Herb Allen's Media Fest: Suddenly, A Star Is Unbornby
Talk about bad timing. On July 12, Herbert A. Allen was finishing preparations for his annual media conference in Sun Valley, Idaho. It was shaping up as another triumph for the New York investment banker. William H. Gates III of Microsoft Corp. was set to speak, as was cable titan John C. Malone. For the finale, Allen had lined up his client Barry Diller, fresh from a spectacular merger of QVC Inc. with CBS Inc.
Then, Allen got word that Comcast Corp. had launched a $2.2 billion tender offer for QVC. Comcast President Brian L. Roberts, a key shareholder of QVC, bitterly opposed the CBS deal. And by offering to buy the cable shopping service outright, Roberts threw a hand grenade into Diller's plans. He also dealt a blow to Allen, just as the courtly banker was set to play host to more than 100 of the most powerful people in media.
SCHMOOZERS. Well, at least this year's conference will be memorable. Allen, who tries to keep the meeting private, won't comment on the odd turn of events. But sources close to his bank, Allen & Co., say the focus will likely shift from a victory celebration for Diller to a career-counseling session. "There are a lot of people here that Barry can talk to," says one executive.
If the current frenzy of media dealmaking has an epicenter, it has to be the Sun Valley Lodge, a landmark hotel built by W. Averell Harriman, where Allen's high-powered guests are staying. Previous get-togethers have often led to deals. Last year, executives of Turner Broadcasting System Inc. began chatting with the principals of Castle Rock Entertainment. Scarcely a month later, Turner bought the film studio for $261 million in cash and assumed debt. A year earlier, director Ron Howard and producer Brian Grazer floated the idea of selling their stake in Imagine Entertainment. MCA Inc. later bought them out.
Why is Allen's conference so potent? For starters, his guest list reads like a corporate version of Irving "Swifty" Lazar's star-studded Oscar parties: Rupert Murdoch, Michael Eisner, Jeffrey Katzenberg, Gerald Levin, Sumner Redstone, Frank Biondi Jr., Michael Ovitz, David Geffen, Roberto Goizueta, Warren Buffett, and Henry Kravis. All of them plan to attend.
What's more, Allen strives to keep the ambience casual and family-oriented. Guests bring their spouses and children. After four to five company presentations each morning, they devote the afternoons to rafting, fly-fishing, tennis, or golf. Appropriately loosened up, the participants can get down to some serious schmoozing. Allen does his part to grease the wheels: "Herbert is a terrific dealmaker," says Viacom Chairman Redstone, "so he can put certain groups of people together."
Even before Comcast's bombshell, the conference had a ripe agenda. Thomas S. Murphy spoke about the future of his TV network, Capital Cities/ABC Inc. Now, though, Cap Cities will probably have to wait for its moment in the sun until after the CBS-Diller saga is resolved. Herb Allen has other things on his mind.