Idaho Town Has Much Invested in Elite Retreat

Townsfolk here are moonlighting as activity planners and couriers. They are doing double duty as fishing and rafting guides. They are pulling down $1,000 (before tips) this week as baby sitters and chauffeurs.

For 21 years now, the annual conference hosted by powerful New York investment banker Herbert Allen has taken over -- and enriched -- this mountain community by importing a who’s who of the nation’s entertainment, technology and investment elite. This week, tiny Friedman Memorial Airport will be among the nation’s leaders in private jet traffic. On Thursday, 70 sat on the tarmac.

The 500 or so guests in attendance include such moguls and power brokers as Microsoft Corp. founder Bill Gates, Walt Disney Co. Chief Executive Michael Eisner, Viacom Inc. Chairman Sumner Redstone, InterActive Corp.’s Barry Diller and, as always, billionaire investor Warren Buffett.

These captains of industry come with their families to fraternize and frolic in the Idaho Rockies, amid the shimmering cottonwoods and crystalline, trout-filled streams. They stay in the Sun Valley Resort, a sprawling compound with skating rinks, tennis courts, swan-filled ponds and an opera house. Hollywood stars have flocked here since the heyday of Ginger Rogers and Gary Cooper.

But work also is in the clean air. The five-day retreat featuring panels and presentations has held a reputation as the birthplace of some of the biggest media and entertainment deals in recent history. In some respects, the scenic surroundings are second to inspecting the competition up close.

“One of the great things about coming to this conference is you get exposed to great people,” said media titan Redstone, 80, who has missed only one or two conferences in the last 16 years. “I always learn something.”

That’s more than the general public can say.

Secrecy is a hallowed conference tradition, largely honored by guests and townspeople alike. Chauffeurs must apply months in advance because of extensive background checks. And baby sitters must sign confidentiality agreements. Allen, the press-shy and private head of Allen & Co., would not be interviewed for this story. As always, his company, which spends an estimated $10 million on the fete, refused to provide the guest list or the week’s agenda. He asked guests not to share these secrets either.

“We have a community culture here of not talking about the celebrities and stars who come here,” said Carol Waller, executive director of the Sun Valley/ Ketchum Chamber and Visitors Bureau. “We have no maps to movie stars’ homes. We respect the right to privacy, and that is one reason why Allen & Co. continues to come to Sun Valley every year.”

That said, they’re grateful for the largess of Allen & Co. and its guests, especially after the two-year decline in resort travel.

Most of the money goes to Sun Valley Resort because that’s where guests spend most of their time. “It’s a very good piece of business,” said Jack Sibbach, director of sales, marketing and public relations for the resort. “We love them.”

So do some of the local merchants who have managed to carve out followings among the guests.

“I know their names and they know mine,” said Rochelle Runge, owner of Elle Rose, an upscale designer boutique. “I often deliver to their hotel rooms.... Seven ladies just left.”

With the concentration of wealth here this week, security is tight.

New York City Police Officer Mike Stapleton has held a contract for eight years to provide protection. This year he brought a crew of 25 from the city, his biggest ever, in part because CIA Director George J. Tenet and Treasury Secretary John W. Snow are giving speeches.

Airport security also has been tightened, although no one at Friedman Memorial would discuss the influx of jet traffic.

“We don’t even acknowledge they’re here,” one airport staffer said.

Allen spares no expense courting his guests, current and perhaps future clients. He leaves flowers and fruit baskets, T-shirts and hats as gifts in their rooms. He pays for the hayrides, fly-fishing, horseback riding, skeet shooting, golf, yoga and skating lessons. One former tour guide in town estimates that some 250 people go on a one-day rafting trip, creating a caravan of 30 boats.

Of the 208 executives on the invite list, a copy of which was obtained by The Times, only a dozen are women. Still, Allen has been credited with making a concerted effort to include more women.

Every year, analysts and others track the conference for any hint of a mood shift -- or the next big deal. Away from telephones, management meetings and other distractions of daily corporate life, moguls have hatched major deals here over golf, tennis, a mountain hike or bike ride. Disney’s $19-billion purchase of Capital Cities/ABC in 1996 originated from a chance meeting in a parking lot here among Eisner, Cap Cities chief Tom Murphy and Buffett, a large shareholder of the TV company.

