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Once again, Tim Rutten is on his holier-than-Times rant. This week, he focuses on those money-grubbing Wall Street types who are only after the fattest profit and couldn't care less about Pulitzers or foreign bureaus or anything else having to do with quality journalism - all of which is pretty much true. But so what? What planet has this guy been living on? Putting aside Rutten's naivete about the way business works (Tip: I've found...
LA Biz Observed archive
Mark Lacter covered business, the economy and more here from 2006 until his death on Nov. 13, 2013.
The entire LA Biz Observed archive — more than 10,000 blog posts by Mark —
remains online and available.
September 2006
Franklin Avenue takes up the rumors that Star 98.6 (KYSE-FM) will switch to a country format, filling the void left by the loss of 93.9 KZLA. Or might it be KBIG? Clear Channel owns them both. Also on Franklin Avenue is the new look for schlocky Channel 56, OC's KDOC-TV. One reader complains that "Perry Mason" has been taken off the nighttime schedule. It's still on at noon....
Last week, I gave the LAT a hard time for placing the jump to a feature about the retailer H&M opposite a full-page ad for H&M. Well, it's the WSJ's turn. This morning's front page has a below-the-fold story about Kirk Kerkorian wanting to buy another $400 million worth of GM shares and put pressure on the automaker to explore an alliance with Renault and Nissan. Right below the piece, on the bottom right, is...
The Senate signed off on a $448 billion military spending bill that includes enough money to fund a few more C-17 cargo planes. Lots of back-patting around Congress about keeping Boeing's Long Beach line open through 2009. Among those quick to take credit is Missouri Republican Sen. Jim Talent, who just happens to be facing reelection - and whose state just happens to have a Boeing facility that builds several C-17 components. Talent's press release...
Merrill Lynch and Citigroup have been brought on to help make recommendations to the board of the Chicago-based company - and parent of the LAT. The advisers, along with Tribune management, will present their ideas to an independent committee, which will then make its recommendations to the board. That's a lot to do in the three months they've been given. "In order to maximize shareholder value, our initial focus is determining the best strategic alternatives...
Note to union: Be careful what you promise. Thursday's LAX-area demonstration to protest the treatment of immigrant workers employed at airport-area hotels drew fewer people than had been predicted by union officials. LAT put the crowd estimate at 2,000; the Daily News had 1,500 and the Breeze 3,000. As part of the protest, about 300 people were arrested, which is technically more arrests than any labor action in 60 years. But the event had been...
EMI Group is selling the world's first circular building to developer Argent Ventures for $50 million. The music company has signed a long-term lease and plans to keep its operations in the building. You might remember the howls of protest when there was talk of converting the 13-story building into condos. Well, Argent has agreed not to go the condo route, but it will develop land next to the building. "Being able to become a...
But it was close. The index finished the day at 11,718.45, just four points shy of the all-time high close. It's often hard for the market to get beyond these milestones because so many sell programs are tied to the previous record. Back in May, the Dow neared its record high and then proceeded to fall 1,000 points. What's interesting about the current rally - fueled largely by low oil prices - is the amount...
Along with today's release of the quarterly UCLA Anderson Forecast was a study of Southern California's aerospace industry - and things are not as glum as you might think. Economist Jack Nickelsburg points to the small increase in Socal aerospace employment over the last two years (much of it in Orange and San Diego counties) as indicative of the area's transformation from a metal bending region, where military and commercial planes were assembled, to a...
All I want to know is whether my grilled chicken sandwich at Burger King has a suspected carcinogen. Seems simple enough - until the advocacy groups chime in. An outfit called the Physicians Committee for Responsible Medicine filed suit Thursday in L.A. Superior Court against seven restaurant chains, accusing them of not warning customers that their grilled chicken products contain a carcinogen. That would violate Propesition 65, which requires businesses to post warnings about food...
Times talk: LAT Publisher Jeff Johnson gets a mostly flattering writeup in the NYT. Without offering any details, story notes that "many" expect Johnson and Editor Dean Baquet to be fired sooner or later (Baquet has some 'splainin to do after Nikki Finke's column that has him and ME Leo Wolinsky looking for buyers). Speaking of that column (see LAO), what on earth is Finke doing with e-mails of reporter Ted Rohrlich? And about coverage...
UCLA's Anderson Forecast expects the declining real estate market to take a bite out of growth, but not create R-word problems for the California economy. That's because other sectors are holding up reasonably well. "Statewide home prices are unlikely to decline significantly unless there is a recession," writes economist Ryan Ratcliff. More noticeable price declines might be seen in new home sales (builders are more willing to cut prices than owners). As for jobs, the...
Vectibix is for the treatment of advanced colon cancer and is considered one of Amgen's most promising drugs. It was given priority review status by the FDA after showing effectiveness in slowing tumor growth. Priority review is given to drugs that offer major advances in treatment or provide a treatment where no adequate therapy exists. Thousand Oaks-based Amgen said it will be on the market next month. The stock was up 2 percent for the...
She's young and beautiful and has been in a lot of movies, but not many of them are very good. Certainly, they're not box office winners. All of which has BW's Ron Grover wondering whether she's become the new Ben Affleck. That is, a star who has no trouble finding work, but just not on the right film. Her latest role is in the box office bomb "The Black Dahlia." Before that was Woody Allen's...
Brace yourself, Web 2.0 is in full throttle. The latest evidence comes from a crazy valuation for Beverly Hills-based MySpace, which was bought by News Corp. last year for about $600 million. In a research note today, Jordon Rohan of RBC Capital Markets figures that the popular social networking site "should generate value of $10 billion-$20 billion within a few years." That assumes YouTube and FaceBook are worth $1 billion, and Google is worth $120...
