The latest news out of the always fruitful Allen & Co. conference in Sun Valley, Idaho, is that there isn’t any, as CBS chairman and CEO Les Moonves told Fox Business Network he has “no plans to make a move for another company.”

Moonves no-deal stance echoes Verizon CEO Lowell McAdam, who put the kibosh on rumors that the telephone company was readying its war chest for a run at The Walt Disney Co., yesterday. 

The Sun Valley conference, also known as billionaire’s day camp, has been a veritable petri dish of deals ever since 1995, when Disney initiated its purchase of Cap Cities/ABC at the conference that year. Since then such media mega deals as Comcast’s purchase of NBC Universal, and Amazon’s purchase of the Washington Post were said to have sprung from seeds first planted in Sun Valley.

CBS has been in the thick of rumor talk ever since the company split from former parent Viacom in 2006.  While Moonves effectively shot down speculation that it would rejoin with Viacom last year, most recently it has been included in the long list of possible suitors for Disney and other media companies.

Merger talks has been spurred by AT&T’s pending purchase of Time Warner Inc., for $108.7 billion, including assumed debt. That deal is still undergoing regulatory scrutiny. Moonves told FBN that he believes the AT&T/Time Warner deal will be approved.      

“It’s going to happen,” Moonves told the network.

FBN reporter Charlie Gasparino, said that Moonves admission that CBS is willing to go it alone speaks volumes for the company.

“You know, sometimes stories are not just deals that are happening but deals that may not happen and what Les Moonves is telling Fox Business is that he believes CBS is better alone,” Gasparino said during his broadcast. “He doesn’t see the need to merge, to team up with distribution, or to buy something else. Pretty interesting because they’re always being rumored about buying something or merging with a distribution outlet.”

You can probably pack a potential mega deal between Verizon and The Walt Disney Co. along with all the other wished-for-but-never-realized mergers gathering dust in your media Hope Chest. But don’t throw away the key just yet.

Fox Business Network got a chance to shout out a question to Verizon CEO Lowell McAdam from behind the barriers at the Allen& Co. summit in Sun Valley, Idaho, Wednesday asking the phone company chief if he was pursing a deal to buy the Walt Disney Co., to which he simply responded, “No.” 

The Allen conference is the annual retreat for media giants and has been a veritable petri dish for some of the biggest deals in the space – Disney CEO Michael Eisner hatched the plan to buy Cap Cities ABC after bumping into Warren Buffett, who was on his way to the golf tees at the conference, in 1995.  Other big deals that reportedly sprung from seeds planted at the conference include Comcast- NBC Universal and Amazon’s purchase of the Washington Post. And this year the attendees list is chock full of more traditional media and digital media moguls like 21st Century Fox’s Lachlan and James Murdoch, Facebook CEO Mark Zuckerberg, Discovery Communications CEO David Zaslav, Buffett and Apple CEO Tim Cook. Jared Kushner and Ivanka Trump were also rumored to be planning to attend, although that could have changed in light of the most recent White House scandal.

Verizon has been linked with other possible suitors over the past several months – reports have had it eyeing Comcast, Charter, Disney and even CBS, none of which has come to fruition. The frenzy around the telco is obviously fueled by AT&T’s proposal to buy Time Warner Inc. for about $108.7 billion in stock, cash and assumed debt. The industry, always abhorring a vacuum, has actively wondered why Verizon hasn’t tried to do the same.

There is an argument that with traditional TV viewing being turned on its ear by over-the-top players and skinny bundles, distributors have to buy content. The problem is, most of the good content is locked up in giant conglomerates like Time Warner, 21st Century Fox and Disney. Any deals would have to be huge – some estimate that buying Disney would cost Verizon at least $190 billion, which is well above Verizon’s current market cap of about $174 billion.

I was never convinced that Verizon was seriously pursuing any of the companies it was rumored to for the simple reason that Verizon wouldn’t add much to the mix. As far as cable operators go, aside from a wireless network, Verizon wouldn’t bring much to the table. Fox presents problems with ownership – the Murdoch family doesn’t seem too hot to get out of the media business just yet -- and Disney would cost too much. Verizon hasn’t been deal-shy – it purchased Yahoo and AOL in the past two years – it’s just been thrifty. The Yahoo deal is costing about $4.5 billion, just slightly more than the $4 billion Verizon paid for AOL in 2015. The leap to a nearly $200 billion territory is pretty steep. Not that they couldn’t do it – put enough accountant and lawyers in a room and they can hammer out practically anything – but I just don’t see a desire to bet the company just yet.

But as Fox Business reporter Charlie Gasparino said in his report, just because Verizon doesn’t seem to want Disney doesn’t mean no one else is clearing space in its Hope Chest for the asset. He pointed to a previous Allen conference where the speculation was that Fox would buy Time Warner, which never came to be (albeit not without Fox trying hard to make a deal happen). But that speculation put Time Warner in play, and it eventually agreed to a deal with AT&T. Whether that gets approval from a Presidential administration that literally fantasizes about body-slamming CNN, Time Warner’s flagship news network, remains to be seen.

