Big Money Takes Over Sun Valley

July 11, 2008— -- The first thing one notices when flying into the tiny Hailey/Sun Valley Airport in Idaho is its disproportionately large hangar full of private and corporate jets. Oh, yes, it's the first sign of big money taking over the little resort town.

It could only mean one thing if private jets outnumber the commercial planes: It's that time of year again for the Allen & Co. conference, one of the most private and highly exclusive meetings among the media business elite. They come in droves -- literally.

Unlike the world economic forum's annual gathering in Davos, Switzerland, the Sun Valley conference prides itself on being a family event. And so the most powerful media executives from across the globe fly in with their spouses and children. There's something nice about seeing Amazon.com's founder Jeff Bezos walking hand-in-hand with his wife, Rachel Ray with her husband, NBC head Jeff Zucker with his kids at a candy store and legendary investor Chris Davis worrying that his daughter may go into a sugar rush any second from eating a massive lollipop.

The event began Tuesday and closes Saturday night. The private venue has made the conference famous for some mega deal-making. It was here, a few years back, that then Disney CEO Michael Eisner and ABC head Bob Iger decided to join forces and merge the two companies.

And so, once again, the industry titans arrived to chat, share stories and catch up with their industry buddies -- or, more accurately, frenemies -- as Yahoo's CEO and man in the hotseat, Jerry Yang, was overheard saying, "Not too many people are your friends."

He, of course, is the one guy reporters are closely following. The buzz leading up to the conference this year was all about the troubled dot.com giant Yang founded years ago. What will he do with this baby? Why won't he sell it to Microsoft? They offered him a hefty premium for the stock, so why isn't he doing what's best for his shareholders?

The drama has only grown, with corporate raider and large Yahoo shareholder Carl Icahn stepping into the mix, threatening to take over the company by proxy. So reporters and industry insiders were eager to see what happened here -- who would Yang turn to for help?

And they weren't let down.

After being spotted chatting with the Google guys (who have made it clear that they are sympathetic to Yang's dilemma, and, of course, who are known for their struggle with Microsoft head Steve Ballmer), Yang spent the majority of an evening smoking cigars with Time Warner honcho Dick Parsons.

But if it's deals the world is waiting to see come out of this event, well, then the world needs to lower its expectations. You see, here, too, some of the wealthiest business moguls are feeling less wealthy than a year ago. And while we're technically not in a recession, it sure feels like one to News Corp.'s Rupert Murdoch, Sony's Howard Stringer, Disney's Bob Iger, Parsons and many others.

Of course, they can all join Harvey Weinstein, Paramount's Brad Grey, CBS' Les Moonves, Google's Sergey Brin and Eric Schmidt and raise a glass and share a laugh. But deep down, they are all feeling the pressure of a troubled economy.

Believe it or not, the average American's pain at the pump and at the grocery store is affecting some of the media world's most powerful leaders. How so? Ad money is not as free-flowing as it was in prior years. Advertisers are aware of consumer woes and, therefore, more hesitant to throw their money around (the bread and butter for media companies).

So while industry leaders may still be discussing the future, possible mergers and ideas, no one should expect much of anything anytime soon. Oh, sure, money is still there, investors are still alive and kicking, but they aren't willing to bet on much of anything at this point.

Powerful private equity king Henry Kravis said at the conference that he believes the worst is yet to come for the economy, which he believes will continue to suffer for the next two years.

Keeping that in mind, it shouldn't be surprising that most everyone was vying for the attention of Zhang Ziyi, the beautiful and famous Chinese actress quickly making her name known to American audiences. Or, rather, the attention of her Israeli boyfriend, powerful media investor Aviv, or Vivi, Nevo. Each CEO is hoping to convince Nevo that their company is ripe for more funding.

Of course, Hollywood media and entertainment come in all forms, not least of which is the world of sports. And while baseball and NBA commissioners Bud Selig and David Stern, who were also spotted in Sun Valley, are no doubt worried about how much longer cash-strapped consumers can afford to pay for tickets to their games, they are most likely also thinking about how those fans feel about steroids, A-Rod and Madonna.

An interesting take-away from the conference is the bit of irony it created. For there is probably no conference more closed off and passionately against media cameras and reporters than this one, even though its participants all make their millions running media empires.

But perhaps the biggest take-away is that despite their elite and privileged lifestyles, these corporate leaders are hurt by the economy. And it is largely up to them to turn the economy around and remind consumers that this too shall pass. That's a job and responsibility most people would not want -- despite the corporate jets and five-star trips to private resorts.