Not that there was any doubt, but Univision shareholders signed off on the company's sale to a group of private equity firms and L.A. billionaire Haim Saban. Sale is expected to close next spring. Which, of course, begs the question: What will billionaire Chairman Jerry Perenchio do now? Who knows? And as all you Perenchio watchers know by now, we're not about the find out. Rule #1 is to stay clear of the media -...
Store owner Robert Blue, who had been holding out against the $400 million Hollywood and Vine development (the one featuring a W Hotel), apparently has come to terms with local officials. The Business Journal reports that under terms of the agreement, Bernard's Luggage Co. will be incorporated into the new development. A press conference is scheduled this morning to announce the agreement....
Dole woes: A third bag of Dole spinach has tested positive for E. coli, which puts the Westlake Village-based company at the center of the ongoing FDA investigation. According to the WSJ, (subscription required), four of the five lawsuits prepared by Seattle firm Marler Clark, which handles lots of food-borne illness cases, name Dole Food as a defendant. Aside from a Sept. 15 statement that said it was cooperating with authorities, Dole has been very...
The sale of the Spanish-language network will be formally approved by shareholders tomorrow at a special meeting in Los Angeles. The buyers are a group made up of investment firms Thomas H. Lee Partners, Texas Pacific Group, Providence Equity Partners and Madison Dearborn Partners - plus L.A. billionaire Haim Saban. As noted by the Hollywood Reporter, the new owners will need to make peace with Grupo Televisa, which already owns 11 percent of Univision and...
Would you believe that the Dow is within 60 points of its all-time high? Today's close of 11,669.60 is just shy of the record 11,722.98 on Jan. 14, 2000 - before a lot of bad stuff went down. Wall Street, as could be expected, was in prime guessing game mode. Are stocks peaking or on their way to never-before-seen heights? The WSJ's Marketbeat column notes that the recent gains have involved mostly large-cap issues. According...
With surprising ease. As I write in next month’s issue of Los Angeles magazine, the class division of haves and have-nots is not great social policy. But if you look at the numbers, the economy seems to be holding up remarkably well. For much of the summer, the L.A. County unemployment rate was under the national level, which is quite impressive for such a large, urban region (it went up a bit in August but...
It would have made for a nice story, but Russ Solomon has decided to pass on a bid for Tower Records, the company he founded 46 years ago. A court-supervised bankruptcy auction is set for Oct. 5, and as of a few hours ago only one bidder was confirmed - a Chicago-based private equity firm. A few others are expected. These new bids do not include the designated lead bidder, Woodland Hills-based liquidation firm Great...
How low can gas go?: The federal government's weekly survey found that the price of a gallon of self-serve regular in the L.A. area was $2.77, down from $2.86 just last week. Not sure how much lower pump prices will go, since oil seems to be stabilizing at around $60. LAX confusion: Pretty amazing report on KNX this morning about how TSA personnel were not aware of the new rules that allow small containers of...
The super-sly media investor John Malone has been in the news the last week or two for his possible swap of assets with Rupert Murdoch. Malone, through Liberty Media, gets control of DirecTV and in return he gives up a 19 percent interest in News Corp. It's a huge story, but there's another Malone machination that's getting relatively little play. His purchase of Burbank-based IDT Entertainment last month means that Starz, which Liberty also owns,...
Today's pullback wasn't huge - down 2.5 percent, to close at $33.15 - but it was telling. Analysts are beginning to weigh in on the company's options - leveraged buyout, spinoffs, asset sales - and some are finding problems with just about everything. In a research note, UBS's Brian Shipman sounded lukewarm about selling off the LAT (which Tribune says is not for sale). "To a certain extent, we feel that selling the paper would...
Economists at the National Association of Realtors cite a 1.7 percent drop in August home prices. "We've been anticipating a price correction and now it's here,'' said David Lereah, the NAR's chief economist. "The price drop has stopped the bleeding for housing sales. We think the housing market has now hit bottom.'' Not so fast, says Bob Hynes, senior market analyst at IFR Markets. "This is not the first time we have heard an industry...
Some years back, billionaire Alfred Mann, who made a fortune on medical devices, offered UCLA $100 million. He told the Business Journal in 2001 that he wanted a deal done and an Alfred Mann biomedical institute in place for the 2002-2003 school year. Well, it never happened. Mann grumbled about bureaucratic holdups, and at the time I tended to believe him. After all, he had managed to get the Alfred Mann Institute built at USC...
UAL Corp., the parent of United Air Lines, has hired Goldman Sachs & Co. to advise it on the possibilities of merging with another carrier, according to Crain's Chicago Business. There's been a fair amount of chatter of late about some sort of deal, with the likeliest candidates being Continental and Delta. If it happens, there would be huge ramifications for L.A. travelers. At LAX, United is the second-largest carriers, based on numbers of passengers....
Northrop must wait: Having lost out on two huge contracts in the past month or so, Northrop is facing an extended delay in the awarding of yet another big piece of government business: a $20 billion contract to supply aerial tankers. The Air Force wants to wait until 2009 before choosing either Northrop or Boeing, the WSJ reports. That provides more time to negotiate the best deal. "Sharecroppers on wheels": That's how L.A. cab drivers...
Special kind of reader: Tim Rutten harrumphs about how the Tribune executives just don't understand that LAT readers are less interested in local news than they are in foreign and Washington news, citing "decades of research conducted by the paper." "Editors who live and work in Los Angeles and Southern California understand these things about their readers," he writes. Huh? I must have missed the memo. Probably tied up covering all those insignificant local stories....
Advertising dollars are becoming closely scrutinized in Hollywood these days (they seem to really mean it this time), which is why Fox's agency review - now down to three contenders - is worth following. It's a $1 billion piece of business that will cover most of Fox's divisions worldwide. The contenders, according to Ad Age, are incumbent WPP Group, Aegis and Publicis Groupe - all global monsters. A decision is expected by the end of...
