Politics, Economics Weigh on Moguls' Minds at Sun Valley
The 30th edition of the renowned Allen & Co media conference came to a close on Saturday with executives focused on the impending U.S. election as they heard from business and political leaders, including a finale with Oprah Winfrey and Warren Buffett.
The annual summer retreat in Sun Valley is typically a venue for dealmaking among media and technology companies, but the transactions can take months to come to light. For now, executives talked mostly politics to reporters on the sidelines, given the approach of the November 6 election and concerns about how the outcome will affect the economy, deficits and debt.
Hope was high that recent events such as the pending breakup of News Corp or a potential sale of Vivendi's stake in videogame company Activision would bring dealmaking back to the Sun Valley resort. Past Allen & Co conferences spawned blockbuster deals including Disney's $19 billion acquisition of Cap Cities/ABC in 1995 and Comcast Corp's 2009 purchase of NBC Universal.
This year, the week's two biggest news events came from non-deals: the failure of Viacom and DirecTV to reach a new distribution agreement, and the standoff between John Malone's Liberty Media and Mel Karmazin's Sirius XM Radio over control of the satellite radio company.
Any dealmaking took place between talks about the industry's future, politics and the global economy. For business leaders, "probably the most important thing they worry about is what's going to happen in America after the election," said Martin Sorrell, CEO of the world's largest advertising firm, WPP Group.
"Americans tend to finger-point about what's going in Europe," Sorrell said. "I think after the election it will probably be the reverse way around. I think we will muddle through in Europe, it will be very difficult. Then the searchlight turns to America. It's a question about how soon they sort out the deficit problems."
One of the conference's closed-door panel discussions focused on how to manage U.S. debt, attendees said, and guests were given copies of a 2010 deficit reduction report for summer reading. Italy's prime minister, Mario Monti, spoke about the economic crisis in Europe. Winfrey, the talk-show host turned network executive, arrived on Saturday to interview Buffett, the billionaire investor whose views on the economy are closely watched.
Many in the crowd were Hollywood business heavyweights, including Google Executive Chairman Eric Schmidt and Dreamworks Animation CEO Jeffrey Katzenberg, who rank among President Barack Obama's major supporters. Schmidt said the president's backers needed to counter fundraising from "Super PACs," political committees that for the first time can spend unlimited funds to influence elections.
"The new fact is the Super PACs are raising a tremendous amount of money for the Republican side. The Democrats are typically not doing that, so the Democrats will have to respond," Schmidt told reporters.
Billionaire investor Haim Saban, the producer of the "Teenage Mutant Ninja Turtles," said he recently made a donation to support Obama's re-election. Federal disclosures filed on Friday showed he gave $1 million in June to a joint fund of three Democratic Super PACs.
"His domestic policies are the right policies for this time," Saban said. "His policies saved us from a (financial) catastrophe that would have lasted many years."
The guest list this year was heavy with politicians, among them Chicago Democratic Mayor Rahm Emanuel, who chatted with News Corp chief Rupert Murdoch one afternoon; New York City Mayor Michael Bloomberg, and New Jersey Republican Governor Chris Christie.
NEW STAR: TIM COOK
While politics and the economy were hot topics, there was no question who was the hot executive: Apple CEO Tim Cook.
Cook drew everyone's attention, as Apple continues to play a key role in shaping the convergence of media and technology.
With speculation high that Apple is preparing to launch a new TV device, executives are keen to learn what the tech darling that shook up computing, retailing and music is planning for their industry.
The face time moguls were able to grab with Cook was invaluable, particularly given that his predecessor, the famously private Steve Jobs, routinely shunned the Allen & Co conference. Cook not only attended this year, but kept a visible profile and was seen in public several times each day, often with an iPad tucked under his arm.
Cook held at least three meetings at the Sun Valley resort's coffee shop - with Federal Communications Commission Chairman Julius Genachowski; Victor Koo, CEO of Chinese video site Youku; and Paul Sagan, head of Akamai Technologies Inc, which helps companies like Apple deliver Internet content. Twitter co-founder Jack Dorsey and Dreamworks Animation CEO Jeffrey Katzenberg also were seen speaking with Cook during the event.
No media and technology conference worth its salt would be complete without discussion of mobile advertising.
Google's Schmidt painted a future of targeted mobile ads that can tell a person driving down the street looking for new jeans to turn left or right depending on where the better sale is and which store parking lot has more free spots.
"What is the value of that ad? A lot," Schmidt said, noting that such targeted advertising had the potential to be a bigger revenue generator than other forms of marketing.
At the moment, many advertisers still turn to "tried-and-trusted" methods such as TV commercials because the technology to track mobile ads' effectiveness is not fully developed.
"If you are short of making a sales target, you are more likely to use television or even website development," he said.
Targeted ads also raise privacy issues that need to be sorted out, Sorrell said. Still, he expects mobile ad spending to grow significantly over the next five years.
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