Where CEOs Cut Deals (Quietly)

It’s where Disney’s $19 billion acquisition of ABC was dreamed up. Where Comcast’s deal for NBC Universal was sealed. And where the sale of the Washington Post to Jeff Bezos started.

Each year at this time, except last year, a small group of top CEOs and other leaders descend onto Sun Valley, Idaho, for a conference hosted by the boutique investment bank Allen & Co. If you didn’t get the invite, don’t feel bad. Dubbed a “summer camp for moguls,” the conference—which started on Monday—attracts such names as Facebook CEO Mark Zuckerberg, legendary investor Warren Buffett, new Amazon CEO Andy Jassy, and David Zaslav, who led the recent deal to merge Discovery Communications with WarnerMedia.

The weeklong annual event, which dates to 1983, features meetings, relaxation, and most importantly, the chance to cut deals. Supporters point out that resuming in-person meetings is critical at this level and instills a back-to-business message. After 18 months of virtual conferences, “there is pent-up appetite among leaders for some in-person interaction, networking, and information sharing,” says Bill Simon, global managing director of media, entertainment, and digital at Korn Ferry.

Still, experts say that in these times, CEOs need to be careful in the age of the purpose movement—where transparency and diversity matter, something the event has been criticized for. “It’s a nuance warning to CEOs,” says Kate Shattuck, a Korn Ferry senior client partner and coleader of the firm’s Impact Investing practice. “All of your actions are a statement about you, and these events can have negative repercussions.”

As part of the new rules, attendees must show proof of vaccination and pass a COVID test upon arrival on-site. And most events will be held outside this year instead of in the ornate conference rooms of the Sun Valley Lodge. Richard Marshall, global managing director of Korn Ferry’s Corporate Affairs Center of Expertise, says the event is highly watched. “It’s one of the few places where CEO spotting will be sport,” he says, adding that their appearance sets a tone collectively for the world post-pandemic.

Observers will also watch to see if there’s any more dealmaking. Some big mergers have already been announced this year, such as Amazon’s purchase of the movie studio MGM and the aforementioned Discovery-WarnerMedia deal, which portend a major reordering of the media industry. ViacomCBS and Activision Blizzard are just two of the companies that experts say could be in play at Sun Valley this week, for instance.

Meanwhile, the conference’s lack of transparency and diversity has only grown in importance in the aftermath of the pandemic. Allen & Co. goes to great lengths to prevent the press from infiltrating the conference, including banning reporters from official activities. Yet many reporters travel to Sun Valley anyway in the hopes of getting the scoop on a potential deal being discussed at the Duchin Lounge or over lunch at the duck pond. Some even rent bikes or bring golf clubs to follow the leaders they cover on the trails or links during their leisure time.

The lack of transparency is easy enough to explain—dealmaking has to be done confidentially behind closed doors to prevent insider trading, stock runups, or competing offers, for instance. The lack of diversity, however, is a bit tougher. The carefully culled guest list is reflective of the leaders of the industries that attend the conference, meaning mostly white men and very few women or racially diverse leaders. “Optics matter,” says Shattuck.