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Media players plot survival at Sun Valley confab
Sun Jul 5, 2009 2:10pm EDT
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By Robert MacMillan
NEW YORK (Reuters) - The global recession, shrinking advertising sales and fears that the Internet could render big media empires obsolete provide an ominous backdrop for executives at this week's Sun Valley conference.
Herb Allen's boutique investment bank Allen & Co has organized this retreat in the affluent mountain resort town in south-central Idaho every summer for 27 years, inviting guests such as Rupert Murdoch, Sumner Redstone and Barry Diller.
But never before have the media elite been harder pressed to find ways to survive and grow, whether through acquisitions or alliances that they forge over hikes, horseback rides and after-dinner drinks at this historical meeting ground for media and technology deal makers.
"People in the traditional media world are terrified," said Ken Auletta, a New Yorker magazine media writer and author of several books about the media industry, who will chair a panel on new media at this week's conference.
"They're in the analog world, and the world is becoming digital," he said. "They're insecure about what's going to happen to their businesses."
This year's conference from July 7-12 will feature panel discussions, including likely themes from globalization to U.S. President Barack Obama's handling of the financial crisis.
But the real action will be deal action. Last year, Sun Valley was about Microsoft Corp's failed bid to buy Yahoo Inc.
This year, the drama may lie with Time Warner Inc, Viacom Inc and CBS Corp as their executives stroll with a passel of rich money managers like Time Warner investor Vivi Nevo and Yahoo shareholder Gordon Crawford.
Time Warner Chief Executive Jeffrey Bewkes plans to spin off AOL before the end of the year, and speculation is growing on whether he will also ditch the struggling Time Inc magazine unit -- the kinds of decisions that guests are known to make as they linger by the duck pond or knock back a beer.
Chatter also is surfacing over whether Bewkes is in a buying mood. Variety's Peter Bart last month named the DreamWorks Animation movie studio as a target, and Viacom, which distributes DreamWorks movies through its Paramount division, as a rival suitor.
Paramount is already in talks to combine its DVD manufacturing and distribution operations with a rival studio such as News Corp's Fox or Sony Corp's Sony Pictures to cut costs, a source told Reuters last week.
PUTTING FAITH, AND STOCK, IN MEDIA
Bankers expect dealmaking in Hollywood to heat up this summer, as media companies look for new growth opportunities and ways to cut costs as they grapple with slowing DVD sales and tight corporate advertising budgets.
"I would not be surprised if there was a big CBS story. They're a traditional company that is in one of the most challenged sectors in traditional media today," said Mike Vorhaus, president of Magid Advisors, part of media consulting and research firm Frank N. Magid Associates.
Media watchers will make hay with whomever Murdoch lunches, particularly as the News Corp chief stakes his new-media credentials on rehabilitating MySpace, which has lost the title of world's biggest online social network to Facebook. Continued...
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