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Computer Sciences Corp., the big data processing company based in El Segundo, did an interesting thing today. It notified the Securities and Exchange Commission that thousands of stock option grants had been improperly dated in one form or another covering a period between 1996 and 2006 - and that the company might need to record an additional $68 million in expenses as a result. In its internal investigation, CSC has determined that 9,234 stock option...
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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 —
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February 2007
Shares of the Santa Monica-based mortgage lender were down 20 percent this morning after the company postponed filing its fourth-quarter earnings. No reason was given for the delay, though Fremont plans to file an explanation with the Securities and Exchange Commission by the end of the week. It's certain to rattle investors because Fremont handles a lot of subprime loans - and we all know what a mess the subprime business has been these last...
It was built for the 120-episode ABC series that ran from 1966 to 1968, and some unidentified private collector sold it at auction to some unidentified private museum in the Cayman Islands (that already sounds suspicious) for $233,000. Apparently, that was 50 percent higher than the upper estimate, thanks to four or five bidders who kept bidding up the price. There were a bunch of Batmobiles made for the series; the original, which is valued...
The just-posted NYT story said the market "showed tentative signs of recovery" and that pretty much sums up a 60-point gain on the Dow so far this morning. As we suspected, Federal Reserve Chairman Ben Bernanke provided some comfort by telling Congress that the economy has not taken a sudden nosedive and that the financial markets were working well. He's talking about moderate economic growth, which is what Wall Street wants to hear. As for...
Market opening: The Dow is up after an hour of trading, but not by that much - about 80 points. This could be the kind of day when comments by Federal Reserve Chairman Ben Bernanke about the state of the economy will be widely watched. AP More economic worries: It turns out that the national economy grew at just a 2.2 percent annual rate in the fourth quarter - not the 3.5 percent initial estimate...
Throw a batch of more data onto the debate. This time, it's a University of California at Davis economist who concludes that immigrants actually help increase - not decrease - the wages of native-born Californians. Giovanni Peri called his findings "remarkable" because it contradicts previous research. Between 1990 and 2000 alone, when new immigrants accounted for a 20-percent increase in California's employment, the average real wages of native workers in California rose by 4 percent....
And it's not one of the names that have been bandied about. Several news organizations are reporting this afternoon that ad executive Joe Uva, CEO of media buying agency OMD, is about to be offered the job. The Spanish-language media giant is in the process of being acquired by billionaire Haim Saban and a group of private equity firms. Uva has a couple of key challenges: Generate a bigger chunk of advertising dollars (rates are...
How bad a day was it? Well, at one point during the session 1.46 billion of the 1.5 billion shares traded were on the downside. That's a 50-to-one ratio in favor of declining volume - the widest spread since 1997. As explained by MarketBeat's David Gaffen, these massive down days are often not just isolated incidents. Going back 30 years, they can be a harbinger of uglier times ahead - or in some cases, huge...
At a little after 11, the Dow was down more than 200 points. As is often the case during really bad selloffs, there's no single explanation. Some analysts will point to a market plunge in China or Vice President Cheney being the apparent target of a Taliban bombing attack in Afghanistan or a worse-than-expected durable goods report. But many on Wall Street had become convinced that after an eight-month rally, the market was due for...
Market down sharply: The Dow is off more than 120 points in early action, probably in response to a huge drop in the Chinese stock market. The plunge in China - the biggest in a decade - doesn't appear to involve any bad news, just a volatile market and investors wanting to cash in on big gains. There's also concern about the deteriorating conditions in Iran and Afghanistan. We'll see how all of this impacts...
There's being generous - and being ridiculous. By having an unlimited grace period to return consumer electronics products for a full refund, Costco's profit margins had been squeezed and earnings pared, to the tune of eight cents a share last year. So Costco today announced it was changing its policy. From now on, customers have 90 days to return electronics items for a full refund (still sounds like a pretty good deal). The revamped policy,...