She's really out this time, resigning as Hewlett-Packard chairman and board member, effective immediately. She is being replaced by H-P CEO Mark Hurd, who himself is under fire for having been aware of the company spying on board members. At a press conference, Hurd apologized for the company's actions. Earlier, Dunn had announced plans to step down as chairwoman at the end of the year, but stay on as a board member. Wonder how today's...
BW's Ron Grover asks a quite reasonable question: Why would wheeler-dealer extraordinaire John Malone be interested in owning El Segundo-based DirecTV? If Rupert Murdoch couldn't make it work, why would he have any better luck? Part of the answer might involve WildBlue Communications, a Denver-based concern that provides satellite-delivered broadband services to 100,000 mostly rural homes. Most satellite services don't offer broadband, which has become a big selling point of the major cable services. WildBlue,...
Getting relatively little attention in today's stories about the Tribune announcement was a sentence buried in the press release. It relates to the terms of the Chandlers restructuring those two partnerships and it could become important as the company considers a sale. As part of the restructuring, the Chandlers own an additional 11.8 million shares of Tribune common stock, which gives them close to 20 percent ownership of the company. Here's the key point: the...
Tribune for sale: That's the upshot of the company's decision to "create additional value for shareholders," which is usually bizspeak for either a restructuring or outright sale. "Everything's on the table," CEO Dennis FitzSimons told the Chicago Tribune after the meeting. But FitzSimons put aside any discussion of the LAT being treated separately from the other assets on the block. "The L.A. Times is part of Tribune and not for sale," he told the WSJ....
Two important developments. First, the Chandler partnerships that were complicating any effort to reshape the company have themselves been restructured - but not dissolved. The decision to restructure came on a unanimous vote (with Chandler family representatives abstaining). Second, the board has established an independent special committee "to oversee management's exploration of alternatives for creating additional value for shareholders," according to a news release. That process is to be completed at the end of the...
Gov. Arnold Schwarzenegger made the announcement at a joint press conference with New York Mayor Michael Bloomberg after the two toured a fuel cell facility in the Silicon Valley. "We don't wait for the federal government to take the leadership on this. We are taking the leadership, but you can't do it alone," said Schwarzenegger. The legislation would reduce greenhouse gas emissions to 1990 levels by 2020 and is considered to the toughest greenhouse gas...
But it won't be a hotel. It will be a timeshare, developed through the company's Hilton Grand Vacations Co. division. The 28-story property on West 57th St. between 6th and 7th Avenues marks the first time a building designed exclusively for timeshare accommodations has ever gone up in Manhattan. Timeshares are still not a huge source of revenue for Beverly Hills-based Hilton, but growth has been considerable, with 2005 revenues of $554 million, up 32...
Shares close at $32.05, up 4.43 percent on the day. This morning's WSJ story about how the board might consider going private no doubt generated interest in the stock. But anecdotal comments among the larger shareholders would not indicate that the company is under the gun to make a decision anytime soon. Might be interesting to check out the stock in the coming days. If shares keep going up, it could mean that investors believe...
Word that the social network site Facebook might be sold to Yahoo for around $1 billion is a reminder of the deal Rupert Murdoch scored when he bought MySpace last year for $650 million. Facebook had 9 million visitors last month, which is a lot, but not nearly the 50 million that MySpace generates. Brad Greenspan, whose company bought what would become MySpace, said he regrets cutting the deal with News Corp. Well, he did...
"Radical Action" at Tribune?: That's what the Tribune Co. board will be considering today, according to the WSJ. Among the possibilities mentioned is taking the company private through a leveraged buyout. Story examines some of the tax complications in selling off Tribune properties piecemeal (which is why an LAT sale seems less likely, at least for now). From the story: While Tribune's board considered some strategic alternatives earlier this year, including a possible spinoff of...
Nikki Finke lays out the not-so-charming details of how United Talent's Nick Stevens got the heave-ho after 15 years. There's a lot of badmouthing and scheming going on (this is Hollywood, after all), but it boils down to Carrey's managers claiming that Stevens was spending too much time playing golf at Riviera, and Stevens claiming that Carrey's managers were orchestrating the comedian's move to CAA for their own financial interests. Here's how Finke opens: Few...
The United Fresh Fruit and Vegetable Association, not exactly known for big marketing efforts, will soon begin a return-to-spinach blitz, reports Ad Age. Details and timing seem undetermined - lots will depend on when the FDA gives the all-clear. The basic pitch, of course, will be that spinach is not only safe but good for you. Also looking at an ad campaign is Earthbound Farms, which has been at the center of the investigation. There...
It's being called a global warming suit against all the major carmakers. California Attorney General Bill Lockyer (his friends just call him Eliot Spitzer) said the federal suit is aimed at holding carmakers liable for all the harm that their vehicles have done to the environment and to the infrastructure. He's calling it a public nuisance - almost sounding like the tobacco lawsuits against Philip Morris. At 24/7 Wall St., Douglas A. McIntyre seems skeptical:...
The San Fernando Valley Business Journal is reporting that MGA Entertainment, the Van Nuys-based maker of Bratz dolls, is buying the Los Angeles Times' Chatsworth facility. MGA expects to use the location as its new corporate headquarters. No word on purchase price. You might remember that the Times announced the closing of its Chatsworth plant in late 2005. It resulted in the loss of 110 jobs and was part of the paper's effort to consolidate...
I realize the newsroom is distracted these days, but how on earth did this morning's jump to the story on H&M coming to Socal wind up on the opposite page of a full-page color ad for H&M? (In case you have the paper handy, it's on pages A20 and A21.) Layout editors are supposed to be scrupulous about keeping an ad about a subject - be it a store, movie or TV show - well...
