Deal Buzz Competes With Streaming Fears as Media Moguls Descend on Sun Valley
CBS-Viacom? Univision-Disney? Starz sale? Mega-mergers and OTT strategies are on the minds of top executives at the Allen & Co. retreat.
Some of the most powerful people in media and technology are arriving Tuesday in Sun Valley, Idaho, for Allen & Co’s secretive gathering, ready to talk deals, politics and, perhaps more than in previous years, potential regulations surrounding social media. The retreat is off the record, but here are the topics likely to dominate discussions among groups large and small, planned or impromptu.
The escalating streaming-media wars. Apple CEO Tim Cook is expected at Sun Valley. In years past, he was usually accompanied by Eddy Cue, senior vp of Internet software and services, who oversees iTunes, Apple Music and more. Apple is readying a competitor to Netflix and needs content, but most of the big media companies aren’t in the mood to license much of theirs because they have current and upcoming streamer services of their own to feed.
Disney CEO Bob Iger was invited to Sun Valley, and he may be most eager to discuss Disney+, the streaming service set to launch in November. Iger has been letting content licenses lapse at Netflix in order to beef up the offering at Disney+, much to the chagrin of Netflix, whose top executives, CEO Reed Hastings and chief content officer Ted Sarandos, may not be at this year’s Sun Valley gathering.
It’s unclear if anyone from WarnerMedia will be in Sun Valley, where former Warner Bros. CEO Kevin Tsujihara was a regular prior to stepping down amid a sex scandal. WarnerMedia is also readying a Netflix competitor, as is NBCUniversal, which is owned by Comcast. Ron Meyer, vice chairman of NBCU, might attend the gathering this year and will no doubt be eager to tout the benefits of his company’s upcoming streamers over those of the others.
Who will buy Univision? The Spanish-language media company said June 3 it is for sale, and Haim Saban, a board member and investor, will no doubt be pitching the company as an acquisition target for a larger conglomerate while attending Sun Valley. Disney could make a viable suitor, says Jimmy Schaeffler of the Carmel Group, given its desire to poke holes in rival Comcast, which owns Telemundo. Plus, Hispanics are a fast-growing segment who already make up 20 percent of the U.S. population.
But Disney is still digesting its $71.3 billion acquisition of most of 21st Century Fox, so it might not have the appetite for Univision. Thus, Saban might have more luck with Shari Redstone, who is attending Sun Valley at a time when CBS and Viacom, both of which are controlled by her and her father, Sumner, are considering a merger, and some on Wall Street speculate the combination might still fall short as conglomerates grow their power, as did WarnerMedia when AT&T scooped it up for $108.7 billion, including debt. Adding Univision into the CBS-Viacom mix might be just what the doctor ordered.
Fox Corporation, made up of the assets Disney didn’t purchase and led by CEO Lachlan Murdoch (also in Sun Valley), might be attracted to Univision for its news and sports, especially since it is set on July 20 to relaunch Univision Deportes Network as TUDN, a multi-platform outlet that will focus on soccer and other sports appealing to Hispanics
But it could be difficult to get much more for Univision than the $12.3 billion its private investors paid for it in 2007. "The Hispanic media story hasn't really worked beyond the nice market share gains for Telemundo at Univision's expense," says Steven Birenberg of Northlake Capital Management.
What about Starz? Neither Joe Ianniello nor Bob Bakish, CEOs of CBS and Viacom, respectively, will be attending Sun Valley this year, but Shari Redstone is likely not only to be pressed about her desire to merge those two but also her interest in Starz, a channel group owned by Lionsgate.
CBS may have already offered Lionsgate $5 billion for Starz, news of which had the parent company’s stock leaping 15 percent in mid-May. While Starz is duplicative of Showtime for CBS, some observers say CBS needs it to compete with HBO, which has 140 million worldwide subscribers, while a combined Starz and Showtime would boast less than 60 million.
Lionsgate paid $4.4 billion for Starz in 2016, so the $5 billion reportedly offered by CBS may not be enough to entice the mini-major studio to part with its steady financial contributor, though Lionsgate clearly needs to do something to juice its shares for investors, as its stock finished 2018 down 22 percent, even though the entire company is considered a takeover target should it not sell Starz off individually.
Writers vs. agents; more Disney speculation. Charlie Rivkin, head of the MPAA, will be at the gathering, perhaps for the last time before the Chinese box office eclipses that of the U.S., as PricewaterhouseCoopers predicts that in 2020 China’s haul will be at $12.28 billion while the U.S. posts $11.93 billion.
And while the feud over packaging fees rages between agents and writers, CAA agent Bryan Lourd might be in attendance and ready to answer questions from an agent’s perspective. The impending IPO of Endeavor Group, which owns the WME talent agency and Ultimate Fighting Championship, may also be a hot topic, though Endeavor executives aren’t expected in Sun Valley as their roadshow has come to a close and their quiet period persists.
Activision Blizzard CEO Bobby Kotick is attending the Sun Valley gathering for the 20th straight year, just in time to squash rumors — or embrace them — that his company is in play. Gerber Kawasaki, a wealth management firm with shares of Activision Blizzard, floated the idea a week ago that Disney should purchase the video game company, which sports a $37 billion market cap.
Social media's slide. Facebook CEO Mark Zuckerberg and COO Sheryl Sandberg are expected guests at a time when some are still blaming (or crediting, though not so much in this crowd) Facebook with helping to elect President Donald Trump.
Beyond talk of Facebook spreading “fake news” and sharing sensitive data with the likes of Cambridge Analytica and others, regulators on both sides of the aisle are complaining that Facebook — along with Google — is simply too large and should be broken up.
Facebook, Google and Twitter are also under the gun for allowing hate speech on their platforms — and simultaneously being criticized for de-platforming conservatives who are deemed hateful — so there ought to be plenty of debate on the matter.
Sen. Ted Cruz of Texas, in fact, will be discussing alleged bias among the social-media giants this month at a hearing where Dennis Prager will speak, as the radio host is suing Google’s YouTube for restricting dozens of his educational videos. (Prager also teamed with Adam Carolla for a movie about that topic, and free speech in general, called No Safe Spaces, set for release in September.)
Executives from Google and its YouTube asset, and from Twitter, may not be at the Allen & Co. event, leaving the Facebook executives to bear the brunt of questions concerning the controversies surrounding social media when they inevitably arise.