Last year’s gathering was slightly more sullen, given the climate of corporate accounting scandals. This year, the drama centers on Vivendi Universal’s auction of its U.S. entertainment assets. Several of the suitors are here or scheduled to arrive, including Vivendi Vice Chairman Edgar Bronfman Jr.; John Malone, chairman of Liberty Media Corp.; and Redstone.

Noticeably absent: top brass from NBC Inc. and Metro-Goldwyn-Mayer Inc., both of which are stalking Universal. “Maybe they are striking a deal,” joked one guest.

Conference sessions provide an opportunity for moguls and others to dispense pearls of wisdom -- and strut their stuff. Wal-Mart Stores Inc. CEO H. Lee Scott preached this week about the retailer’s cost-conscious culture, surprising many with the disclosure that when he’s on the road, he often shares a hotel room with the company’s chief financial officer.

Intel Corp. CEO Craig Barrett not only took the opportunity to talk about his company’s advanced wireless technology but brought 100 laptops so guests could have a hands-on experience, perhaps luring them into a business relationship.

When participants are not at formal workshops or listening to speeches, some gather for small meetings. On Thursday morning, a supercharged group of Microsoft and News Corp. executives -- including Gates -- talked shop at a table near the duck pond in front of the resort.

“We have a lot of issues to discuss,” explained News Corp. Deputy Chief Operating Officer Lachlan Murdoch, wearing a green rugby shirt. Murdoch’s 73-year-old father, Rupert, chairman of the company, couldn’t make it this year because his third wife, Wendi Deng, is expecting their second child in the next few weeks.

The conference’s colorful history dates back to 1983 when Allen created the conference as the ultimate networking weapon for his investment banking business. Among the most memorable moments that year was the sight of Rupert Murdoch falling out of his raft during a whitewater trip and floating feet first down the cold Salmon River.

In the early days, the gathering was an intimate affair, concentrated on entertainment, Allen & Co.’s specialty.

But as technology became more vital to Hollywood production and distribution, and new forms of entertainment sprung from Silicon Valley, the guest list expanded to reflect the times. Executives from Microsoft, Intel, Yahoo Inc., Google Inc., Amazon.com Inc. and Apple Computer Inc. are all fixtures today.

The consolidation in media that has displaced many top executives also has changed the guest list. Some regulars lost their invitations when they lost their jobs. Fallen Hollywood super agent Michael Ovitz, for example, is no longer invited.

As the event became more populated and more mainstream, certain rituals were dropped. Vanity Fair’s annual portrait of media bigwigs, photographed by Annie Leibovitz starting in 1994, was discontinued a few years ago because certain executives felt snubbed when they were not included and the group became too unwieldy.

The functions are closed to the media, although reporters have come in increasing numbers in recent years for the promise of catching a private moment with a mogul as the media industry undergoes sweeping consolidations and changes.

“This is crazy,” Comcast Corp. CEO Brian Roberts uttered to Hollywood producer-manager Brad Grey one evening this week after being mobbed by reporters and photographers from news organizations including wire services, CNBC, the Wall Street Journal, the New York Times and the Financial Times of London.

In 1999, Allen & Co. designated a press area on the premises. But after guests complained, the practice was discontinued. Some visitors still talk about how Redstone that year set up a director’s chair by the duck pond in front of the 250-room main lodge where he held court with reporters. On Wednesday, he talked with reporters for more than 30 minutes about the state of the media industry, one of the few full-fledged interviews during the conference.

Some say the media circus and the expanded guest list have eliminated the cachet of an invitation. And some are still offended by a subtle pecking order. Allen invites his best friends and clients to dine some evenings in his personal condominium at the resort.

Internet maven Diller has been among those special guests in the past and perhaps feels a little more emboldened than others.

Looking like a 10-year-old boy, dressed in shorts and sneakers, he enthusiastically peddled a bike across the resort’s manicured lawn in front of the duck pond. Disturbing the quiet of the moment, he yelled to another executive across the way, “Do you have a bike?”

With no taker, Diller turned onto the nearby walkway and wheeled into the distance, the cloudless blue sky and mountains as his backdrop.