Allen & Co’s Sun Valley media and technology conference forbids journalists from attending the morning sessions that executives and other media power players attend before they go out to play and talk about deals in the afternoon. That means the last, best hope they have is to get the low-down from a journalist who was invited.

There’s no pride in it, but at least you hear what happened from a reliable source.

In this case, that’s Ken Auletta, New Yorker media writer and author of several books about the media business. He moderated a panel about surviving in the digital age.

The answer? No answer, Auletta said.

Among the big minds pondering the issue were IAC/InterActiveCorp CEO Barry Diller, Walt Disney CEO Robert Iger (who on Tuesday told reporters that he’s not worried about how to get people to pay for content) and Liberty Media Chairman John Malone.

Questions asked at the session, Auletta said: How do you “monetize” on the Web? Can you? Is your “brand” an advantage?

Twitter, which is one of the media-anointed darlings of this year’s session, was also up for discussion, Auletta said. According to him, Diller said he was pessimistic about Twitter’s chances of making money. Auletta quoted Diller as saying it’s about “how to advertise in a way that doesn’t feel like an interruption.”

Interestingly, Twitter co-founder Evan Williams was in the audience at the session, Auletta said.
In keeping with the spirit of gloom and economic recession hanging over the 27th year of the Sun Valley conference, Auletta also told reporters about a session on finance hosted by CNBC anchorwoman Erin Burnett. The mood? Glum as well, he said.

Who was the most bearish guest there? Billionaire investor Wilbur Ross, Chairman and CEO of WL Ross & Co. Does that mean asset values are improving, leaving Ross fewer banks and other distressed properties to chase? Or is he just reflecting the spirit of the age?

Judging by the tenor of the conversations at this conference, it’s the latter.

(Photo: Ken Auletta, via Reuters)

Nearly every powerful media and technology executive you can think of will be camping out in the idyllic and affluent ski resort town of Sun Valley this week. Here are just a few…

Robert Kotick, CEO of Activision Blizzard, Michael Larson of Cascade Investments and Ron Meyer, president and COO Universal Studios arrive at the Sun Valley Inn.

Fashion designer Diane von Furstenberg and her husband Barry Diller, chairman and CEO of IAC/InterActivecorp, arrive at the Sun Valley Inn with Eric Eisner.

Philippe Dauman, CEO of Viacom, arrives at the Sun Valley Inn with his wife Debbie

Chairman of Liberty Media John Malone (and a gaggle of press)

Rupert Murdoch, chairman and CEO of News Corporation

Herb Allen, president and CEO of investment bank Allen & Company, which hosts the event.

(Photos:Reuters/Rick Wilking)

Ah the media, we love a ruckus. We really do. And when the two pugilists are characters as colorful and savvy as Dish Network’s founder Charlie Ergen (left) and Siriux XM Satellite Radio CEO Mel Karmazin (right) we do really get excited.

If you remember, Ergen was widely reported last month to have made a back door bid to take a stake in Sirius XM by quietly buying up some of the satellite radio company’s outstanding debt.  Analysts and experts came up with all kind of theories as to Ergen’s ambitions including taking complete control of Sirius on the cheap, combining various satellite assets, and kicking Mel out.

At the time Ergen ’s official channels at Dish and EchoStar declined to comment on the matter. So today’s Dish earning call was the first time we heard from the man himself on the matter. Well, it turns out the press was right on most things connected with the Sirius bid, according to Ergen. Except for one thing: he does not have bad blood with Sirius CEO Karmazin.

Here’s Ergen from the conference call:

I would take this opportunity to say one thing that clearly was not true is there wasn’t, at least I can speak for my end, there’s no annimosity toward Mel, Parsons [former XM chair] or anything like that.

I don’t know where they got that. Certainly not from our side.

Really?

Maybe the stories of an old feud were overplayed, but there might have something other than pure cold financial logic that influenced Mel’s final decision on this deal. Liberty Media beat Ergen in the bid for a stake in the beleaguered satellite radio business by offering to pay off Sirius’ due loans. In an interview with Reuters shortly after winning the Sirius bid last month, Liberty Media CEO Greg Maffei implied there may have been some… ahem, personality issues in its favor.

“There clearly is less enthusiasm for Charlie from some members of Sirius XM,” said Maffei.

We wonder which members those were?

