It’s no surprise that the biggest story that came out of last week’s so-called “summer camp for billionaires,” the once high-profile Allen & Co. media conference, involved the investment bank directing its band of goon-squad security guards to chase away reporters from doing their job of interviewing some of the A-listers who still attend.
The get-together on the lush grounds of the Sun Valley Lodge in Idaho is an also-ran because Big Media isn’t so big anymore.
Sure, some moguls still have their billions, but most run companies that are melting away, having been hurt by secular forces in their business. Their hold on American culture has also waned considerably as consumers of entertainment and news increasingly boycott wokeism.
That doesn’t mean there was no business going down, though it was a far cry from years past.
Four years ago, the Post’s Lydia Moynihan first reported that media heiress Shari Redstone was at the confab shopping Paramount Global. An $8 billion merger with Skydance Media is now poised to be consummated as it awaits regulatory approval from the Federal Communications Commission.
From what I understand, this year’s Sun Valley chatter was focused on much smaller players and deals since the big guys (think companies like Warner Bros. Discovery and Comcast) are busy spinning off their money-losing assets. They’re breaking up into smaller pieces to try to preserve some shareholder value. Plus, they have neither the stomach or the balance sheet in the foreseeable future for major acquisitions, particularly the transformation type.
The names that I understand were on the dealmaking watch list were the so-called local broadcasters. Many of them run affiliate stations of the major networks that serve local news to middle America.
These are companies like Sinclair Broadcast Group, Gray Media and Cox Media Group. The latter is private and majority owned by private equity shop Apollo Management.
Shares of Sinclair are up 16%, while Gray is up 30% – compared to a 5% rise in the S&P – based on merger and buyout chatter, telecom bankers and lawyers tell On The Money.
Apollo is looking for a buyer for Cox, I am told.
So why would anyone bet that Little Media will survive the melting ice cube that is draining the Big Media business model?
First the little guys do make money, though less so because of changes in the business. There is also a move by Trump regulators to preserve local TV media since it serves so much of the MAGA base.
That means networks like Paramount-owned CBS will be on a tight leash from DC to jack up fees on the locals to run their programming.
On top of it all, these companies run lean and can run leaner, meaning you can grow profits through cuts, bankers argue.
So who would buy them? Difficult to say since major players might not have the balance sheet. Maybe they will merge or begin swapping properties among themselves.
Full disclosure: I didn’t attend Sun Valley to report any of the above, which is another reason to skip the event.
