Raise a Glass to the Deals of the Year
Posted January 1, 2018 8:50 p.m. EST
Please take your seats.
It is that time of year again: our annual closing dinner, where we look back at the year that was, to toast and roast the year’s deal-makers on Wall Street and in Washington and look ahead to what may come next.
And what a year it was.
This year, we decided to hold our dinner at the Breakers in Palm Beach, Florida, just down the road from the Mar-a-Lago resort, better known as the Winter White House. Given that President Donald Trump has spent nearly a third of his presidency — that’s not a typo — at one of his properties, as The Wall Street Journal reported, we figured we would try to make it convenient for him. There were a surprising number of openings at Mar-a-Lago given all the cancellations by foundations and charities, but ever since an artist projected “Pay Trump Bribes Here” on the Trump International Hotel in Washington, our conflicts committee suggested that hosting the dinner at Mar-a-Lago would be a bad idea.
We also figured holding the dinner in Florida would be convenient for so many of you moguls and machers already down here looking for real estate since the tax bill was signed into law. The other bonus of buying here, of course, is that your home is protected even if you file for bankruptcy.
Sitting at the dais are Trump along with the first lady. (Ivanka, Jared and the rest of the family were away on vacation.) Next to him are Rupert Murdoch and his new BFF, Robert Iger of the Walt Disney Co., who just gave up any hope of running for president in 2020, a condition of his deal to buy most of Twenty-First Century Fox’s assets. To their right are the chief negotiators for the tax plan: Gary Cohn and Steven Mnuchin (and Mnuchin’s wife, Louise Linton, who I should mention — and I’ll be sure to hashtag this on Instagram — is wearing a beautiful scarf from Hermes and gown by Valentino).
The seating chart is, of course, always a bit complicated. We had to keep Jeffrey Bezos of Amazon from the dais to prevent Trump’s Twitter war with him from interrupting the festivities. And we had heard that Bezos had a practical joke planned: He was going to tell Trump that he had chosen Mexico City as Amazon’s second headquarters. Masayoshi Son, SoftBank’s founder, is also here this year. He is seated at the Uber table, having just struck a deal to invest $9 billion in the company at a 30 percent discount to the company’s previous valuation of $68 billion, although he had also invested $1 billion at the company’s previous valuation to maintain the fiction that the company was still worth $68 billion. It’s been a tough year at the Uber table of frenemies: Dara Khosrowshahi, Uber’s new chief executive; Travis Kalanick, Uber’s founder; Arianna Huffington, an Uber board member; and Bill Gurley, one of Uber’s largest investors. To help keep the peace, we’ve invited a calming influence to sit with them: Anthony Scaramucci, the Mooch, who had his own tough year as the president’s director of communications for a hot minute.
We had extended an invitation to Prince Alwaleed bin Talal, but our invitation was returned. When we tried to call him at the Ritz Carlton in Riyadh, otherwise known as the Royal Prison, we were told, “The hotel telephone lines are currently disconnected until further notice.” (By the way, that’s not a joke.)
And then there is the Facebook table: Mark Zuckerberg is here this year along with Sheryl Sandberg. We’re sorry to say that President Vladimir Putin of Russia could not make it. I jest! Sort of.
Finally, we have the bitcoin table: The Winklevoss twins, newly minted as bitcoin billionaires (cut out the gloating and spitballs to the Facebook table, please) and Jamie Dimon, JPMorgan Chase’s chief executive, who has said bitcoin mania is “worse than tulip bulbs,” adding: “It won’t end well. Someone is going to get killed.” We’d love to hear the dinner conversation among you all.
Now, on to the toasts of 2017.
DEAL OF THE YEAR: Amazon.com’s acquisition of Whole Foods came as a true surprise. The deal has the potential to truly accelerate Amazon’s march into our daily lives by giving it an even closer distribution point to our homes. It also was a signal to the rest of the marketplace that nothing is off limits. The betting line is that the next land grab for Amazon is pharmaceuticals, which may have driven CVS’ $68 billion bid for Aetna. Also, a postscript: One deal that has not received enough credit but that proved itself in 2017 was Walmart’s acquisition of Jet.com. The $3.3 billion acquisition of a money-losing site seemed like a mistake, but has breathed new life into Walmart’s e-commerce business.
SURPRISE IPO SUCCESS: Roku, the streaming television company, went public, and its stock is up 280 percent, one of the highest increases of the year. The company is being compared to Netflix and is considered a pure-play bet on over-the-top streaming television services.
A SIGN OF THE TOP?: Blue Apron, a meal kit service, went public and quickly fell faster than Pets.com. Who thought that was a good idea?
TRUMP WINNERS: Stock investors were some of the biggest beneficiaries in 2017, with a rally that began when Trump won the presidency. On an individual basis, Stephen A. Schwarzman of the Blackstone Group gambled early and publicly on Trump, despite protests inside and outside his firm. It gave him a ringside seat to the White House last year. Saudi Arabia backed a new $40 billion infrastructure fund by the firm. And Schwarzman, like the entire private equity industry, was a beneficiary of the new tax plan, which kept carried interest taxed at capital gains rates with only a slight adjustment.
MORAL CEO WINNER: Kenneth C. Frazier of Merck was the first chief executive on one of Trump’s councils to rebuke the president’s comments after violence in Charlottesville, Virginia. A wave of executives followed suit, but only after Frazier made the first move. That took real courage.
TWITTER CEO WINNER: Lloyd C. Blankfein of Goldman Sachs won Twitter in 2017 with this witty tweet during the solar eclipse: “Wish the moon wasn’t the only thing casting a shadow across the country. We got through one, we’ll get through the other.”
ENTREPRENEUR OF THE YEAR: Say what you will about Elon Musk — he has fans and critics — but he again proved that he thinks differently. Sure, he introduced new Teslas and sent more rockets into space. But he also introduced perhaps his craziest idea: the Boring Co. Technically, he founded the company in December 2016, but it was during 2017 that we really learned about his ambitions: He wants to dig huge tunnels under the earth to create a patchwork of roadways. The economics and physics of it all have been questioned. But as a venture capitalist, Jason Calacanis, said this summer: “Betting against Elon Musk is betting against the future of humanity, and it’s an incredibly stupid thing to do.”
THANK YOU OF THE YEAR: Janet Yellen, the departing Federal Reserve chairwoman, deserves our genuine thanks for steering the economy successfully and overseeing a drop in the unemployment rate to levels not seen in decades. She took verbal abuse from our president, who called her “obviously political” before he was elected, only for him to double back and praise her once he realized that his economy was her economy, too.
MOST IMPORTANT CHANGE IN BUSINESS: The exposure of bad behavior by men toward women in the workplace — and elsewhere — throughout virtually all industries was perhaps the most important and profound story of the year. It has already shaken up a multitude of businesses, and more revelations are likely to come. Its impact on our culture and office politics will last far longer, hopefully, than anything else discussed at tonight’s dinner.
QUESTION OF THE YEAR: Why does the administration really want to block the AT&T-Time Warner deal? Of course, the speculation in media circles is it has to do with Trump’s war on CNN. That may or may not be true. But the president didn’t help himself when Sarah Huckabee Sanders quoted him as saying he supported a rival merger between Murdoch and Disney, saying that “this could be a great thing for jobs” when it plainly will result in layoffs.