The numbers are still preliminary, but it looks as if the veeeery lengthy telecast actually drew a slightly larger audience than last year. We're talking just under 40 million viewers, though the numbers varied throughout the evening. Viewership peaked between 6 and 7 (that's when Jennifer Hudson got her Best Supporting Actress Oscar) and then fell after 8:30 - just in time for sleepy East Coast audiences to miss out on the big awards. ABC...
A short story in the Sunday paper (picked up by Talking Biz) notes that business coverage moves to the back of the B section and that Sunday stock listings will be kept to one page. The Web site offers specific stock quotes. Now that most dailies have sharply cut back on stock listings, prepare for the other shoe to drop - the loss of section fronts. Already, some smaller papers are shoving business sections inside...
The L.A.-based Spanish-language network being slapped with a $24 million fine for trying to pass off telenovelas as children's programming is definitely a step in the right direction, but the Washington Post's Frank Ahrens suggests that it's just the tip of the iceberg. When it comes to being regulated, Univision has gotten away with murder - especially since its reach in the Spanish-speaking media is so vast. Consider that the broadcaster is likely to get...
Superchef Joachim Splichal is getting into the chain steakhouse business. Smith & Wollensky Restaurant Group Inc. is being acquired by Patina Restaurant Group for about $80 million - a 12.8 percent premium over S&W's closing stock price on Friday. It's a little confusing because as part of the deal, S&W CEO Alan Stillman is buying back from Patina the chain's NY restaurants. In doing the deal, S&W is turning down an unsolicited offer from Houston-based...
"The Departed" financials: This year's best picture is shaping up to be a solid financial success. Box Office Mojo reports that the domestic and foreign box office is now at $278.3 million on a production budget of $90 million. But that's pretty much it on the the theatrical side because "The Departed" has already gone to DVD. In years past, late-arriving best pictures were able to grab a few more dollars at the box office,...
This is the so-called self-help proposal in which the company is split into separate broadcast and newspaper divisions and shareholders get a one-time dividend of up to $20 a share. It's a pretty dicey proposition because Tribune would have to borrow a ton of money to pay for that dividend, and the lenders might want to cuts costs even further. Under the plan, reported by the LAT this afternoon, most or all of Tribune's 23...
The L.A. homebuilder issued a release this afternoon saying that the Department of Justice is looking into KB's past stock options practices but that the company itself is not a target. Earlier, Bloomberg News quoted unnamed sources as saying that KB itself was under criminal investigation. What all this suggests is that the company is desperately trying to distance itself from former CEO Bruce Karatz and former human resources head Gary Ray, who are at...
Don't expect me to sniff around for angles to the video showing a dozen or so rats having their way at a NY KFC/Taco Bell, but... It just so happens that both chains are owned by Yum Brands Inc., which hasn't exactly been forthcoming in the recent E. coli outbreak at Taco Bell stores in NY, NJ, Pennsylvania and Delaware (Taco Bell is based in Irvine). Yum said a 5 percent drop in quarterly sales...
So has the world's biggest coffee house chain gone a little too far in its expansion efforts, at the expense of making the brand look and taste just like everybody elses? Well, yeah - and Starbucks Chairman Howard Schultz has fessed up to as much in a Feb 14 memo to the company's senior executives. In the memo, first posted on something called starbucksgossip.com, Schultz says that the stores "no longer have the soul of...
Bloomberg News is reporting that the L.A.-based homebuilder is under investigation by the U.S. Attorney's Office in Los Angeles over stock options backdating. No other details at this point - including how far along the investigation is - and as usual in these matters, no one is talking. The investigation likely centers on the role that former CEO Bruce Karatz had in the backdating of KB stock options. Basically, KB is now saying that Karatz,...
A Valencia landscape company made news early in the week when some of its employees got stuck in Bermuda because of all those JetBlue cancellations - and it got me wondering (well, it was more like questioning) why some local company was gallivanting to Bermuda in the first place. Well, Landscape Development CFO Tim Myers told me all about it. Each year, the company has a business retreat for many of its employees (not just...