So after two weeks of following all the twists and turns of Sirius XM’s attempts to avoid bankruptcy, CEO Mel Karmazin decided on John Malone, founder of Liberty Media, to come in as Sirius XM’s white knight with a $530 million loan . The loan will cover the satellite radio provider’s looming debt and help it avoid bankruptcy. As part of the deal Liberty will eventually take a 40 percent stake in Sirius’ equity.

But does this mean the big money deals that Karmazin signed with the likes of Howard Stern, Oprah Winfrey and Major League Baseball will get re-worked at a more favorable rate for the company now that there’s a new major stakeholder?

No, says Liberty Media CEO Greg Maffei in an interview with Reuters.

You can look and say some of these content deals were cut at a time when there were two guys (Sirius and XM) bidding against each other in a relative frenzy. Having said that, a lot of these content relationships like Howard Stern are very valuable to this company, have been important in building the company, and are likely to be important in sustaining it.

But Stern isn’t quite out of the woods.

I’ll rely on Mel and his team to think about how those content relationships look going forward and make the right decisions,” said Mafffei. “All those content (deals) have some term and they’ll get renegotiated or reset at that time for the value that they’re then creating.

With Sirius generating net operating losses which hit $217 million in the third quarter, it would make sense that Liberty might suggest that Karmazin looks at trimming one of its biggest outgoing cashflows: talent costs. But Mafffei seems not to agree.

I don’t think you look and say the way to build profitable business is to hammer the content deal here…as deals rooll-off you can appropriately look at those that are which are adding value and those that are not.

Sirius XM shareholders have seen a lot of dark days — face it, we’re talking about a stock that dropped to 15 cents a share. But today isn’t one of them. At least so far.

Indeed, shares of the satellite radio company jumped 100 percent after Liberty Media Corp agreed to lend it $530 million, allowing Sirius XM and its leader, Mel Karmazin, to sidestep a debt crisis.

The deal comes after a breathless week during which Sirius XM came under threat from EchoStar Corp and its top man Charles Ergen, a longtime rival of Karmazin, and looked very close to bankruptcy.

Now, Liberty Media Corp and yet another media mogul, John Malone, have come to the rescue. Here’s the deal, according to Reuters:

Under the agreement, Liberty would first provide a $280 million senior secured loan to Sirius XM, of which $250 million would be funded on Tuesday to help the satellite radio company repay $171.6 million in convertible notes maturing today.

Then Liberty would provide another $150 million loan to XM Satellite Radio, Sirius XM’s wholly owned subsidiary, and also purchase up to $100 million of XM’s credit facilities.

Once the loans are completed, Sirius XM would issue Liberty 12.5 million shares of preferred stock convertible into 40 percent of common stock.

While the markets are sorting through what all this means, you may want to check out a piece that ran in the Wall Street Journal this morning. It takes an interesting look at how Karmazin got himself into this crazy spot in the first place…

Last summer, after the long-awaited merger of Sirius with rival XM was finally completed, Mr. Karmazin needed to refinance more than $1 billion in debt that the combined company needed to pay off in 2009. But the 65-year-old chairman decided to hold off. The refinancing terms available, he said during an interview in early September, were “ugly” and he was under “no pressure” to get it done immediately.

But the looming deadline provided an opportunity for Charles Ergen….

As of this morning, it looks like he may have wiggled out of Ergen’s grasp. The question is, how does this play out long term?

Keep an eye on:

• Facebooks chief executive is trying to reassure users they they control their information, not the website (NY Times)
• Agency fees are the latest casualty in Anheuser-Busch InBev’s quest to trim $1.5 billion in costs out of the world’s largest brewer (AdAge.com)

(Photo: Reuters)

Cash is king for the New York Times right now.

The media world has been swirling with talk about the company looking to sell The Boston Globe and its stake in the Red Sox. Now comes news that the company has told securities regulators that it may sell shares or other securities to raise cash.

Remember, the New York Times has a $400 million credit line due next May. It also is borrowing $225 million against its Manhattan headquarters. The company has made other moves to conserve cash, including cutting its dividend by nearly 75 percent.

But raising cash isn’t all that easy in this environment. Yesterday two Boston businessmen denied they were interested in buying The Boston Globe or the Red Sox stake, and selling shares would only put more pressure on an already depressed stock price. Besides, while cash will buy the New York Times some breathing space, it hardly solves the long-term problems that are crushing the newspaper business.

