• Reuters, Monday, July 6, 2009 1:44 PM

The annual Allen & Co. retreat for media company execs begins tomorrow in Sun Valley, Idaho, with the ominous backdrop of a global recession, shrinking advertising sales and fears that the Internet could render big media empires obsolete, Reuters reports. The annual conference will feature panel discussions about everything from globalization to the financial crisis, but the "real action" usually revolves around deals. Whereas last year was dominated by Microsoft's failed bid to buy Yahoo, this year's drama could lie with the likes of Time Warner, Viacom and CBS Corp, Reuters says, adding that bankers in particular expect dealmaking in Hollywood to heat up this summer.

"I would not be surprised if there was a big CBS story," said Mike Vorhaus, president of Magid Advisors, part of media consulting and research firm Frank N. Magid Associates. "They're a traditional company that is in one of the most challenged sectors in traditional media today."

Meanwhile, MySpace's new management team is expected to show up, as is Twitter Chairman Evan Williams, Google CEO Eric Schmidt and Dell CEO Michael Dell. A question mark hangs over the participation of Facebook's 25-year-old CEO Mark Zuckerberg.

According to a recent report from PricewaterhouseCoopers, U.S. ad spending is expected to fall an average of 1.7 percent a year to $174 billion in 2013 from $189 billion in 2008, with revenue declines likely to hit TV ads, the music business and publishers. During the same period, U.S. digital spending is expected to rise to represent 25% of total industry revenue.

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