Media executives hold a dim view of the U.S. economy and consumer spending in the coming year, nervous about a weak jobs market, expected tax rises and the prospect of a double-dip recession.
Executives say the mood at Sun Valley -- at an annual gathering of the industry's prime movers and shakers -- had brightened somewhat from a year ago, when they were grappling with the deepest recession in decades. Advertising has bounced back and share prices outpaced the market this year.
But uncertainty reigned at this year's conference, with jobs data grim and housing numbers underwhelming. Europe's economic woes threaten to derail a nascent global recovery.
"The poison is the uncertainty," said Martin Sorrell, chief executive of WPP Plc, the world's second-largest advertising holding company. "It's not that you see anything, or you hear anything."
The downbeat mood defies a recovery in advertising and a rebound in the share value of most publicly traded media companies, which have outperformed the S&P 500 index in the past year. News Corp, for instance, is up more than 30 percent in the past 12 months, about twice the gain of the S&P 500.
Yet away from the back-slapping, rounds of golf, white-water rafting and presentations on the future of business, the media executives and financiers convened in the Western U.S. resort town of Sun Valley this year sounded a uniformly cautious tone.
"It's fragile out there, definitely very fragile," said Sony Corp USA Chief Financial Officer Rob Wiesenthal.
Joining the chorus, cable mogul John Malone — who controls Liberty Media Corp — also said he was "concerned" about the economy.
Some executives emerged from a Tuesday presentation on the future of healthcare by Aetna CEO Ron Williams even more worried about the long-term rising business costs, and what it could mean for their corporations and customers in an already-shaky environment.
The litany of doubts also encompassed concerns that the impact of the Obama government's fiscal stimulus was waning even as the latest jobs figures missed expectations. The United States added just 83,000 jobs in the private sector last month, while economists had on average expected around 110,000 new jobs.
"The economy feels like until we get some job growth and people feel more confident about their futures, that we're kind of getting bounced along," said Time Warner Cable Chief Executive Glenn Britt. While the worst appeared to be behind the U.S. economy, there was little chance of a real upturn without jobs growth, he said.
It is also widely expected that Bush-era tax cuts will get rolled back -- even as capital gains taxes and dividend yield taxes increase.
"You should be very worried about consumer spending in 2011," said Liberty Media CEO Greg Maffei.
"I don't know what double-dip means, but it's hard to get excited or optimistic about consumer spending. Most of us here have consumer-facing businesses and not to say the world's going to fall apart, but it's a long, hard slog."
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