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The corporate jets will soon be hitting the runway at Friedman Memorial Airport, 18 miles south of Sun Valley, Idaho. That's the swank resort where the 18th annual Allen & Co. conference begins Tuesday, July 11. For those who don't follow this annual CEO lovefest, it's the year's high point for media titans with heavyweight ambitions to strike merger deals somewhere between the horseback-riding trails and the buffet line.
Herb Allen, the host of the event, has invited more than 150 guests. News Corp. Chairman Rupert Murdoch will be there with an entourage that includes his sons Lachlan and James. Disney Chairman Michael Eisner will attend, as will Microsoft's Bill Gates. Steve Jobs is representing the
Pixar Animation studios he heads when he isn't making Macs. Execs from America Online, Yahoo!, and Hewlett-Packard will make presentations.
But the real subject of this confab, as usual, will be who'll be buying whom. I mean, this is where Eisner first got the idea to scoop up CapCities/ABC. Legend has it that the notion was spawned as he watched CapCities Chairman Tom Murphy hustling off to a golf game with Warren Buffett. It's also where Ted Turner first decided to get into Hollywood -- quickly striking deals to buy New Line Cinema and Castle Rock Productions.
ORBITING SATELLITES.
So, in keeping with the Allen & Co. mood (and because Herb Allen has decided this year to keep us press folk miles away), here's one reporter's notion of what kind of deals will likely be discussed over mixed drinks and cocktail franks.
For starters, it probably won't be long before former cable maven John Malone finds his way over to Murdoch. Malone owns 8% of News Corp., and the two men, who dearly love to mix things up, have been rumored to be interested in buying GM's DirecTV satellite operation. I figure these moguls will toss around possibilities, like using the equity that Murdoch plans to raise by selling shares of the new worldwide collection of satellites he has acquired. Both men understand the strength of distribution in the U.S., and both are desperate to find a direct path to consumers' homes. Watch DirecTV's stock start to rise around Tuesday afternoon, July 12.
Off somewhere else, Barry Diller no doubt will be guiding his bicycle somewhere in the vicinity of Pierre Lescure, chairman and CEO of Canal+, a top member of the Vivendi team that just agreed to buy Seagram. Diller wants NBC but has been blocked by Seagram CEO Edgar Bronfman Jr.,
who's a 42% stakeholder in Diller's USA Networks Inc. Bronfman will be going to Sun Valley, too, but he's yesterday's powerbroker. Diller knows a hot hand when he sees it.
CABLE HOOK-UPS.
The most intriguing combination would be a merger between Disney and AT&T. On the surface, it makes sense. Disney -- lacking a cable or satellite unit to ensure that its movies and TV shows aren't blocked -- would dearly love to have a counter to perennial adversary Time Warner's planned merger with AOL. AT&T, on the other hand, is getting its hat handed to it on Wall Street, which wonders what the heck Chairman Mike Armstrong intends to do with that $100 billion worth of cable companies he has bought over the last two years. Hey, Mike, how about more Disney Channel, video-on-demand, and some of Touchstone's better movies?
Paul Allen will be there too, and he has enough money to buy anything he wants. The Microsoft co-founder will likely be spending much of his time with fellow billionaire David Geffen, one of two DreamWorks partners (with Jeffrey Katzenberg) who'll be making the rounds at all the parties. Allen and Geffen have discussed buying Universal Studios and MGM in the past, but both are likely in secure hands that aren't going to change.
With Allen's Charter Communications giving him superfast cable wires to more than 6 million homes, he could land an Internet portal. How about Lycos, which made an ill-fated bid once before to merge with Diller's USA Networks. That deal fell apart over the stock Diller was willing to pay. Allen isn't afraid to pay cash.
SONY-GE-NBC?
Then there's poor Sony, being represented at this shindig by Chairman Nobuyuki Idei and top American guy Howard Stringer, a one-time head of CBS. I figure these two, who have openly talked of spinning off their Hollywood studio in the past, are likely to be looking for a buyer. And they have last year's big-time hit Stuart Little to tout. With the right kind of a deal, they could spin off a piece of it to General Electric, allying the studio with GE's NBC unit. But that would hobble Diller and Vivendi, who are also likely to be chatting up NBC head Robert Wright.
Other dealmakers prowling the halls will include Sumner Redstone and Mel Karmazin, although they seem to be finished wheeling and dealing for now, with the Viacom-CBS merger that they've just closed. But heck, maybe they'd be interested in Lycos if Paul Allen isn't. Or maybe they'd like to add a sports team to their empire, what with National Baskketball Assn. chief David Stern also likely to be somewhere near the buffet table. Of course, Stern is also enamored with the Internet, having launched a major initiative to put his roundballers online. Maybe AOL's Steve Case or Steve Jobs wants to own a team.
O.K., so maybe none of these deals will actually happen. But this little gathering of moguls has more than a little history going for it -- and maybe a new dealmaking legend or two still to spawn.
Grover is Los Angeles bureau chief for Business Week. Follow his Power Lunch column every week, only on BW Online
Copyright 2000 , by The McGraw-Hill Companies Inc. All rights reserved.
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