Another Northrop loss: Wash. Post reports that Boeing Co. has won that huge contract to secure the nation's northern and southern borders. The company's proposal centers on a network of 1,800 towers that would be equipped with cameras and heat and motion detectors. L.A.-based Northrop had been in the running, along with Lockheed and others. LAT has a short pickup of Post story but no mention of local angle. H-P update: Isn't it appropriate that...
The big digital news is how well Disney did in its first week of offering movies on iTunes - 125,000 downloads worth $1 million in revenue. The company expects revenue of $50 million in the first year of the iTunes partnership. That's nice new money, but the real story could be over at Disney.com, which is in the process of being overhauled for a relaunch next year. That's where the company could center its entire...
It's not exactly open warfare - but it's getting there. An open letter to Tribune Co. is making the rounds in the LAT newsroom this afternoon. "We the undersigned members of the Los Angeles Times want to state our support and appreciation for the stand our publisher, Jeff Johnson, and editor, Dean Baquet, have taken on behalf of quality journalism and the newspaper we love," the letter states. Here's more: We hope their message resonates...
The gain was just under 14 percent for the day. That sounds like a lot, but with the stock closing at a little over four bucks a share, it's still pretty nickel and dime stuff. That may explain why Cannacord Adams is suggesting that Napster investors use the rally as a chance to get out while the getting is... well, not good, but at least better. (The L.A.-based company's 52-week high is $5.10.) Here's how...
The New Yorker's Elizabeth Kolbert says California's effort to cut greenhouse gas emissions "may well be the most important piece of legislation passed this year; certainly it is the most far-sighted." Actually, she uses the mandate - still to be signed by the governor - as a way of dumping on President Bush's energy policy. Six years ago, when George W. Bush was running for President, he called global warming a serious problem, and pledged,...
He's just announced the formation of The O'Neal Group, which will be looking for partnerships and joint ventures involving real estate deals in L.A., South Florida and Louisiana. A press release notes that O'Neal has amassed a $50 million portfolio of residential and commercial property. The O'Neal Group's first investment is a stake in The Met, the billion-dollar mixed-use development in downtown Miami. Terms not disclosed. Just a month or so ago Shaq cut five-year...
Tribune responds: As noted on LA Observed, Tribune CEO Dennis FitzSimons defended the company's ownership of the L.A. Times and reiterated that the paper was not for sale. In its story, the LAT finds a bunch of unidentified grousers in the newsroom and elsewhere. Meanwhile, Tribune's board will be presented with a plan to unwind two complicated partnerships with the Chandlers, which could set in motion a bunch of asset sales and other moves. It's...
Plenty, as Daniel Akst pointed out in Sunday's NYT. Here's his astute premise: Anything that reinforces the role of fossil fuels — particularly oil — as the industrial world’s primary energy source is bad, not good. Anything that prolongs the life of the internal combustion engine is a negative, not a positive. Anything that makes it cheaper to pump greenhouse gases into the atmosphere is cause for mourning rather than celebration. What we need is...
In case you missed it in Sunday's NYT, there's an opening to be dean of USC Libraries. It was pretty hard notice to ignore - a half-page horizontal ad in the Week in Review section that trumpets in two decks of large headline type: "Dean of USC Libraries University of Southern California" (a cool $80,000 ad by my calculations). Isaacson, Miller is handling the search. Besides the libraries dean, USC is looking to replace Geoffrey...
The government is days away from selecting one of several defense-aerospace firms - L.A.-based Northrop Grumman among them - to develop technology that would monitor the nation's northern and southern borders. Also in the hunt for what would be a multi-billion dollar contract are Boeing, Lockheed, Raytheon and cell phone maker Ericsson, according to a P1 Washington Post story. All year, the nation's largest military contractors have been locked in intense competition to team with...
Sumner and Rupert: Just about the last two media moguls who are readily identifiable by their first names. The LAT looks at how and why the two old guys keep on ticking. "I am Viacom," Redstone tells the paper in an interview. Murdoch wasn't available. There's also a sidebar about their two much younger wives and how they "can be revitalizing for aging lions." Well, that's one way of putting it. Selling the state: Senate...
The Wall Street Journal (subscription required) examines the growing pressures at Tribune Co. to sell the LAT. Still no sign that Tribune wants to deal. Scott Smith, president of Tribune Publishing, points out the importance of the LAT as a central source of content for the Tribune's other papers (that must make for happy reading at the Chicago Tribune). There's also the financial consideration: The Times contributes about a quarter of total revenue for Tribune...
Mid-2007 is the latest date for the opening of a downtown supermarket, the Downtown News reports. It's hard to keep track, but I think that's three years later than when the market was supposed to open. The delays have been a sore point among downtown boosters, who are often reminded by buttinskies like me that only the most adventurous urban pioneers would be interested in living in a place where there is no grocery store....
Spinach mystery: Coverage focuses on the ban of all spinach - except frozen - and the origin of E. coli bacteria that has killed one person and sickened more than 100. Along the way, we're learning more about the spinach processing business. Natural Selection Foods, also known as Earthbound Farm, is at the center of the investigation, but the San Juan Bautista-based company processes spinach under 31 brand names, including Dole Food and Trader Joe's....
In case you're focused on today's college games, Time Warner Cable, as promised, cut off the NFL Network from its lineup. A message on the screen informs viewers of the news: Regretfully, the NFL Network has been deleted from the lineup. We want to carry the NFL Network in a manner that is fair to all of our customers by placing it in a digital sports package. This way we can make the network available...
