Tuesday morning headlines

Apple competitor: Universal Music is backing a new service called SpiralFrog that allows consumers to download songs for free and rely on advertising for its revenues. The service, which will begin in December, could represent the biggest threat Apple and its iTunes store have faced. I mean, free is a lot better than 99 cents a song, right? The music companies also want to recoup some of the lost revenues from illegal file-sharing networks. A recent study finds that there are 40 illegal downloads for every legal one. An ad-based model is gaining support from other services, including L.A.-based Napster.

This sounds bad: The inventory of unsold new homes in Southern California reached its highest level since 1990 at the end of the second quarter, according to a report by the Real Estate Research Council at California State Polytechnic University, Pomona. L.A. County had 1,975 unsold properties, the most since 1995. But an economist at the California Building Industry Association says the numbers aren't that bad. Details of the report were in this morning's Daily News.

L.A. to OC: Southbound motorists beware. At or before 2020, more L.A. County residents will be commuting to work in Orange County than the other way around, according to a forecast by the Southern California Association of Governments. That's quite a switch from OC's days as a bedroom community and reflects the rapid job growth in the county. Last year Orange County had 38,175 new jobs, compared with 40,264 in Los Angeles County, but LAC is much bigger.

Do the deal: The breakthrough legislation that would make California a leader in reducing greenhouse gases is coming down to whether companies will be allowed to meet new emission restrictions through a market-based approach, which would allow them to buy and sell pollution credits. In its editorial, the L.A. Times calls for the Democratic leadership to beef up the bill's language about the market-based approach. Some evironmentalists are balking.

Long-term $3-$4 gas: That's what Chrysler CEO Thomas LaSorda expects for the rest of the decade (and that number might be higher in California). This could signal an acknowledgement by Detroit that it needs to put more emphasis on fuel-efficient cars. Chrysler has to pay special attention because so many of its vehicles sold are SUVs or pickups.

Oil execs profit: A new report finds that the top 15 oil executives in the U.S. brought home an average of $32.7 million in 2005 - or 50 percent more than what they earned in 2004. That's almost three times more than the average compensation for chief executives of large U.S. companies. Highest paid was Valero Energy Corp. Chairman William Greehey, who made $95.2 million, followed by Ray Irani, chairman of L.A.-based Occidental Petroleum Corp., at $84 million.

What will Sumner say?: Lots of friction between CBS head Les Moonves and Viacom head Tom Freston, reports the New York Post. Remember that CBS was spun off from Viacom and focuses largely on television. But Moonves has shown an interest in movies, which is Viacom's terrain (it owns Paramount). Both companies have Sumner Redstone as their chairman. Oy.

While we're on the subject...: If the overhead/development deal announced yesterday only involves a few million bucks, why wouldn't Tom Cruise just shell out the money himself and not worry about investors - especially know-it-alls like Washington Redskins owner Daniel Snyder? Paula Wagner, Cruise's partner, told the New York Times: "We wanted to be in business with entrepreneurs...This deal is about access and not about money." You mean Tom Cruise doesn't have enough access?

Union dispute: The union Unite Here has filed a complaint with the National Labor Relations Board that accuses the Hilton Los Angeles Airport of blocking hotel workers from the premises on their days off and putting them under surveillance. The workers have been participating in a union organizing drive. The hotel's GM says the charges are not true and part of the union's tactics.

Quiz time: Who would you say is the nation's most desirable retailer? Nordstrom? Netflix? Kohl's? Tiffany? According to the Kanbay Research Institute, it's La Canada Flintridge-based Sport Chalet Inc. Okaaaay... The results are based on a survey of consumers nationwide.