But like Time Warner, Gasparino believes that Disney is now in play, and there could be a handful of deep-pocketed suitors trying to justify a deal. Amazon, Google, Facebook, Apple all have been named as potentially interested in Disney’s vast content assets.

“I think there is a good chance Disney is in play,” Gasparino said in his report.

But whatever happens, there is one thing that any potential suitor has to remember: The TV business is hard. It may look simple – just throw a bunch of money at some creative types, make some shows and grab a big bucket to catch the torrent of profits that will inevitably flow. But anybody who has actually played in the space knows it is much different than that. Successful TV executives are a sometimes-otherworldly mix of creative genius, financial maven and just plain lucky stiff. And that hope chest can just as quickly turn into a Pandora’s Box for the unprepared and unsuspecting media suitor. The back lots of content companies are littered with the carcasses of executives from inside and outside the business who learned that lesson the hard way.  

As the private jets returned from Allen & Co.’s annual media mogul summer camp in Sun Valley, Idaho, last week, speculation around possible deals in the content sector grew louder.

Allen’s conference has been the petri dish for several huge media mergers over the past several decades — including The Walt Disney Co.’s 1995 purchase of Capital Cities/ABC, Comcast’s 2009 acquisition of NBCUniversal and Verizon Communications’s 2014 purchase of AOL.

And this year’s soirée comes at a pivotal point in the content business, as programmers contemplate adding scale to compete against heftier distributors like Charter Communications and Altice USA, as well as subscription video-on-demand services such as Netflix.

At the same time, boardroom turmoil at Viacom — Shari Redstone, a company director and Sumner Redstone’s daughter, was a much-watched figure at the Allen conference — could set the deal wheels moving at full speed. Analysts would like to see Viacom and its former bandmate CBS reunite, but there is also the possibility the parent of MTV, Nickelodeon and Comedy Central could continue to go solo or attract the attention of a larger suitor, such as 21st Century Fox.

Consolidation has always been an option for programmers in a land of giant distributors. Most analysts expected a wave of deals after Charter made its first overtures to Time Warner Cable in 2013, starting with Fox’s aborted $80 billion takeover of Time Warner Inc.

MERGER FEVER RETURNS

Content merger fever waned in 2015, when stocks fell sharply over subscriber-loss concerns. But deal activity has begun to pick back up, with last month’s $4.4 billion Lionsgate-Starz merger and NBCUniversal’s $3.8 billion purchase of DreamWorks Animation.

Download "Media's Free Radicals," a guide to the content consolidation possibilities. 

According to research company Mergermarket, which tracks the number and value of media deals globally, 260 transactions worth $43.9 billion were announced in the first half of 2016, up 91% from the $23 billion announced in the same period in 2015. That pace is expected to continue.

Mergermarket TMT Group Sector editor Ed Mullane said in an interview last week that more deals will come in the wake of Starz-Lionsgate, as programmers look to insulate themselves from larger distributors demanding lower prices and skinnier packages, as well as SVOD companies that are pumping billions of dollars into original programming.

“Lionsgate and Starz is an example of two companies that didn’t have the scale to compete against the new players and the incumbent players,” Mullane said.

Netflix, which has committed to spend about $6 billion on content in 2016, also is driving consolidation talk, especially among smaller programmers.

“How are production companies going to compete against that?” Mullane asked. Bigger may be better.

THE LIONS’ DEN

Lionsgate, which many pundits see as cable legend John Malone’s latest consolidation vehicle — he owns 4.5% of Lionsgate and is the largest individual Starz shareholder — is expected to go back to the deal well. And it makes sense in that Malone’s hands are tied on the distribution-deal front, at least for the near term, as Charter focuses on integrating its $78.7 billion purchase of Time Warner Cable.

On a conference call with analysts after the Starz transaction was announced, Lionsgate vice chairman Michael Burns said the Starz deal “would not preclude us from additional acquisitions.”

Wunderlich Securities media analyst Matt Harrigan said he believes Lionsgate will reenter the deal fray within the next 18 to 24 months, but its potential targets are unclear. Movie studio Metro-Goldwyn-Mayer is a possible target, as is Viacom’s Paramount Pictures, which is in the process of selling off a minority interest.

While in the past some pundits have pointed to another Malone holding — Discovery Communications — as a target, particularly because of its reality programming, that value diminished after Lionsgate’s purchase of Pilgrim Studios late last year.

For Harrigan, the most likely consolidation candidates are Viacom, CBS and Time Warner Inc., for two simple reasons: Viacom and CBS shouldn’t have been broken up in 2009 in the first place, and Time Warner’s corporate structure — it has no overly dominant shareholder — makes it ripe for a takeover.

Rupert Murdoch’s 21st Century Fox, which abandoned its $80 billion pursuit of Time Warner Inc. back in 2014 after the Time Warner’s board of directors nixed that deal, could rethink another bid. Adding to the speculation is that Time Warner’s stock has fallen below the $85-per-share threshold of the old Fox bid.

Back in 2014, one of Time Warner’s biggest arguments against the merger was that it could surpass the per share valuation of the Fox off er, which it did for a period. But like other media stocks, Time Warner shares have fallen, as pressures from over-the-top and subscription video-on-demand providers and a weak advertising market have taken their toll.