For more than a week now, Hewlett-Packard's Patricia Dunn has been pilloried on all fronts for her handling of the company's boardroom leaks. And now, as is often the way in these stories, another side is being told. Fortune's David Kirkpatrick says that Dunn's supporters paint a far different picture of what led to last week's meltdown. Much of the focus is on former director Thomas Perkins, who blew the whistle on the snooping of...
It seems a little premature since investigators don't even know who processed the spinach suspected of carrying the E. coli bacteria that so far has killed one person and sickened 100 more. One of the federal lawsuits against Westlake Village-based Dole Food was filed Friday in Milwaukee and claims two children were sickened by Dole bagged spinach that was bought in late August. Another was filed Thursday in Oregon, and you could be sure there...
The August jobless rate in L.A. County was a seasonally adjusted 4.8 percent, up from 4.5 percent in July but still considered quite low for such a large, urban population. The national rate in August was 4.7 percent. Statewide, unemployment was 4.9 percent, down from 6.3 percent in October 2003, when Arnold Schwarzenegger became governor. And yes, it was a campaign topic today. Total nonfarm employment in L.A. County was up 3,300 jobs, to a...
Satellite swap: Remember when Rupert Murdoch seemed almost obsessed with buying a U.S. satellite service that would serve as a prime distribution channel for News Corp. content? Well, he wound up with a controlling stake in DirecTV, but the satellite business has slowed considerably and now he's doing an about face - negotiating with John Malone's Liberty Media about a mega-swap. Under the deal, Malone would buy Murdoch's stake in DirecTV and give up Liberty's...
The numbers are especially big at the Port of Los Angeles, which saw a 21.4 percent increase in August traffic compared with a year earlier. That breaks out to 414,000 containers coming in and 377,000 going out. The Port of Long Beach saw a 9.7 percent increase from a year ago, with 348,000 containers coming in and 105,000 going out. The numbers would seem to allay any concern about a slowdown in imports - and...
Let's not underestimate Steve Jobs and Apple - certainly Business Week tech guys Cliff Edwards and Steve Wildstrom don't. But they offer up a healthy dose of skepticism over iTV, the $299 gadget that is supposed to transfer movies from your PC to your high-definition TV. This could be the missing link in the years-long effort to make downloaded digital media worth everybody's while. Except will it work? Steve: You were there when Steve Jobs...
The Pasadena-based dating service (I know they want to be called a "relationship service") was among several online sites mentioned as buyout possibilities by Tolman Geffs, managing director of investment bank Jordan, Edmiston Group. YouTube, Bankrate.com and Gawker were the others cited by Geffs during a presentation. There's been lots of online dealmaking over the past three months - many of them involving existing media players. Backgrounder: Revenues at privately held eHarmony are estimated at...
The lead bidder in the court-supervised bankruptcy sale is a Woodland Hills-based liquidating firm called Great American Group. That could signal the closing of Tower Records, as opposed to selling the Sacramento-based chain. Great American is mostly an auctioneer and liquidator, not a retailer. But a story in the Sacramento Bee notes that Great American "has participated in deals that keep companies open for business." And other potential purchasers could outbid Great American at a...
August revenue for the parent company of the Los Angeles Times fell 1.6 percent from a year earlier. Ad revenue at Tribune papers was down 2.3 percent, although a lot of that was due to the loss of preprint customers at Newsday. Exclude that and ad revenue was down 1 percent. But the elephant in the room was national advertising - down 11 percent due to "weakness across most categories." Nothing specific in the August...
Bold move: It's one thing for a bunch of civic leaders to sign off on a meaningless letter of protest to Tribune Co. executives about budget cuts at the Tribune-owned LAT. It's quite another for the LAT to play up the story, along with word of editor Dean Baquet's objection to the prospects of still more cuts at the paper. I guess war has officially broken out - too bad it's a trifle one-sided. By...
The 41-acre Carson site that had been the automaker's former North American headquarters is being sold to Kearny Real Estate Co. The L.A.-based real estate firm plans to lease or sell subdivided portions of the site. It's a big piece of property: Fourteen office and industrial buildings amounting to more than 700,000 square feet of space. Terms not disclosed. Nissan has moved to Tennessee, where it got a sweetheart deal....
You don't need a degree in economics to figure out that when home sales fall, apartment rentals are likely to go up - and be priced high. Los Angeles is among a dozen or so communities around the country with vacancy rates of 2.5 percent or less. The national rate is expected to be 5.2 percent in the fourth quarter. Anyway, the numbers are pretty much what you would expect. The most expensive locales are...
Some talk is starting to percolate in the music/media world about litigation against YouTube and MySpace over the posting of copyrighted clips. The sites themselves are not posting the stuff - it's users who are uploading the MTV-style material. The music labels make these clips available to AOL and Yahoo for streaming, but for a licensing fee. YouTube and MySpace have no such arrangement with the major labels. At Merrill Lynch's media industry conference this...
Or so says a spokesman for the oil company this morning, according to Reuters. About 1,000 barrels of a refined petroleum product began leaking from a BP-owned pipeline at the Port of Long Beach (a pipeline that the company acquired with the purchase of Arco). Obviously, there's lots of sensitivity here, considering what happened in Prudhoe Bay a few weeks ago, and yet the leak, first detected on Friday, wasn't disclosed until Tuesday afternoon....
Shares of the L.A.-based aerospace company are down a little this morning - no doubt influenced by a less-than-glowing Corporate Focus in today's WSJ. Since March 2003, Northrop stock has generated total shareholder returns of 67.8 percent. Compare that with Raytheon's 80 percent, Lockheed's 80.1 percent and General Dynamics's 164 percent. The basic gripe against Northrop is that its diversification efforts haven't quite matched those of Lockheed. Northrop is teaming up with the parent company...
