The people who run the world aren’t hiding — they’re at Sun Valley Summer Camp
FOR five days each year, the businessmen who run the world get together to let their hair down — and pull off multibillion-dollar deals.
EACH year, the Western world’s most rich and powerful gather in a tiny mountain town in Idaho to attend a five-day summer camp called Sun Valley.
They arrive in private jets while hordes of photographers try to catch a glimpse of them entering a wooden mountainside ski lodge.
Think Elon Musk, Mark Zuckerberg, Oprah Winfrey, Bill Gates and Warren Buffett.
Inside, the world’s 1 per cent has cultivated an annual tradition of summer camp fun intermingled with intense, secret billionaire business: networking, hashing out deals, mergers, acquisitions and big-time takeovers, consolidating their wealth, and talking long-term strategies and forced resignations.
WHAT IS ALLEN AND CO’S SUN VALLEY?
The secretive, exclusive and invite-only retreat was founded in 1983, 35 years ago. It’s a five-day summer-camp-style getaway for billionaires in media, finance, politics and power. Hosted at the historic Sun Valley Lodge outside Ketchum, Idaho, attendance costs a billion dollars. The camp is run by Herb Allen Jr, the chief executive officer of Allen and Co, a secretive Fifth Ave merger and acquisitions company.
The company itself is private and secretive, like its CEO, who does not issue press releases. The company also doesn’t have a website. The company does, however, have powerful employees, such as George Tenet, who used to run the Central Intelligence Agency, and its client list is similarly heavyweight.
Allen and Co has been instrumental as advisers in media acquisitions and takeovers, including Google’s initial public offering in 2004, Facebook’s $US19 billion acquisition of WhatsApp in 2014, Microsoft’s $US26 billion acquisition of LinkedIn and eBay’s separation from PayPal in 2015. This separation resulted in thousands of job losses at both PayPal and eBay over the ensuing years.
SUN VALLEY IS THE MAKER AND BREAKER OF MEDIA MOGULS
Sun Valley is where a young Steve Jobs trialled his Apple product launch talks. Decked in a turtleneck, he spoke passionately on stage to his fellow moguls about “marrying technology with storytelling” to maximise sales. “Most computer geeks don’t get it”, he said, in what would become his signature business-orator style. “Hollywood doesn’t get it either. Hollywood thinks technology (is just) something you buy”. In 2015 Forbes called Jobs the “world’s greatest business storyteller”.
The negotiations for Zuckerberg’s takeover of Instagram were spurred by (bungled) alcohol-fuelled fireside talks at Sun Valley. Twitter’s then CEO Jack Dorsey, competing with Facebook for the takeover, offered Instagram founder Kevin Systrom $500 million for the app, just 18 months after it had launched. Systrom was a newcomer to the world of multimillion-dollar Sun Valley deals, and the story goes that they made him an offer of $500 million, fireside, after drinking with him.
This was in 2012 and Systrom found the events to be unprofessional, with no formal “term sheets” provided. They bickered in the press and Zuckerberg managed to snag the deal for Facebook, but only by working in a more collaborative, less fireside way. And, of course, by doubling the offer.
Warren Buffett managed to leverage Disney’s massive $US19 billion acquisition of ABC/Cap Cities by chatting to then Disney boss Michael Eisner on their way to a round of golf. Buffet described the deal as ABWA (acquisitions by walking around).
Sun Valley is sometimes fun and sometimes professionally devastating for its attendees. Last year, Verizon finalised its $US4.5 billion takeover of Yahoo, which is rumoured to have been hammered out over an “intense bar conversation” between then Yahoo CEO Marissa Mayer and AOL CEO Tim Armstrong in 2014. This was eyed by reporters at the time. The conversation is rumoured to have been so heated that the bar had to be cleared out. Meyer eventually resigned from Yahoo with a “golden parachute” payment of $US23 million, her exit making way for the takeover of over 50 media brands.
Amazon CEO Jeff Bezos got to know The Washington Post owner and CEO Donald Graham at Sun Valley and acquired the newspaper in 2013. The deal cost Bezos $US250 million. After the takeover, Forbes said Bezos had “completed his transformation into a media mogul”, citing his desire to buy one of the “crown jewels of America journalism”. The task completed by talks at Sun Valley, his online ad revenue was reportedly set to surge by more than $US200 million by that year.
ASIDE FROM MULTIBILLION-DOLLAR TAKEOVERS, WHAT GOES ON?
