Later today, Allen & Company's famous tech and media conclave will begin in Sun Valley, Idaho.
It is perennially the spot to see the biggest tech and media moguls congregate to socialize and spark endless rumors about future possible M&A deals.
Three years ago, Yahoo's Marissa Mayer and AOL's Tim Armstrong were spotted having late-night drinks at a hotel bar, leading to speculation the two companies would merge. They did, last year under the Verizon umbrella. At another meeting back in 2014 (which the press didn't see), Tim Armstrong met with Verizon's Lowell McAdam and started the ball rolling to Verizon's acquisition of AOL for $4.4 billion 10 months later.
Other mega-media deals that can be traced back to their origins at a Sun Valley meeting are Comcast and NBCUniversal in 2011, Jeff Bezos and the Washington Post in 2013, AOL and Time Warner back in 1999, and Disney and ABC back in 1994.
So what kinds of discussions could happen at this year's Sun Valley meetings leading to future deals?
- Apple. Tim Cook has been invited again this year. Eddy Cue went there with Cook for the past two years as well. They will do a lot of listening. "Planet of the Apps" was not a great first effort in content for them. HBO — which just premiered the excellent "The Defiant Ones" about their employee, Jimmy Iovine, and the Apple acquisition of Beats a few years ago — is now part of AT&T. Apple just hired Jamie Erlicht and Zack Van Amburg from Sony Pictures Television to head up their originals efforts. Perhaps this was in response to the tepid reaction to "Planet of the Apps." Do they need to do more beyond those hires?
- Dish. It's not clear if Dish's Charlie Ergen will be there but expect there to be a lot of discussion about his wireless assets and plans for an Internet-of-Things national network to get a lot of attention. There was an article in The Wall Street Journal last week about a potential match-up in the cards for Dish and Amazon. Expect the rest of the Hollywood and Silicon Valley power brokers to want to understand this logic more and if they're missing out on something by not buying Dish first.
- Spotify. Founder Daniel Ek has been invited to the gathering. He's already said his company is on track to IPO in the next year or so. This gathering should be an opportunity to sound out interest from potential pre-emptive M&A deals before an IPO. Spotify is the next most powerful independent subscription service after Netflix. If someone wants to take a big step forward in digital, this is a good chance. Despite Spotify's popularity, it still loses money. Does it want to see its stock price get whipsawed on those kinds of concerns (Snapchat's few months as a public company haven't been easy) or would accepting a big check now be preferable?
- Verizon's content strategy. This topic has been written about significantly in the past few weeks (although I first discussed it back in January). Where there's smoke, there's fire. As the AT&T merger with Time Warner continues to inch toward the finish line, their set of assets compared with Verizon's becomes more pronounced. McAdam needs something else in the cupboard of content besides AOL and Yahoo. I don't think a deal with Disney is forthcoming because Verizon simply couldn't afford it. So expect lots of other discussions with smaller content players Verizon might want to bring into the fold.
- Old media's digital strategy. Hard to believe it but two years ago at Sun Valley, the cable bundle wasn't yet under assault and old media stocks were flying high. Then Disney came out a month later and admitted that ESPN was losing subscribers, putting the whole sector in a tailspin. Today, all the old media companies (including Disney, Fox, Viacom, etc.) need to continue to show that they have a foot in the new world of digital/mobile/video and that it's going to be compelling vis-a-vis Amazon, Netflix, YouTube and Facebook. Of all the old media companies, I think Fox is the furthest behind on the digital front. Rupert Murdoch will be in attendance this week. However, because Fox has placed its recent bet on acquiring the rest of Sky PLC, they are being forced to wait on other deals until that one gets approved by British regulators. Maybe the reason Twitter's stock price is up today is that they will be the subject of a lot of old media interest over the next few days in Sun Valley. It wouldn't surprise me if we heard some Snapchat M&A talk coming out of this week too. Snapchat's Imran Khan will be there.