Here’s the take from Silicon Alley Insider:

Any cash the New York Times raises in the current environment will be outrageously expensive. It’s also hard to imagine that the company will attract much interest from equity investors until it can articulate a plan for long-term survival that involves something other than selling off non-core assets (eventually, it will run out of these).

In our opinion, this plan will need to involve a major restructuring, including a reduction in the size of the company’s editorial operation by at least 40% (and, eventually, more, as the print business wanes).  Based on NYTCo’s response to the crisis to date, however, we suspect management will continue to hope for a miracle.

Keep an eye on:

• Madonna’s “Sticky & Sweet” concert tour was the biggest-grossing music tour of 2008 in North America, raking in $105.3 million, concert tracking magazine Pollstar said (Reuters).
• In a tough year for media, one mogul, John Malone, appears to have salvaged some semblance of value for his shareholders at the expense of another mogul’s shareholders (BreakingViews.com via NYTimes)
• NBC, mired in fourth place in prime time, heads into the final days of 2008 with ratings leads for its morning and evening newscasts (Hollywood Reporter)

(Photo: Reuters)

AOL has relaunched with a redesigned page. It has also unveiled a new ‘every email’ feature that allows consumers to access multiple email services and integrates access to social networking sites.

Effectively AOL is getting more ’social’ by allowing users to access not just AOL and AIM email on their AOL page but also Yahoo, Gmail and Hotmail. Paid Content points out that Hotmail is not directly accessible through AOL.com, so AOL is providing a link that can be inserted in one of the module email slots and and a link to Microsoft feedback so people can ask for the feature.

 In addition to being more open, AOL hopes the email aggregation will help recapture some of the user attention it lost before people leaving the ISP were allowed to keep their AOL addresses - Paid Content.

AOL said that over the next eight weeks, it will launch tools and features to further personalize the page. This means opening up AOL.com to third party content and services for the first time, including networking feeds like Facebook, Bebo, MySpace and Twitter.

Personalized Web pages like Netvibes or Pageflakes or even Google’s iGoogle and Yahoo’s MyYahoo have become more popular for users.

“For a portal to be relevant to consumers today, it has to recognize that users seek a variety of different experiences and connections with their various networks and information sources,” said Bill Wilson, AOL’s executive VP of programming. 

Keep an eye on:

• Disney says business is resilient despite the economy - (Reuters)
• CBS chief optimistic of U.S. TV ad market (Reuters)
• Liberty Media eyes merging DirecTV, Liberty Entertainment (Reuters)

(Photo courtesy of AOL)

Call it the new simplicity. IAC’s businesses are better off on their own in the market than trying to work with a strategic partner, according to chief mogul Barry Diller.
    
Recently empowered by a court decision that says he can do what he wants with IAC with little limitation from controlling shareholder Liberty Media, Diller said today a plan to spin off four major IAC units probably won’t involve any partners and that he was on track to complete the separation in August. 

Here’s his comments from a conference call to discuss quarterly earnings. We’re wondering how much of this may still be a negotiating position, or should we expect to see one big IAC, and four little IACs, trading on the Nasdaq before Thanksgiving: 
    

What we’re not discussing is the possibility of a so-called swap transaction with Liberty. While the potential for such a deal exists just by the nature of our relationship, I think it’s very unlikely that one will occur. 
 
Relative to private equity, we’ve had lots of discussions, we have lots of people knocking on the door and coming in and talking about different schemes and ideas. The truth is as we go through this, I think we’re not probably going to do any of them. I think that the best thing to do is simplicity. We may do one or some modified thing but I don’t think we’re going to do anything that would particularly engage (the) private equity world. 
    
The best thing is to get these companies spun out and to get them into the public markets, get their managements out there, so to speak, and taking care of their own businesses and talking to the investment community. I think that’s probably the better step forward for us at this point. 

For those watching at home, Liberty was mulling a swap for IAC’s HSN shopping channel, or maybe a smaller asset. Firms such as Quadrangle and Elevation Partners were also among the parties who have discussed taking a stake in another IAC unit.

(Photo: Reuters)

Media titans John Malone and Barry Diller knew they had their fair share of disagreements over the years, but like many couples heading to divorce, they apparently needed someone else to tell them that.

