As media captains return from their annual Sun Valley retreat, a haze of ambiguity blankets the industry.

Between dawdling ad sales, changing technology and stalled deregulation, there is plenty to fret about. Investors once wooed by lofty consolidation promises are now being told just short years later that the synergies weren't quite what they seemed. Adding to the confusion, these companies feature countless moving parts and, in some cases, act essentially as the personal fiefs of hard-hitting but nonetheless fallible media titans.

And to put it mildly, the stocks of big diversified media companies have not fared well recently. Only

Disney

(DIS) - Get Report

, driven by a turnaround at ABC and its theme parks, has posted more than a token gain over two years.

So are the big media stocks dead? Hardly. But the challenges that lie ahead are substantial, and handicapping a winner among the big names -- Disney,

News Corp.

(NWS) - Get Report

,

Time Warner

(TWX)

,

Viacom

(VIA.B)

and

Liberty Media

(L) - Get Report

-- is anything but clear-cut.

"A number of these companies face big transactional questions," says Larry Haverty of Gabelli Asset Management. "Time Warner is being held hostage by the Adelphia transaction, Viacom by the split, Disney by concerns over new management and News Corp. by the situation with

Liberty Chairman John Malone. These create inhibited investors." Gabelli's multimedia trust has positions in the companies mentioned.

Doing Deals

That's not to say the companies aren't trying to move forward. Time Warner agreed this spring to a joint $17 billion deal with

Comcast

(CMCSA) - Get Report

to buy bankrupt Adelphia Communications, in an acquisition designed to expand its cable footprint. Viacom investors will be keeping their fingers crossed that two companies can draw investor interest where one didn't. New Disney CEO Bob Iger has made progress on many fronts, from

Pixar

( PIXR) talks to smoothing over board hostilities. And News Corp.'s Rupert Murdoch is said to be preparing a new cable business news channel.

But having stuck to their consolidation guns for the most part -- Disney, is selling its radio assets and Time Warner potentially is spinning off its cable division and its AOL Internet division -- these companies are seeing few easy growth plays.

"No big media companies are 'pure plays' in the attractive media growth sectors," says one media banker. "That is what Viacom is trying to create."

Indeed, Viacom hopes to scale down, split and then grow through new media and international markets in the hopes of stimulating investor interest.

The decision comes as all the big media companies are highly exposed to the slumping domestic ad market. Most key forecasters and analysts have dropped their estimates for the year, citing a tepid environment. The pharmaceutical industry,

Procter & Gamble's

(PG) - Get Report

decreased ad commitments and the disappearance of long-distance telecom advertising, along with a non-election, non-Olympic year, have all contributed to the slump.

"Viewership fragmentation and audience declines have led to low growth and multiple contraction, which keeps stocks down," says the media banker, who adds that concerns about the Internet, technology change and piracy continue to weigh on big media.

Spanning the Globe

Turning that trend around won't be easy, since big media has whiffed badly on attaching itself to any number of robust young industries, from gaming to the Internet. Meanwhile, the DVD gold mine has shown signs of fraying.

With so much focus on what happens domestically, big international initiatives are seldom mentioned. Viacom's Outdoor unit will ramp up on the roads of China as consumers there trade in their three-speed bikes for cars. Meanwhile, Disney is scrambling to get more channels in Asia and all are trying to exploit India and Asia.

Needless to say, observers have their own favorites. "News Corp. is doing just fine," says Haverty of Gabelli Asset Management, "and is seeing rapid improvement in satellite in Italy and Asia. There is stability at both Fox and 20th Century Fox."

Another investment banker says that big media has been "very late to the game" when it comes to developing international media channels, and that as they frantically try to build their overseas presences, seeing real returns will take time. He cautions that foreign governments aren't likely to be keen to see their media taken over by American companies, adding that the notion of instant growth overseas is a "bad assumption."

Indeed, Chinese authorities said this week that foreign ownership of media outlets will be prohibited. That remark could throw a serious wrench into the works for companies that have been lobbying for greater presence in that enormous market.

There seem to have been a lot of bad assumptions and missed opportunities over the past few years. Maybe the fresh air in Idaho last week will have left leaders invigorated for coming combat.