SUN VALLEY, Idaho (Reuters) - Small-sized acquisitions and strategic buys rather than blockbuster multibillion dollar deals will be on the minds of the media moguls and financiers who gather at this week's Sun Valley conference.
At the top of their shopping lists will be individual media assets such as TV stations, radio companies and newspapers rather than powerhouse takeovers similar to Comcast Corp's acquisition of NBC Universal last year.
That transaction marked the biggest media story of the year in 2009 and, like many of the industry's notable deals, was incubated here at the annual mountainside conference hosted by boutique investment bank Allen & Co.
BankStreet investment banker Scott Singer said this year's Sun Valley could possibly see more frenetic deal talk than in the recent past, considering there is close to $500 billion of private equity cash ready to be put into investments.
"TV network affiliates as well as radio stations are areas where, by virtue of upside down capital structures and a rebound in national and local advertising, the private equity community has a high interest to put funds to work," said Singer. "These factors will likely lead to a substantial amount of M&A activity in the coming months."
TV stations will indeed be at the heart of the one of the few potential big deals likely being discussed here: whether Walt Disney Co Chief Executive Bob Iger is ready to sell ABC, which analysts value at around $10 billion.
"Networks have never been run tightly with a really aggressive eye toward operating efficiently," said Larry Gerbrandt, principal at Media Valuation Partners.
"It's not unusual for the private equity guys to come in if they think they're possibly coming in at the bottom of the market, pick up the asset, restructure operations, make it a lot more profitable and spin it out as an IPO or sell it at the other end," he said.
That could happen to ABC, Gerbrandt added.
But size is not all that matters for the modern media mogul. Many are looking for deals to help their traditional media companies cope with the transition of their customers to various digital outlets, such as video game consoles and iPads.
In particular, executives, who typically avoid the press under Allen & Co's rules, will likely discuss mobile technology and social media.
"Something we've been spending a lot of time on is how do we focus on Facebook, Foursquare or MySpace -- the whole social media," said David Zavlav, chief executive of Discovery Communications Inc, said shortly after arriving at the Sun Valley Lodge. "People are going to spend more time on Discovery if their friends spend more time on Discovery."
Dennis Miller, a partner a venture capital firm Spark Capital, which has stakes in Twitter and Internet TV company Boxee among others, said traditional media executives are torn between the possibilities that social media presents -- and the risk of a foolish investment.
"They're still conflicted between seeing the post-AOL/Time Warner scar tissue and the realization that 'oh my god, my consumers are in places we never expected, there are 450 million people on Facebook'," said Miller.
How hot is the space? This year, mobile media & technology transactions are up by 188 percent, according to Jordan Edmiston. That includes small acquisitions by Apple Inc Yahoo Inc, Google Inc and Twitter.
"You'll see some mid-size acquisitions of Internet businesses in the hopes that it will help them transform, that one of them will hit big. They will place bets, but they will be relatively small bets," said Jonathan Knee, an investment banker at Evercore Partners.
Not all digital deals work out quite as hoped. News Corp's acquisition of social networking MySpace in 2005 has become something of an albatross around his neck for CEO Rupert Murdoch.
Not only has MySpace fallen behind rivals such as Facebook and Twitter, but it is now widely speculated that Murdoch will try to offload the social networking site.
Both Murdoch and his digital chief, Jonathan Miller, are expected here and will likely listen to any interest from media rivals or financial parties.
Murdoch has repeatedly denied plans to sell. But one factor that could decide whether a sale materializes is whether MySpace can attract another advertising deal similar to the three-year $900 million deal it struck with Google in 2006.
That deal is believed to expire in August and new talks are warming up, according to the Wall Street Journal.