PREVIEW-Media players plot survival in Sun Valley

* Allen & Co Sun Valley conference from July 7-12

* Expected guests include News Corp, IAC, Viacom CEOs

* Recession, Web threaten media business models

* Wave of movie, TV dealmaking expected

By Robert MacMillan

NEW YORK, July 5 (Reuters) - The global recession, shrinking advertising sales and fears that the Internet could render big media empires obsolete provide an ominous backdrop for executives at this week's Sun Valley conference.

Herb Allen's boutique investment bank Allen & Co has organized this retreat in the affluent mountain resort town in south-central Idaho every summer for 27 years, inviting guests such as Rupert Murdoch, Sumner Redstone and Barry Diller.

But never before have the media elite been harder pressed to find ways to survive and grow, whether through acquisitions or alliances that they forge over hikes, horseback rides and after-dinner drinks at this historical meeting ground for media and technology deal makers.

"People in the traditional media world are terrified," said Ken Auletta, a New Yorker magazine media writer and author of several books about the media industry, who will chair a panel on new media at this week's conference.