Even by the loosy-goosy standards of today's private equity financings, this one really stands out. The L.A.-based Spanish-language media company was bought by billionaire Haim Saban and a bunch of private equity firms last fall for $13.7 billion (including debt) - and the new owners are borrowing $10 billion to get the deal done. That's 12 times earnings before interest, tax, depreciation and amortization, which over the long haul is asking a lot of any...
LAX loses out: Those monthly passenger counts at the airport routinely show signficant drops in international traffic because travelers - and airlines - are taking their business to SF, Vegas and even JFK. Since 2000, LAX has lost 12 percent of the seats on its weekly international departures, while other major U.S. gateways posted gains in service to foreign destinations. L.A.'s airport is simply too small and old and uninviting - and it's taken a...
Forget about Oscar-related goodie bags - it's all about "branded retreats," where the already ridiculously rich and famous are being treated these days to the pleasures of expensive food, drink and maybe a spa treatment. The NYT's Sharon Waxman focuses on Soho House, a stone manor built in the 1920s that's been turned into a British-style private club. But there are others - all underwritten by dozens of corporate sponsors. On Leslie Lane in Beverly...
Well, it's what you might expect. Fortune looks at 10 markets to see what's available for five million bucks. Here's the tale of the tape, courtesy of Coldwell Banker and Realtor.com: Los Angeles •ZIP: 90049 •Price: $4.99 million •Beds/Baths: 5/7 •Square feet: 5,408 •Acres: 0.78 St. Michael's, Md. •ZIP: 21663 •Price: $4.9 million •Bed/Baths: 3/3.5 •Square feet: 11,000 •Acres: 16...
Greed as opposed to fear - and yes, the market mavens actually study the yin and yang of those two conditions. As explained by MarketBeat's David Gaffen, the Fear & Greed Index indicates that investors are getting a little overexcited. The index compares the balancing act between equities and bonds and without getting too technical, let's just say that the thing is pointing in the direction of "irrational exuberance." In other words, this could be...
The world has truly gone nuts. I don't how I could have missed this one, but THR confirms that a project called "Odd News Underground" will be launched before the end of this quarter. "This project will create an entirely new kind of news beat, so stay tuned," said a Yahoo spokesman. "All I can say for now is that this reporter will leave you tapping your feet." The singing anchor is the first venture...
L.A.-based Revver is a video-sharing site that's backed by some big-time venture money. Microsoft execs toured Revver's offices last month, according to CNET News.com, perhaps looking at a way to enhance their own video site, Soapbox, which recently went live. Revver's biggest calling card is embedding ads in video files and tracking how and when the ads are watched. Obviously, a lot of media companies would be interested in that technology, though the site is...
Eater L.A. has gotten word that Osteria Mozza, which is part of the Nancy Silverton/Mario Batali/Joe Bastianich casual Italian empire, will be opening its doors in April. Pizzeria Mozza, which has already opened to glowing reviews, is pretty much impossible to get into, so maybe the new place will open up some more tables. The restaurant is apparently staffing heavily, so if you're interested, there will be "open calls" over the next three Mondays. From...
BW's Ron Grover takes a look at the so-called Oscar curse - and yes, you've probably read about it many, many times. In fairness, Grover has been covering Hollywood since 1871, and how many new Oscar angles are out there? Thing is, the curse manages to hold up, year after year - most likely because winning an Academy Award is often more of a popularity contest than a measure of excellence. Among Grover's rundown of...
Ron Burkle's payday: You don't think he became a billionaire out of nowhere, do you? It looks like the L.A.-based Burkle will be making in the neighborhood of $40 million - not including commissions - on the Whole Foods purchase of Wild Oats. Burkle, who first invested in Wild Oats in 2005, now has an 18 percent stake in the company. The Whole Foods offer is $18.50 a share. Burkle, of course, has been a...
Clearwire, billionaire Craig McCaw's latest venture, just selected the L.A. office of DDB to handle its advertising, according to Ad Age. It's a $25 million account, which in local ad circles in pretty substantial. Launched in 2003, Clearwire has raised around $1 billion from big-time invstors that include Intel and Motorola. It's a wireless broadband Internet Service Provider with 162,000 customers worldwide and service in 35 markets. An upcoming IPO is expected to raise $400...
