Titans Set to Compare Thoughts at Sun Valley

About this time last year, Michael Eisner, Warren Buffett and Tom Murphy had a chance meeting in a parking lot at the power retreat for entertainment big shots held every year by investment banker Herbert J. Allen Jr. in Sun Valley, Idaho. The conversation resulted weeks later in the largest corporate merger in entertainment history--Disney’s $19-billion purchase of Capital Cities/ABC.

Although industry movers and shakers say they don’t necessarily envision a deal of that magnitude coming down at this year’s gathering--which runs from July 9-13--they agree that anything can happen when such a high-powered group of media moguls, corporate giants and money managers get together in their shirt sleeves and Nikes.

“All sorts of deals can be hatched because it’s the perfect opportunity for titans to meet outside the scrutiny of the press,” said one high-powered guest, who asked for anonymity. Since the gatherings began 13 years ago, the press has been barred from attending.

It’s useless trying to get any of the 130 or so invited guests to talk on the record about what they can expect at the conference: They’re all sworn to secrecy by Allen, who threatens to remove anyone who dares to breathe a word about the closely held event from the guest list.

Allen, whose Wall Street-based Allen & Co. has brokered most of Hollywood’s biggest mergers and acquisitions, including Seagram’s $5.7-billion purchase of MCA and Sony’s buyout of Columbia/TriStar in 1989, refused to return repeated calls.

This year’s roster, which includes the chief executives of such companies as Bell Atlantic, AT&T;, US West, America Online, Motorola, Black Entertainment Television and Canal Plus, looks decidedly different from last year’s. It seems to have more high-tech corporations, phone companies and international media concerns.

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Deregulation of the telecommunications industry in February has made announcements of big media mergers practically a weekly event. Phone companies are merging and spreading into cable and satellite TV. International alliances are proliferating as media companies tap into the profusion of new TV channels abroad. And how to turn the Internet into a cash cow is every media company’s obsession.

At the conference, Barry Diller, head of television station group Silver King Communications, will sit on a panel with Microsoft’s Bill Gates and Intel’s Andrew Grove to discuss the Internet. Diller, who controls Home Shopping Network, will plug the Internet Shopping Network, an electronic retail service.

Although companies in these emerging businesses have been represented at Sun Valley gatherings before, their greater presence this year reflects the fast and ever-converging worlds of entertainment, technology and telecommunications. For sure, some are either new or potential Allen & Co. clients, again an indicator of where the huge fees collected by investment bankers will be coming from in the future.

“This is Allen’s principal marketing vehicle,” said one rival investment banker. “This event is totally promotional.”

Many of the conference’s regular power brokers, including Buffett, Gates, Rupert Murdoch (who had a schedule conflict last year but will hold a breakfast “conversation” this year), Sumner Redstone, David Geffen, Edgar Bronfman Jr. and Paul Allen, will be on hand again this year. Ted Turner, who attended last year for the first time, won’t be back, preferring to hang out at his own ranch rather than vie for center stage with dozens of other moguls. Other probable no-shows include Eisner and Tele-Communications Inc. chief John Malone.

Other guests, such as Diller and Laurence Tisch, are returning under new company banners. Diller’s new Silver King is a key Allen client, as is Tisch.

Guests describe the atmosphere at the conference as casual and social, and they agree that the overriding reason they like going is to hobnob with each other in one place at one time.

“It’s a great place to network and hang out. . . . You develop relationships,” said one industry mogul.

That makes it a hot ticket. The chief executive of an emerging television venture was scrambling this week to rustle up an invitation. “There’s probably not much hope,” said his assistant. “It’s like getting a last-minute invitation to a wedding.”

After the opening night barbecue on Tuesday, guests attend corporate presentations by various companies and panel discussions from 7 a.m. until lunchtime. Afternoons are free for social activities, which include everything from fly fishing, river rafting and skeet shooting to golfing, tennis and swimming. Most guests come with their families in tow.

Firms making presentations this year include US West, Motorola, Intel, McDonald’s, Omnipoint and Silver King.

Motion Picture Assn. of America head Jack Valenti, who moderates a yearly entertainment seminar, will have on his panel this year, MCA Chairman Frank Biondi, his former Viacom boss Redstone, Disney Studios Chairman Joe Roth, Warner Bros. co-Chairman Terry Semel and DreamWorks SKG partner Jeffrey Katzenberg.

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Skyrocketing costs in the movie business, an expected cutback in production and the continued global problem of protecting copyrights of intellectual properties will presumably all be on the agenda.

Guests should be reminded that if they want to be invited back to next year’s Sun Valley hoopla, the trick is not to leave or get fired from their high-powered jobs.

Among those not invited back this year were Sony Corp. of America’s deposed Chairman Michael P. Schulhof, who was dumped last year after years of profligate spending by the company’s Hollywood movie studio; Michael Fuchs, who was ousted from Time Warner after losing a power struggle with management; and Savoy Pictures Entertainment co-founders Victor Kaufman and Lew Korman, who had to be bailed out by Diller’s Silver King after their company lost a fortune in the movie business. Savoy’s downfall was a black eye for Allen & Co., a major investor in the company.