The sprawling, picturesque property sits mountainside, about 1800 metres above sea level, surrounded by rolling green hills and dotted with fir trees and little native flowers. The environment is verdant and the activities serve to create a vibe that is conducive to effective deal making and barrier breaking.
There are gyms, spas, a talent show and no shortage of quirky outdoor activities. If things get heated and emotional, there’s a head camp counsellor. Employed by Allen and Co, it’s unclear if their particular role is pastoral or strategic.
There are picturesque summer camp activities but done for adults, with the hundreds of powerful moguls taking part in fly fishing, golfing, white water rafting, skeet shooting (this is where you shoot at clay targets fired into the sky), mountain biking, tennis and massages. They sunbathe by the pools and in the evenings drink at the bar and eat barbecued meats.
Days start early, with breakfast at 6.45am, followed by panel discussions on topics such as “Unparalleled Prosperity and a Troubled Society”. This particular panel was reported on by a New Yorker journalist in 1999.
The panel conversation delved into “America’s vibrant economy” where the ex “New Coke” executive Donald Keogh said “the creation of wealth is incredible” and contrasted this with “the dark side of our society”. The panel went on to discuss gun violence in schools and how they felt about the US Constitution’s First Amendment on free speech and the ethics of airing shows such as Jerry Springer, which show actual violence between families on TV. Gun violence in schools was also discussed at length.
At the end of the five-day event, there’s a $40,000-ish fireworks display, billionaire-on-billionaire comedy roast and ice skating display (at least once performed by Olympic figure skaters, according to Vanity Fair).
Sun Valley is also a decidedly family-friendly affair, with children of all ages encouraged to attend. They billionaire broods are well looked after by an army of nannies, babysitters and activity directors, and spoiled for choice, with activities such as ice skating, fishing and wagon rides. For kids, the five days in Idaho can become about “junior networking”; media moguls have told journalists that their children have made lifelong friends at Sun Valley.
WHO ATTENDS SUN VALLEY SUMMER CAMP?
The common guest list is famously on lockdown, with Allen and Co staffers refusing to comment to the press about the conference.
Lifelong attendees include most media and finance heavy hitters: software billionaire Bill Gates and his wife Melinda, business magnate Warren Buffett, TV icon Oprah Winfrey, News Corp executive chairman Rupert Murdoch (who now also brings his sons Lachlan and James), Apple mastermind Steve Jobs, Google founder Larry Page, Michael Dell of Dell Computers, Donald and Katherine Graham of The Washington Post, Nobuyuki Idei of Sony (now Lenovo), former head of CBS and Viacom Sumner Redstone (now deposed from his position by force by a geriatric psychiatrist) and former AOL CEO Steve Case.
Four of the five richest people on the planet attended this year: Jeff Bezos, Bill Gates, Warren Buffett and Facebook founder Mark Zuckerberg. Also in regular attendance is Google chairman Eric Schmidt, Nike founder Phil Knight, Uber CEO Dara Khosrowshahi, Tesla and SpaceX boss Elon Musk, Twitter CEO Jack Dorsey, Apple heavy-hitter Tim Cook, NBA star and businessman LeBron James, NBCUniversal vice-chairman Ron Meyer (it is at this conference that the Comcast/NBC deal got off the ground), Slack CEO Stewart Butterfield, First Daughter Ivanka Trump and her partner Jared Kushner, former UK prime minister Tony Blair and LinkedIn co-founder Reid Hoffman.
The local airport often reports a tarmac gridlock of private jets, Gulfstreams and Falcons; between 350 to 465 airliners attempted to land during this year’s event, according to local operators. This fleet dwarfs the air forces of most developed nations, including Australia, which has 288 aircraft in its Royal Air Force.
WHY IS THE CAMP SO SECRETIVE?
While many billionaires have commented over the years that Sun Valley is a rare chance for them to holiday with their friends and family, mergers and acquisitions — Allen & Co’s year round function — is what colours reporting on the secretive billionaire getaway.
The technology age is defined by new technologies. Vanity Fair has called it the two-guys-in a-garage-principle. “Somewhere, always, there are two guys in a garage, working on the next thing,” wrote Elise O’Shaugnessy in her 1994 article about Sun Valley. Here the billionaires can converge, calculate and take over emerging companies. They can target the new market companies — the Instagrams, the WhatsApps — fireside, and incorporate them into their already massive portfolios.
Rupert Murdoch is the executive chairman of News Corp, which publishes news.com.au
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