8 Momentous Deals Tied to Sun Valley

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Rupert Murdoch

This year's guest list includes Shari Redstone, Philippe Dauman and three Murdochs.

Viacom rivals Shari Redstone and Philippe Dauman have both been invited to the Allen & Co. famous Sun Valley retreat, where media and tech moguls gather each year and sometimes hatch deals.

If both attend next month, they'll surely be the talk of the gathering, outshining invited guests like Apple CEO Tim Cook, Facebook CEO Mark Zuckerberg, Walt Disney CEO Bob Iger and former CFO Tom Staggs, Time Warner CEO Jeff Bewkes, Disney board member Maria Elena Lagomasino and 21st Century Fox's James, Lachlan and Rupert Murdoch, along with Chase Carey and CFO John Nallen.

Also expected is CBS CEO Leslie Moonves, who is generally considered an ally of Shari Redstone more so than he is of Dauman. In an ongoing feud, Redstone's father, Sumner, has ousted Dauman from the board of National Amusements, which controls both Viacom and CBS through its majority of voting shares, and Dauman has sued to be reinstated, accusing Shari of manipulating her 93-year-old dad.

Sun Valley was hatched shortly after investment bank Allen & Co. sold its controlling share in Columbia Pictures to Coca-Cola in 1982, and the very private and exclusive event has been a site for media moguls to casually discuss business possibilities ever since — usually with reporters off in the distance hoping to snag an invitee or two for a quick interview.

One development likely on the minds of attendees involves the bidding process for Yahoo's core business. Tim Armstrong, the CEO of Verizon's AOL unit, reportedly met with Yahoo CEO Marissa Mayer at the Sun Valley retreat two years ago and broached the possibility of an acquisition.

If a Yahoo acquisition agreement gets done at July's Sun Valley event, it will join an auspicious list of big deals that have had their genesis there, with some being more successful than others. Hindsight is 20/20, but the list below could be seen as a cautionary lesson for executives: Don't let the serene and relaxed setting of the retreat cause cause you to be overly agreeable.

1. The biggest deal to likely have originated in Sun Valley is also the worst, by far. In 1999, Steve Case, the CEO of America Online (it changed its name to AOL seven years later) chatted with Time Warner CEO Gerald Levin, with the two imagining what a merger might look like. Six months later, AOL agreed to use its inflated stock to purchase the media conglomerate for $164 billion and, when the deal closed in January 2001, the combined entity was named AOL Time Warner. The merger, at the height of the now-infamous "internet bubble," is considered the worst in U.S. history. In less than three years, "AOL" was stricken from the conglomerate's name and Time Warner had taken a $100 billion write-down because of the merger.

2. At the other end of the scale is Walt Disney's $19 billion acquisition of CapCities/ABC, arguably the most successful of the many deals to have been at least partially hammered out in Sun Valley. Executives from each company attended Sun Valley in July 1995, and three weeks later Disney CEO Michael Eisner announced the merger agreement. When the deal closed, Disney surpassed Time Warner as the biggest entertainment company in the world, measured by revenue. The merger also brought Bob Iger to Disney, given he was president and COO of CapCities/ABC at the time. Iger was named CEO of Disney in March 2005, and the stock is up 320 percent since then.

3. A few years later at the retreat, Eisner's judgment wasn't quite as sound. That's when the Disney CEO learned while hiking near the Sun Valley venue that a rival was about to purchase Fox Family Channel, so he quickly countered with a bid for $5.2 billion, which was roughly $2 billion more than most analysts figured the cable channel was worth. Last year, Disney rebranded the channel, calling it Freeform, with its target audience largely shifting away from families and toward teens and young adults.

4. While Rupert Murdoch's company, then called News Corp., scored a coup with the sale of Fox Family Channel, it didn't fare as well with its next deal that was partially formed at Sun Valley. At the conference there in 2007, MySpace co-founder Brad Greenspan had already made a $1.25 billion offer for a 25 percent stake in Dow Jones & Co. By the end of the weeklong conference, though, Murdoch had struck a deal to acquire Dow Jones, publisher of The Wall Street Journal, for $5 billion, but News Corp. later wrote down half of that cost, indicating Murdoch had vastly overpaid for the acquisition. 

5. At Sun Valley in 2009, Comcast co-founder Ralph Roberts met up with GE chief executive Jeff Immelt and the two talked about NBCUniversal, which was owned by GE and Vivendi. Five months later, a complicated deal involving $6.5 billion in cash and the contribution of vast amounts of programming was announced. Due to regulatory concerns, the deal didn't close until January 2011, resulting in Comcast taking 51 percent of NBCU and GE owning the remaining 49 percent, with an agreement that Comcast would buy GE completely out of its stake within seven years. It didn't take that long, as two years later Comcast said it had agreed to buy GE's 49 percent stake all at once for $16.7 billion. 

6. Three years prior to that momentous gathering, Google's then-CEO Eric Schmidt ran into YouTube co-founder Chad Hurley at the 2006 Sun Valley retreat. Hurley and his friends had only launched the video-sharing service a year prior, but he was already the belle of Sun Valley that year. Three months later, Google said it had agreed to purchase the popular but unprofitable YouTube for $1.65 billion. Hurley's share at the time was valued at $346 million.

7. Prior to the 2000 gathering at Sun Valley, Robert Johnson had already received a $2.3 billion offer, plus the assumption of $600 million in debt, from Viacom to acquire BET, the cable channel he founded in 1980. Before he accepted, Johnson decided to shop BET at Sun Valley, where he huddled with AOL Time Warner then-CEO Gerald Levin, who seriously considered making an offer. After Sun Valley, Johnson headed to the office of Mel Karmazin, then the No. 2 executive at Sumner Redstone's Viacom, and a $3 billion deal to acquire BET was struck.

8. Perhaps the most recent deal of note to trace its beginnings to Sun Valley was initiated at the 2013 event, where Amazon.com founder and CEO Jeff Bezos met up with representatives of the Washington Post. A couple of weeks after the gathering, Bezos said he would acquire the 139-year-old newspaper for $250 million. The acquisition included several smaller newspapers, such as Fashion Washington and El Tiempo Latino, and Bezos put the assets into an entity he created called Nash Holdings. On June 13, GOP presidential candidate Donald Trump revoked the Washington Post's press credentials citing "incredibly inaccurate coverage" of his campaign.

Georg Szalai contributed to this report.

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