Wild Oats Markets, whose largest shareholder is L.A. billionaire Ron Burkle (technically Burkle's investment arm, Yucaipa), is being sold to Whole Foods Market for about $565 million. Whole Foods is offering $18.50 a share, which is a 23 percent premium over Wild Oats' one-month average closing price. (The stock was under $16 today.) Already, Whole Foods is talking about "significant synergies" through cost reductions in overhead, which makes you wonder what will happen to some...
At least according to Page 6 of the NY Post. The story is that someone from Clinton's office placed a call to someone in David Geffen's office to complain about last night's shindig that the DreamBoys put on for Barack Obama at the Beverly Hilton. Clinton was said to be furious at the three "who she thought were friends," according to the Post, which is typically vague about the attribution. The DreamBoys are apparently telling...
It's over the airport's plan to sharply increase terminal rents, a plan that the airlines say will eventually result in fare increases. Seven airlines - Alaska, AirTran, ATA, Frontier, Midwest, Southwest and U.S. Airways - have filed a formal complaint with the U.S. Department of Transportation. LAX already faces a federal lawsuit from three other airlines. To summarize: the airport is looking for more operational money from the airlines, claiming that the terminal rents are...
Downtown boom?: It's a happening place, according to a study by the Downtown Center Business Improvement District. The LAT trumpets a 20 percent "jump" in population over the last two years. Nice. But if you look at the actual numbers, it turns out that downtown has a population of just 29,000 - and that the percentage increase amounts to 5,000 or so new residents. Geez, there are more people at the corner of Westwood and...
Outgoing NBC head Bob Wright lays out the particulars in an interview with Fortune's Tim Arango. It was 1994 and as Wright explains it, he thought the deal was pretty much done. But then-Disney CEO Michael Eisner slept on the proposed sale and changed his mind the next morning. (Disney eventually got ABC.) On another occasion NBC was almost sold to Paramount Pictures, but Paramount head Martin Davis wound up selling the studio to Viacom...
It's from something called the Donald T. Sterling Graphic Design Foundation and it's a request - well, more like a plea - to do something about those hideous full-page ads that appear from time to time in the LAT. Now I realize that the Times isn't in much of a position these days to raise a stink about the look of any one ad, but M.S.G. Quixo bravely raises the issue in a Web presentation...
Item #1 The WSJ's Charles Forelle, James Bandler and Mark Maremont win a George K. Polk Award for revealing the widespread practice of backdating stock-option awards that have allowed executives to increase their compensation. The stories set in motion federal investigations involving more than 130 companies (including a dozen or so in Socal). Item #2 DealBreaker's John Carney says that the WSJ's reportage "rests on a very fundamental misunderstanding of how options are awarded." Carney...
The L.A.-based warehouse chain, which was started 136 years ago when no one knew what warehouse chains were, was picked up by private equity giant Apollo Management for $813 million, including debt (the $22 per share offer is 15 percent above Friday's closing price). A French supermarket company called Casino Guichard-Perrachon SA owns about 52 percent of S&F stock and had been talking about unloading the U.S. chain for many months. Actually, Smart & Final...
The NBC-owned Latino cable channel Mun2 obviously isn't interested in political correctness, at least judging by its new image campaign that breaks this week. Prepared by the Miami ad firm La Comunidad, the commercials ask viewers: "Are you becoming too gringo?" by taking shots at the assimilated Latino society. The answer, according to the attitude-heavy ads, is Mun2 (pronounced "moon dos"), which is the sister network of Telemundo and airs mainly music videos. In the...
No, not City Hall, but the Seventh Street Market, where the Department of Public Health has been finding all kinds of nasty critters and contamination. All told, criminal complaints - but not charges - have been lodged against 24 vendors and the market operator, Alameda Produce Inc., which is owned by downtown's parking lot king, Richard Meruelo. Empty office space above the market has become a breeding ground for vermin. From this week's Downtown News:...