Enter Wall Street Journal reporter Jessica Vascellaro.

The media industry read with rapt interest her story in October that put in plain language how much tension had built up between the two over their partnership in IAC/InterActiveCorp. 

But as the two moguls duke it out in Delaware court this week, they keep invoking that story, day after day, as the moment that sent their relationship past the point of no return. 

Diller apparently understood the story as grounds to endorse a control structure for a spin-off of IAC businesses that would dilute the grip of Malone’s Liberty Media over the units. And that is what brought them to court today.
 
“It was kind of a verification in his mind they had gone over a significant line and the possibility of doing a transaction beneficial to both sides was becoming highly unlikely,” IAC Vice Chairman Victor Kaufman said when asked by Liberty’s lawyers.
 
IAC’s lawyers made liberal use of the story as well, asking Liberty CEO Greg Maffei whether he orchestrated the original interviews with himself and a usually press-shy Malone to send a message to Diller. They asked Maffei whether he tried to influence that story by flying the New York-based reporter out to Denver and talking up his views of Diller over several hours of travel time.
 
Maffei rebuffed that idea, saying  he didn’t come up with the idea for the flight, that there were other people on the plane and most of the time they spent playing the card game “Oh, Heck”:
 
[We asked Dow Jones about the flight. Here's their statement: "The Wall Street Journal attempted to reimburse Liberty for the flight, but the company subsequently returned the check. In keeping with our guidelines, we still intend to reimburse Liberty. We stand by the fairness and accuracy of our story."]
 
After it appeared, Malone said he had already guessed Diller’s reaction:
“I thought Barry’s not going to like this when he sees it. (Did you call Diller?) I should have but I did not. Because when I read it, it came across not the way I would have liked it to come across. 
    
In the end I did call. It was roughly two months later. (Apparently Diller told Malone of his one share, one vote plan during that call)”

(Photo: Reuters / Maffei in Sun Valley 2007)

John Malone is famous in the media industry for his complex deal-making skills that have confounded some of the best minds in business. But he seemed almost forlorn in Delaware court today when talking about the unraveling of his relationship with Barry Diller, the former television and film honcho who built up IAC/InterActiveCorp with his backing.About halfway through a rigorous cross examination by Marc Wolinsky, who was representing IAC, Malone’s responses gave us the impression that his lieutenant and CEO Greg Maffei had a hand in precipitating a difficult business dispute into all-out war. Here are some chapter headings from his direct testimony and cross-examination:The tension dates years back to Maffei’s role in Expedia’s sale to IAC. When Maffei was appointed CEO of Liberty Media in 2005, Malone said Diller branded it a “poor choice.”“I knew there was a history. I knew that Barry was complaining that there was no cooperation between Expedia and Hotels.com … he thought that was wrong. I’m not sure I was aware of any personality difference until much later.”By 2006, Maffei was making comments that questioned the solidity of Diller’s control over IAC, under a proxy agreement to vote Liberty shares. Barry had some feelings about that.“Mr Diller was very unhappy or upset that Mr Maffei would make these … claims or references, anything that would undermine his confidence that he had the voting power.”When Maffei and Liberty counsel suggested a way to weaken Diller’s proxy, Malone said he objected.“I told them that I regarded it as brain damage. (So what did you do when Maffei persisted in his argument?) I would assume that he has something in mind in terms of it being a viable legal argument, or because our lawyers are telling him they believe it’s a valuable and appropriate legal position.”By late 2007, Maffei took a more aggressive stance when it came to pushing Diller to compensate Liberty for the declining value of its IAC stake, Malone said.“I would say Mr Maffei believed it was in the interest of Liberty to try and separate our interests from IAC and Expedia. I think Mr Maffei can be pugilistic where these issues are concerned.”Because at the end of the day, Malone would be happy to make up with good ol’ Barry. Asked if he preferred to litigate their dispute in Colorado rather than Delaware, he said:“I didn’t want to have to sue Mr. Diller anywhere. I still hold him no ill-will and I still seek a win-win solution for our disputes. I don’t think any of us likes that we are having an open dispute after 13, 14 years of building value together.”Cue one Denver sunset please.(Photo: Reuters/John Randolph/ Liberty Media Corporation Chairman John Malone returns to Chancery court in Wilmington Delaware)