H-P indictments: Everyone is all over the remarks made by California Attorney General Bill Lockyer that investigators have "sufficient evidence to bring criminal charges against individuals inside Hewlett-Packard as well as outside the company." Those charges could be filed as early as next week. Lockyer, who broke the news on the News Hour with Jim Lehrer - not exactly the place you would expect big news to be broken - wouldn't offer details. There are...
Rupert Murdoch is getting raves today with News Corp.'s purchase of a controlling stake in Jamba, a company that develops content for cell phones - and which is best known for developing that cackling "Crazy Frog" ringtone. While not nearly as big as his purchase of MySpace for $649 million, the Jamba deal shows how News Corp. is targeting specific bits of content that can be blended into its overall digital operations, much of which...
There's nothing like a steep drop in oil prices and a strong showing by McDonald's to get Wall Street excited. The Dow was up 101 points today, or 0.89 percent. But a bunch of Los Angeles-area companies did far better on a percentage basis, with several up four, five and even six percent (that's very unusual for the Socal stocks). There's not much secret to their success - if gas prices drop, it frees up...
The L.A.-based company will build a high-speed wireless data network designed to allow New York cops and firefighters to better communicate in emergency situations. That was a big problem in the early hours of the WTC disaster - and has become a big opportunity for defense contractors looking to diversify. Lockheed Martin is also moving into this arena; it signed a deal with New York's Metropolitan Transportation Authority to develop an electronic security system for...
As expected, Steve Jobs this morning introduced a book-sized device that can be attached to a television and receive programs from a home computer. Not just any programs - downloadable movies and TV shows. The iTV will be available in the first quarter of 2007 and sell for $299. The studios will be watching this one closely; they're all involved in downloadable services of one kind or another, but up to now all the offerings...
So much for retiring in December. Angelo Mozilo said this morning that he has been working with the board of Calabasas-based Countrywide Financial to "extend my role as CEO." A formal announcement is expected at the end of the month. As noted by LA Biz Observed over the weekend, Mozilo had been hinting for months that he wasn't ready to give it up. And the unexpected resignation last week of Stanford Kurland as president and...
Venturing too far: Nifty LAT story about how a little-known Century City venture capital firm called International Technology University has seen its big-name backers - and we're talking Harvard and a bunch of state pension funds - pull $120 million from the firm. A big reason is that the two partners, Chad Brownstein and Jonah Schnel, solicited political contributions from the businesses they financed, which is a big no-no for VC firms. Steve Westly was...
Patricia Dunn will resign from her post at Hewlett-Packard - but not until next year. H-P CEO Mark Hurd takes over as chairman, as many guessed would happen. She stays on as a director. Dunn is in the middle of a scandal involving the computer company's use of private investigators to get at the phone records of board members. She seemed to be holding her own late last week, but then the Justice Department and...
So much for all the grief the local hotels went through after 9/11, when nobody wanted to travel. The July numbers from PKF Consulting show that the overall occupancy level in L.A. County was 82.2 percent, up from 81.9 percent a year earlier (I remember when occupancy in the mid-70s was considered really good). As for room rates, Beverly Hills weighed in at a crazy $376.92 a night, up 20 percent from a year ago....
That's the threat anyway. The airline is ticked off over a scene in the network's "Path to 9/11" docudrama that has terrorist Mohammed Atta walking up to an American Airlines counter in Boston and later being allowed to board - despite Atta being flagged for buying a last-minute ticket. Never happened. The warning popped up when Atta boarded a plane from Maine to Boston - and the airline wasn't American. Here's what an American spokesman...
The Energy Department's weekly survey is just out and the average price of a gallon of a self-serve regular in L.A. was $2.970 for the week ended Sept. 11, down from $3.027 a week earlier and $3.132 the week before that. The last time it was under three bucks was April 17. By the way, oil prices have fallen so sharply - more than $11 a barrel since July - that some of the OPEC...
The Hewlett-Packard board won't resume their deliberations on what to do with Chairwoman Patricia Dunn until 6 p.m. The WSJ, citing "two people close to H-P," is reporting this afternoon that one holdup involves how to handle Thomas Perkins, who resigned from the board last spring to protest the company's unscrupulous - and possibly illegal - snooping into leaks. "He gets his prestige from sitting on corporate boards" and being an H-P board member was...
You're a union organizer trying to improve the conditions of janitors working at NBC Studios and Universal Citywalk. You hold press conferences and only a few reporters bother showing up. Coverage in the local press is sparse, at best. So what do you do? Why, produce a four-minute video for Youtube. It's part of an ongoing effort by the janitors union - Service Employees International Union Local 1877 - which has gotten support from most...
MGA Entertainment, based in Van Nuys and known mainly for being the maker of Bratz dolls, is buying the Little Tikes toy and equipment business from Newell Rubbermaid Inc. Terms were not disclosed, but Little Tikes contributed $250 million to Newell's 2005 revenue. The Atlanta-based company, whose brands also include Sharpie, Paper Mate and Rolodex - who knew? - has been selling off less profitable product lines. Backgrounder: MGA's hot item these days is a...
Very slow morning, what with all the 9/11 coverage. Speaking of which: Money angles: It's pretty tough to get away from five-year anniversary stuff this morning, although there's little you haven't heard before. Beth Barrett in the Daily News does a nice job in reporting on a lack of local government oversight in spending those millions of anti-terrorism dollars. In its P1 lead position, the LAT concludes that the local ports remain a vulnerable target,...
9/11 economy: Remember all those predictions that in the aftermath of the terrorist attacks the nation's economy would become more focused on security guards in office buildings than increased productivity? Well, it never happened. With the exception of certain industries - most notably the airlines - the economy kept rolling along. The WSJ (subscription required) has all the facts and figures. Again with the bathtubs: Once more, the LAT trails the pack on a trend...
