Sun Valley shenanigans

Launched 20 years ago by media banker to the stars Herb Allen, as a time for his clients to relax and chew the fat, Sun Valley has become famous for spawning multibillion-dollar mergers like Walt Disney's 1996 acquisition of ABC, says Matthew Garrahan on the Financial Times Tech Blog.

But this year, with the US economy flatlining and media stocks languishing, "the mood among the nation's machers" is far from festive, says Andrew Ross Sorkin in The New York Times's DealBook, with expectations low for a round of deal-making.

Last year, "private equity was still king", and Wall Street still a king maker, says Sorkin. But judging by this year's invitation list, "private equity is pass in 2008" – Henry Kravis and his partner Lord Clive Hollick comprising the lone "buyout kings" among the media/internet faithful, including: Google's Eric E.Schmidt, News Corp's Lachlan and James Murdoch, Barry Diller of IAC/InterActiveCorp, Jeffrey L. Bewkes of Time Warner, the newly retired Bill Gates and Amazon founder Jeff Bezos, as well as 2008's special guest, according to Reuters, His Majesty King Abdullah II of Jordan.
Not surprisingly, the Microsoft-Yahoo deal-that-wouldn't is the highlight of this year's conference, says Sorkin. Jerry Yang and Sue Decker of Yahoo are in Sun Valley, although Microsoft CEO Steve Ballmer and "his new B.F.F.", activist investor Carl Icahn, are notable in their absence.

But Bill Miller – portfolio manager of Legg Mason Capital Management, the third-largest institutional shareholder of Yahoo, with a 5.23 per cent stake as of March 31 – is in Idaho and, when asked if he would back Icahn's board slate for Yahoo, he told Reuters Wednesday that "the difficulty with Icahn is he'd have more shareholder support if he would say he wouldn't sell the company for less than $US33."

But "it's hard to imagine Icahn making such a commitment at this point," says Jeff Weisenthal on paidContent.org, and anyway, that price may be long gone given that "when deal talk quiets down, Yahoo shares make a bee-line for the sub-$20 range."

Meanwhile, NBC Universal boss Jeff Zucker could be a contender to steal the limelight from Yang & Co on the dealmaking front, says the New York Post's Peter Lauria.

According to Lauria's Sun Valley sources, Zucker has made it pretty clear he's looking to do deals and "remake NBC's overall approach." Although this doesn't quite gel with Zucker's statement to CNBC earlier this week, that he doesn't see a sale or spin-off in NBC's future.

As for the really hot ticket at Sun Valley this year, well, "that would be the Web 2.0 crowd," says Sorkin, including such folk as Digg CEO Jay Adelson, Max Levchin of Slide, investor Peter Thiel, Janus Friis of Joost.

Also among the new guard is Marc Andreessen – a recent addition to the Facebook board who runs social networking site Ning – who kept up "his death watch for old media" in his seminar on Wednesday morning, says Sorkin.

In a talk titled "Looking Around the Corner to the Future", which was closed to the press and off-the-record – the standard for Sun Valley, Andreessen is said to have told listeners that "non-digital businesses are toast".

According to Sorkin's off-the-record source, Andreessen told the audience: if you own old media – newspapers, TV stations, movie studios – "you should sell."

Whether or not this call to action inspires any dealmaking, however, remains to be seen.

Can this media who's-who find the answer for Yahoo?, Matthew Garrahan, FT.com

Live from Sun Valley 2008, Andrew Ross Sorkin, The New York Times

Icahn support up if ensures Yahoo price, Reuters

Sun Valley chatter: Yahoo talk; NBC dealing, Jeff Weisenthal, paidContent.org

NBC's Zucker in demand for media dealmaking, Peter Lauria, The New York Post

Sun Valley: The old-media death-watch continues, Andrew Ross Sorkin, The New York Times