment of journalists including Gayle King of CBS News. Generally, however, the roster appears overwhelmingly white and male despite recent investor focus on equity and inclusion and a national spotlight on issues of race.
Sun Valley is a forty-year tradition for Allen & Company, a family-owned New York boutique investment bank that’s worked on some of the media and tech industries’ biggest deals. The conference itself is said to have planted the seeds for mergers from Disney buying CapitalCities/ABC in 1995 to Amazon founder Jeff Bezos’ acquisition of The Washington Post in 2013.
As for what’s next — “Clearly, the two companies everyone is focusing on are ViacomCBS and Comcast,” said Naveen Sarma, Senior Director of S&P Global Ratings.
Comcast execs have reiterated over the past month that it doesn’t need to do anything. “If you think of them as a cable company with media that’s an offering that helps support the distribution business, they don’t necessarily need scale to be able to do that,” agreed Sarma. “If they want to compete globally against Netflix or Disney, yes they need scale.”
He said “ViacomCBS is in a different boat because they don’t have other business to rely on. But unless they want to be global, they can get away with being smaller.” (ViacomCBS Bob Bakish isn’t attending.)
“It takes time before management teams realize they don’t have the scale and they throw their hands up,” Sarma said.