Time Warner stock is up about 15% ($9.87 each) so far in 2016, but the shares are down 14.6% in the past 12 months. Like many programming stocks, Time Warner never fully recovered from the August 2015 sector bloodbath in the wake of Disney’s revelation that sports programmer ESPN had lost subscribers. It was also the last time that Time Warner shares traded above the $85-per-share mark Fox set in its aborted takeover bid.

Typically, weak stocks and readily available capital — despite the economy, debt is still cheap — lead to deals.

“The obvious target is Time Warner,” Mullane said. “It doesn’t have the ownership structure that large companies do. Everyone would target Time Warner.”

A Viacom-CBS deal makes sense in that adding broadcast network CBS could give cable programmer Viacom additional leverage during carriage negotiations. For CBS, the benefits are less evident, and Harrigan said that a recombination could attract attention from regulators.

“Gigantism can be a little unhealthy,” Harrigan said.

Adding to the fray is the emergence of several Chinese companies into the U.S. entertainment sector. Focus Media, a Chinese advertising and media conglomerate, has said it plans to invest heavily in sports and entertainment properties. Other players like e-commerce company Alibaba and conglomerate Dalian Wanda Group have focused on movie studios, but could turn their heads toward pay TV content.

Still, Harrigan said he doesn’t see an imminent combination of major media properties because of the regulatory angle. For example, he estimated that a Fox-Time Warner hookup would create a company that generates about 40% of total linear TV production through its 20th Century Fox and Warner Bros. studios. That concentration, he said, has little chance of cutting the regulatory mustard.

Moreover, the top five programmers already have a “ridiculous amount of eyeballs,” Harrigan said, so adding another huge company to the mix doesn’t necessarily solve any problems.

Plus, with the advent of skinny bundles, consumers want packages of fewer channels, not more networks being forced on them from a mega-programmer with dozens of channels.

SMALL BUT MIGHTY

Indeed, for all of Malone’s emphasis on “free radicals” in the programming business, there’s no guarantee that bigger is better. Some of the most-watched and respected shows on TV are coming from smaller networks like AMC, which has the top-rated show on cable, The Walking Dead. AMC Networks CEO Josh Sapan said as much at last month’s Gabelli & Co. Movie & Entertainment conference.

“Big is better if it’s really good stuff, and big is worse and is a weight if it’s not really good stuff ,” Sapan said at the conference. “You would rather not have that weight because it will actually burden your fair reward for what you have that is performing.

“Scale’s good if the stuff punches at or above weight,” he added. “Scale’s bad if the stuff punches below weight.”

There is an argument for both philosophies, Harrigan said, adding that having multiple networks can help insulate a programmer from a chilly ratings spell.

“If you’re hot and you’re small, people want the content,” Harrigan said. “But if you hit a cold streak, you’re irrelevant.”

The usual suspects of media moguldom are expected to descend on picturesque Sun Valley, Idaho at the annual Allen & Co. conference beginning Tuesday, with all eyes focusing on who or what could be the target for the next big a mega merger.

This year’s retreat – scheduled for July 8-23 – is unlike some recent Allen & Co. get-togethers in that two major deals are already in the works – Comcast’s $69 billion union with Time Warner Cable and AT&T’s $67 billion acquisition of DirecTV.  But according to several reports, analysts and observers are expecting continued consolidation in the distribution and programming sectors,  as well as some possible activity on the telecom and technology side.

According to several reports, guests expected at Allen & Co. chairman Herb Allen’s annual invitation-only get-away amid the mountains and streams of rural Idaho include Comcast chairman and CEO Brian Roberts, News Corp. and 21st Century Fox chairman Rupert Murdoch, Walt Disney Co. chairman and CEO Bob Iger, CBS CEO Les Moonves, Time Inc. chairman and CEO Jeff Bewkes, Viacom CEO Philippe Dauman, and DreamWorks SKG CEO Jeffrey Katzenberg. Some relative newcomers to the annual retreat include Alibaba Group CEO and the richest man in China Jack Ma and Yahoo CEO Marissa Mayer. Rounding out the tech contingent include Facebook CEO Mark Zuckerberg, Amazon.com CEO Jeff Bezos and Apple CEO Tim Cook.

Some observers speculate that telecom companies could see some deal action at the conference – AT&T CEO Randall Stephenson and Verizon Communications CEO Lowell McAdam are expected to attend, although Verizon has said it has no intention to buy a big media company. Discovery Communications CEO David Zaslav, a regular conference attendee, is expected to have a full dance card at the retreat as his company has been among the top programmers expected to be searching for deals.

Allen & Co., has held the annual week-long retreat since the 1980s, where moguls can mix a day of golfing, hiking, kayaking, and fishing along with deal-making. Some legendary deals have come out of the conference – including  Disney’s 1995 purchase of Cap-Cities ABC  -- and some recent deals include Comcast’s 2009 NBC Universal joint venture with General Electric  (Comcast bought out the rest of the partnership in 2013)  and Bezos’ purchase of the Washington Post for $250 million last year.