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probably even getting the preliminary injunction, but he was still predis- posed to listen. "The notion was that Napster was only the first—there will be others to replace it," he said. "Here was an opportunity to main- tain a large customer base, potentially, and over time migrate it into a commercially viable system."

At a California airport on July 5, 2000, Bronfman met with Barry, Hummer, and others to discuss what Napster's business model might be. The ideas came fast and furious, but there was no technology available to make Napster legitimate, and the company was reluctant to charge its users. Without charging them, Bronfman said, there didn't seem to be any way that Napster could make a profit even before it paid artists and the record companies. Yet both sides realized the prospects for a deal were best before Patel ruled one way or the other—especially if she found that Napster was breaking the law, which would give any new owners a mas- sive liability headache. So Bronfman arranged for a summit meeting to be held with other label executives in the most conducive setting for deal- making he could imagine—investment banker Herb Allen's upcoming annual media-moguls-only conference in Sun Valley, Idaho, birthplace of the Disney-ABC merger and countless others.

Ahead of the meeting, Hummer planned to offer the labels just 10 percent of Napster's revenue. "I urged him to be more creative and more flexible, because nobody would stand for that," Bronfman said. And Nap- ster did up the ante dramatically, suggesting that the labels could share 60 percent of Napster's ownership. In the late afternoon on July 13, the two Napster directors met in Sun Valley with Bronfman, Bertelsmann CEO Thomas Middelhoff, Sony Corp. co-CEO Nobuyuki Idei, and Sony's U.S. chief, Howard Stringer. The meeting went well, and Idei and Mid- delhoff told Barry to keep dealing with Bronfman, who wanted to craft an industrywide deal. "We were very close," Bronfman said.

A week later, Hummer changed direction. "He said he had another offer for $2 billion, hinting that it was from AOL, and that unless we wanted to buy Napster for $2 billion, he would walk away," Bronfman said. Bronfman told him there was no way the record companies would pay that kind of money. He also didn't believe the AOL offer was real, that the company's directors would be willing to risk their pending acqui- sition of Time Warner on the Internet upstart. And that's what Bronf-