Disney-Comcast battle for Fox dominates Sun Valley gathering
Masayoshi Son said he had no money for deals (ahem), Comcast’s Brian Roberts had nothing to say and Steve Case gave advice on how not to do a deal (remember AOL-Time Warner?).
Media and tech titans turned up in good spirits at the billionaire’s summer camp at the Sun Valley Resort in Idaho, even though the U.S. just started a trade war with China and their private jets faced the worst delays within the continental U.S. on Tuesday. They gave little away, as Allen & Co.’s annual conference officially kicked off with a Western-themed, early evening barbecue.
The buzz this year is the battle between Walt Disney Co. and Comcast Corp. for 21st Century Fox Inc.’s entertainment assets, which includes properties ranging from “The Simpsons” to “X-Men.” Right now, Disney appears to be the closest to sealing the deal with its $71.3 billion cash-and-stock offer, but things could change depending on whether further talks take place at the mountain retreat.
Fox Chairman Rupert Murdoch arrived with his wife, Jerry Hall, and News Corp. Chief Executive Officer Robert Thomson. Comcast’s Roberts, driven into the resort by his Chief Financial Officer Michael Cavanagh, offered a cheerful wave to reporters but said he had nothing to say other than pointing out that it’s “a beautiful day.”
Early on Wednesday, Fox boosted its bid for Sky, in the related bidding war with Comcast taking place in the U.K. Heading into a panel discussion shortly after the offer was revealed, Rupert and his son, Fox co-chairman Lachlan Murdoch, were keen to pass the buck on how high the price could go in the race for the company’s entertainment assets, both giving the same response: “Ask him!”
The deal drew commentary from Discovery President David Zaslav, who speculated about what Fox’s high valuation means for his business. “I think the Street is probably going to take another look at us,” Zaslav said. “We’ve been aggregating IP globally for a long time.” The higher the price for Fox, “the more we think we’re undervalued,” he said.
SoftBank Group founder Son, for one, ruled himself out of the race for traditional media assets, enthusing instead about artificial intelligence, the Internet of Things and robotics as areas of investment for his Vision Fund, which is close to reaching $100 billion. Son said he’s “meeting a dozen guys” at the conference, but remained coy on deal prospects. “I have no money,” said the businessman worth $14.3 billion, according to the Bloomberg Billionaires Index.
The annual conference is famous for incubating some of the biggest deals in the industry, including Disney’s 1995 purchase of ABC/Capital Cities and the ill-fated merger between America Online and Time Warner Inc. Case, AOL’s former AOL chairman, had some advice to dispense based on his own experience with what’s been described as one of the worst – if not the worst – merger in history. “Vision without execution is hallucination,” he said, quoting inventor Thomas Edison. He said focusing on people and culture were important for a merger to succeed.
Perhaps no one understands better the importance of resolving social issues in a deal than Shari Redstone, whose family investment vehicle National Amusements Inc. controls CBS Corp. and Viacom Inc. – two companies she might like to see back together.
Instead, she’s locked in a legal battle with CBS’s board, which is trying to strip NAI of its control over the company. CBS CEO Les Moonves and the board have said it might be better off merging with an alternative partner. Redstone, who arrived sporting a black backpack and was seen heading to evening functions with former Disney boss Michael Eisner and his wife, remained tight-lipped about her battle. Moonves, one of the later executives to reach the resort, also declined to comment.
Perhaps the two will catch up over some of the group activities scheduled daily for guests at the invitation-only conference, including hiking, tennis and horseback riding. There’s also whitewater rafting on Wednesday and a golf tournament Friday.