That's Angelo Mozilo, chairman and CEO of Calabasas-based Countrywide Financial, and the question has been batted around since the nation's largest mortgage lender unexpectedly announced that its president, Stanford Kurland, had left. He will be replaced by David Sambol, who had been in the No. 3 spot. No one is explaining the turn of events (Countrywide announced the change in a press release that went out Thursday at midnight). Some had considered Kurland to be...
That's what several news organizations are reporting this afternoon. The emergency session, to be held by phone, will focus on how Hewlett-Packard's chairmanwoman Patricia Dunn authorized a team of security experts to examine the records of calls made by the company's board members and a bunch of reporters. In an interview with the WSJ today (subscription only), Dunn said she was "appalled" to learn that the snoops got access to the phone records by unscrupulous...
No big changes from the previous month, according to numbers prepared for the Business Journal by HomeData Corp. and released this afternoon (subscription only). The median price of an existing L.A. County home in August was $550,000, unchanged from July and up 5.8 percent from a year earlier. Year-over-year sales took a 32 percent tumble, though the comparisons with the summer of 2005 are tricky because sales a year ago were still quite strong. This...
The perceived risk of owning Hilton bonds has fallen by more than a third since June 22, according to data compiled by Credit Suisse Group. As Bloomberg News reports, investors are becoming more bullish on Beverly Hills-based Hilton after U.S. room prices rose an average 6.8 percent through the first seven months of 2006. Still, it's a tough climb back to respectability in the bond community. Peggy Holloway, a Moody's analyst, said the company is...
The Irvine-based semiconductor manufacturer is now talking about $1.5 billion in compensation expenses from past stock option grants - and possibly a lot more. Financial results from 1998 to 1999 will have to be restated. Broadcom said that it has been informally contacted by the U.S. Attorney's Office and is cooperating with the Securities and Exchange Commission's inquiry into stock-option grants. Shares in the stock have edged lower over concerns that the options problems might...
The Burbank-based Mouse House leads the way in Business Week's ranking of 50 best places to launch a career. Based on the cover story, it seems that much of the credit should go to Disney-owned ESPN (which is based in Bristol, Conn.). Here's how the piece opens: Like many other baseball fans, Joe Kosa, 28, is spending his Sunday glued to a TV. But relaxed he's not. Instead, the ESPN production assistant is stationed in...
10 Universal for sale: It's part of a 10-building portfolio that Beacon Capital Properties is putting on the block, reports GlobeSt.com. The properties could bring in more than $5 billion for the privately held real estate investment fund. Other properties are in Boston (John Hancock Tower), Washington D.C. and Denver. 10 Universal City Plaza has 36 stories and was completed in 1984. Owned by Universal, it was sold to Beacon and CarrAmerica Realty in 2003...
It certainly won't appease everyone, but the LAT's Scott Collins is reporting that the Disney-owned network has made changes in the film. That includes toning down but not eliminating a scene in which President Bill Clinton's security advisor declines to give an order to kill Osama Bin Laden. Also, the credits now say that the film, set to run Sunday and Monday, is based "in part" on the 9/11 commission report, rather than "based on"...
The WSJ's esteemed panel of economists see the housing market cool-down to extend into next year. But as usually happens when polling 48 economists, you can find most any answer you're looking for. More than half of those sampled expect either no change in prices or a decline in 2007. But five economists forecast gains of 5 percent or more. Go figure. On average, the economists said the likelihood of recession was 26 percent, compared...
After spending 30 minutes crawling for three miles on the 405, I'm not that surprised to find that our fair city has dropped to 12th place in a Harris Interactive survey of cities people would most like to live in or near to. That's down from 5th when the survey was last taken (though before that it's hovered in the low teens). New York is the number one city, as it is nearly every time...
The Detroit-based banks plans to open six branches in Southern California over the next six months. Locations will be in Anaheim, Burbank, Carlsbad, Century City, Hollywood and Tustin. By early next year, Comerica will have 70 branches in California, up from 42 two years ago. You might recall that Comerica began making its push into the state in 2001 when it purchased Imperial Bancorp. in a $1.3 billion deal. That bank had been led for...
In its constant effort to keep spreading the brand, Walt Disney Co. has introduced a digital camera line for children. The new Disney Pix digital cameras are designed for kids and "tweens" and are tied into Disney characters and themes. The new cameras, which start at $19.99 and include Disney branded photo editing software, are actually being made by an Atlanta-based outfit called Digital Blue. The cameras include branded designs around "High School Musical," "Pirates...
HP inquiry: California Attorney General Bill Lockyer has launched a criminal investigation into the boradroom leaks at Hewlett-Packard Co., with subpoenas already out. The SEC is also investigating. This is shaping up to be a major story, what with claims from high-profile venture capitalist Thomas Perkins that the company improperly recorded phone calls and e-mails. HP says it didn't eavesdrop, but engaged in "pretexting," which involves calling a phone company pretending to be a customer...
Stores open, stores close - and no one much cares. But the weird fascination with the expansion of the Swedish-based clothing chain H&M - dutifully reported over the months by Roderick in the other room - is something to behold. Curbed L.A. puts a little more fuel in the fire by noting that an H&M in West Hollywood is on the way. This might or might not be at the Beverly Center, depending on which...
Three likely bidders have submitted "letters of intent" and there have been expressions of interest from nine others. A lead bidder is expected to be named next week. After that there will be a second round of bidding, led by the lead bidder (sometimes called the "stalking horse"), which would set the floor price. No names were mentioned, but earlier documents said that potential bidders included Tower founder Russ Solomon and TransWorld Entertainment Corp. Tower's...