Gelson's deal: The high-end supermarket chain has reached an agreement with the United Food and Commercial Workers that apparently eliminates the two-tier wage system that was at the center of the labor dispute in 2003. The Gelson's contract, which must still be approved by the rank-and-file, follows an accord between the union and Stater Bros. Contract talks are being conducted this time by the individual chains - not as a group - and both Gelson's...
SmartMoney sits down with Amgen Chief Executive Kevin Sharer for its March issue and finds a CEO with "a militant look," which isn't all that surprising given the business he's in. The Thousand Oaks-based biotech company is duking it out with both Johnson & Johnson and Roche over franchise products. There's pressure from Washington to reduce Medicare reimbursement - plus the usual pressure from Wall Street to keep cranking double-digit growth. "The development of biopharmaceutical...
The NY Post reports today that the long-awaited Sirius and XM merger is expected to be announced today, barring last-minute complications. The WSJ just posted a short story on its Web site that says the two are "nearing an agreement but have yet to ratify a definitive contract." Even if a deal is announced, you can expect lots of federal antitrust scrutiny, although the companies will argue that the issue isn't the lack of competition...
JetBlue founder and CEO David Neeleman messed up big time during last week's winter storm (well, his airline messed up), but at least he was willing to take the heat - and we're not talking about some PR-driven apology that has all the earnestness of voice mail. We're talking about a guy who really seems sorry - almost falling-on-your-sword sorry. He told the NYT's Jeff Bailey that he was "humiliated and mortified" by the breakdown...
It's one of the biggest L.A. real estate deals ever. The NY investment firm Blackstone Group is selling 23 Socal properties to Maguire Properties, including the 52-story Two California Plaza downtown. Maguire is already downtown L.A.'s biggest landlord (it owns the 72-story U.S. Bank Tower and the 42-story One California Plaza), but the Blackstone deal also includes a bunch of OC properties (Tower 17 in Irvine and Stadium Towers Plaza in Anaheim). The sale appears...
•Socal is expected to add 1.1 million jobs and 2.2 million residents over the next 10 years, according to the Center for Continuing Study of the California Economy. “The question is whether residents and political leaders are committed to making the region a great place to live and work so that companies and families will want and be able to locate here,” said Stephen Levy, director of the independent economic research organization. Business Journal •Tribune...
The president and COO of Universal Studios is apparently the subject of a Times investigative report that focuses on his gambling history, according to Nikki Finke, who finds that the subject matter is "the type of tabloid journalism associated with the National Enquirer." Basically, Finke says that Meyer's gambling is not illegal, doesn't impact on his job and has long been known by his employers and many folks in the biz. Apparently, Times reporter Kim...
C'mon, who needs reality TV when you can have real reality TV? Superior Court Judge Larry Paul Fidler said that the murder trial of rock 'n' roll producer Phil Spector can be televised from start to finish. "There's going to come a time that it will be commonplace to televise trials," he said today. "If it had not been for Simpson, we'd be there now." Fidler said that Simpson's judge, Lance Ito, got a bum...
Stamps.com keeps managing to defy the naysayers, most recently in a fourth-quarter profit that was above analysts estimates and seemed to have come out of nowhere. That explains why shares closed up almost 19 percent. "People were not expecting anything good and, in fact, many were expecting it to continue to get worse," Craig-Hallum Capital analyst George Sutton told Reuters. Stamps.com always seemed like an interesting concept - buying postage over the Internet - that...
What's up at the Beverly Hills Hotel? Check out p36 of Citybeat and you'll find a display ad for host/hostess, engineer, barbacks (that's a bartender's assistant), food runners, bussers, security officer, logo shop clerk (I haven't a clue), dishwashers, room service cashier/order taker, room service/busser and asst. pastry chef. Maybe all those job openings are typical at a big, luxury hotel, but it wouldn't inspire much confidence if I were checking in. By the way,...