LA Weekly columnist Nikki Finke is reporting that David Geffen called Viacom Chairman Sumner Redstone yesterday morning and suggested that Jeffrey Katzenberg be brought in to run Viacom, presumably to replace the guy who just replaced ousted CEO Tom Freston. Redstone supposedly told him to forget it, according to Finke. But wait, there's more. Writes Finke: I hear Redstone even announced his AM conversation with Geffen. Jeez, ol' Sumner isn't going to be happy unless...
Good question. This was supposed to be the summer from hell, what with packed planes, a closed runway and no dropoff in flights. But traffic counts for July - the latest month available - show a 1.3 percent drop in overall traffic from a year earlier. International activity is down 4.2 percent, while domestic passenger totals are flat. LAX's passenger numbers have been flat to down all year (with the exception of April). Ontario International's...
Everyone has a real estate story - including Lisa Napoli, a reporter for public radio's "Marketplace" program, who writes of her adventures in this week's Downtown News. After finally selling her NY apartment, she's gotten all kinds of advice on what to do in L.A. ("Don't buy just yet, honey, the market's gonna tank," said a bank teller). It's still a little early for the fire sales - even with a recent drop in sales,...
That's where the L.A.-based premium jeans maker will be opening a retail outlet, one of 11 planned by the end of 2007. Set to open at the end of the year are stores in New York's SoHo district and on South Beach in South Florida. North Robertson, of course, has become a paradise for hip boutiques, among them Kitson, Madison and Lisa Kline. The foray into retail is one of several moves to expand the...
Paramount buzz: Brad Grey's future as head of Paramount Pictures gets lots of attention in this morning's saturation coverage of Viacom CEO Tom Freston's axing (wonder if they would do the same thing if the CEO of General Foods were let go). The WSJ's Merissa Marr gets right into it in paragraph five when she mentions Stacy Snider as a potential Grey replacement. Snider recently moved from Universal to DreamWorks SKG, which was acquired by...
It's headed that way. The government's survey released this afternoon shows that an average gallon of self-serve regular in L.A. was running $3.027 for the week ended Sept. 4, down from $3.132 the week before and $3.197 the week before that. A number of stations around town have dipped below $3 in the last week or two. If prices keep falling - and with gasoline you never know - it could become a significant plus...
A formal announcement is expected tomorrow, but AP is reporting that the deal is done. Purchase price is said to be $2.05 billion. It will make Vivendi the world's largest music publisher, ahead of EMI and Warner/Chappell Music. Also making a run at BMG was Viacom, Warner Music and a couple of U.S. private equity firms. Paris-based Vivendi owns Universal Music, and it still holds a 20 percent interest in NBC Universal. Company profile....
You remember Sky Dayton, don't you? The onetime owner of Cafe Mocha (Drew Barrymore used to work behind the counter) who started up AOL competitor EarthLink is now, at the ripe old age of 35, CEO of Helio, a startup phone service aimed at the MySpace crowd. Helio customers can make and answer calls, but there's also all kinds of videos and games available. He's also chairman of Boingo, which sells wireless hot spots to...
The problem, says a market research guy quoted in this week's Ad Age, is that it's not really Mexican food. What a surprise, right? The Irvine-based chain - and a unit of Yum Brands - is considering adding carnitas to the menu and doing more Spanish-language advertising. Still, it doesn't sound like they're quite getting it. "Food looks like food whether you're Spanish-dominant or Anglo-Saxon," said Debbie Myers, the chain's vice president for media services....
It's not even 1 pm. and we're well into the 90s throughout much of the region (though not yet in the 100s in many Valley locations). That's well above today's forecast highs, but so far there haven't been any warnings from state power officials. Today's power grid shows there's plenty of available electricity to meet demand. *3 p.m. update: Is it possible that Palm Springs is only 6 degrees warmer than downtown L.A.? (102 vs....
Sumner Redstone listens to what Wall Street has to say, so he can't be very pleased with the reaction so far this morning on his ouster of Viacom CEO Tom Freston (Viacom owns Paramount). He is being replaced by Redstone confidant Philippe Dauman. Here is a sampler of analyst comments, courtesy of WSJ.com: Jessica Reif Cohen, Merrill Lynch: This change is unexpected and is not likely to be well-received by the Street or the creative...
Freston out at Viacom and more morning headlines
Time to catch my breath after five weeks of fun-filled biz-blogging. Really, it's been a blast, and I especially appreciate all the kind words and encouragement as I figure out how to get better at this game. There might be a quick post or two over the weekend, if there's any news worth writing about. Otherwise, see you Tuesday....
Novel enough for magazines to rank them. Forbes' just-released list of the world's 100 most powerful women includes five that are based in L.A. - and, not surprisingly, they're all in show business. But none of them act (well, not in front of the camera anyway). Here's the rundown: #15 Anne Sweeney, co-chairman of Disney Media Networks (ranked just behind Oprah). Forbes calls her "gentle" and "self-effacing," which must be a first in Hollywood. Sweeney...
As you've probably noticed, there's a lot of heat over CBS agreeing to divide "Survivor" teams according to race. The latest to chime in is the Wall Street Journal editorial page, which for once had the institutional good sense to call this a very bad idea, "playing up identity-politics divisions in a crude and potentially rancorous way." This week, GM decided to pull its advertising from the show, and while that quickly made news because...
Northrop hangover: The LAT reports that Northrop Grumman executives "were stunned" when NASA's multi-billion contract for the Orion manned space capsule went to Lockheed Martin - a deal that could be worth more than $8 billion. No one is talking on the record, but there's buzz that Lockheed may have gained an upper hand because it was willing to allocate the work in states like Florida, which put together a package of tax breaks and...
Mark Lacter
Mark Lacter created the LA Biz Observed blog in 2006. He posted until the day before his death on Nov. 13, 2013.The multi-talented Mark Lacter
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