It's not fourth-quarter earnings that's getting Wall Street in a tizzy this morning. Actually, the L.A.-based restaurant chain reported a 7 percent increase from a year earlier, nicely above analysts estimates. The problem is the first quarter. California Pizza Kitchen lowered guidance because of bad weather, minimum wage pressure and more costs connected with opening new units. BB&T Capital Markets analyst Barry M. Stouffer lowered his rating to "Hold" from "Buy," citing disappointing volume and...
Broadcom probe revealed: The WSJ and LAT provide some details on the federal investigation into backdating stock option grants at the Irvine chipmaker. The Journal reports on an e-mail from former CFO William Ruehle in which he urges that Broadcom options be priced at an earlier date than scheduled, providing extra profits. Prosecutors are seriously considering filing criminal charges against Ruehle, using a bunch of those e-mails. Meanwhile, both the Journal and LAT report that...
L.A.'s famous jazzspot isn't confirming but Eater L.A. has gotten hold of a sale listing for an "upscale jazz club" that pretty much fits the bill (wording in the sale sheet is the same as on the restaurant's Web site). Sale price is $1.7 million. You might recall that Catalina moved a couple of years ago from its old digs on Cahuenga to a roomier spot in an office building on Sunset. I hope this...
Are corporate boards, especially those sitting on compensation committees, personally liable for issuing options just before the release of good news, a practice known as springloading? Well, yes, according to rulings by Chancellor William B. Chandler III of the Delaware Chancery Court and spelled out by NYT columnist Floyd Norris in his Friday column. “It is difficult to conceive of an instance, consistent with the concept of loyalty and good faith, in which a fiduciary...
Good luck. Here it is two months after the holidays and it's very tough to keep the thing in stock. For the unintiated, the Wii uses a wireless controller that manages to translate the players' motions onto the screen. So unlike other videogame consoles, you're actually moving around to bowl, play tennis or whatever. It's generating lots more buzz than the Sony PlayStation 3 (borne out by Sony's earnings results), and while there's still some...
NY magazine came across this pitch from a casting producer for Magical Elves Productions (home of "Project Runway," "Project Greenlight," "Last Comic Standing" and other stuff) who is looking for candidates to be on something called "America's Next Producer." The pitch begins this way: "Think you have what it takes to be the next Jerry Bruckheimer, James Brooks, JJ Abrams or Mark Burnett? Then we want to hear from you!" AMERICA’S NEXT PRODUCER is a...
Airbus snubs LAX: The airport shelled out $9 million in order to accommodate the new A380 jetliner on what was supposed to be its maiden voyage to the U.S. Well, forget about it. Airbus has instead decided to touch down in NY next month, followed by Chicago the next day. The 555-passenger A380 won't make it into LAX until June. The airport had been counting on the test flight as a marketing and promotional tool....
Got any Power 106 listeners out there in LA Biz Observed land? Well, the L.A. hip hop station (actually it's in Burbank) is celebrating Valentine's Day with something called "Trash Your Ex." The idea is to collect all your keepsakes from past loves and place them into a giant wood chipper as DJ Big Boy describes the action. But here's the best part: you get to actually see the action because "Trash Your Ex" will...
January's median price was a still-hefty $520,000, down 0.9 percent from December and up 6.1 percent from a year earlier. It was the best showing of any Socal county, especially when compared with the price slumps in San Diego and Ventura County. The question is whether L.A. proves to be a lagging market when it comes to price declines. L.A. sales continue to slump, down 6.9 percent from a year earlier. Throughout Socal, just 18,128...
NY keeps nibbling away at L.A.'s movie-making supremacy (they still have a ways to go). Steiner Studios, Brooklyn's largest studio and part of what they call "Hollywood East," plans to expand to 600,000 square feet by renovating a seven-story building in the Brooklyn Navy Yard. Steiner is where "Spider-Man 3" and "Inside Man" were made. The number of film, TV and video productions in the city reached an all-time high last year, in part because...
NBC pulled the love-it-or-hate-it show off the network lineup a week ahead of schedule. The plan all along was to premiere "Donnellys," a crime drama, on March 5, but "Studio 60" had its lowest ratings of the season on Monday night - a 2.8 among adults 18 to 49 - so maybe the network brass figured enough is enough. NBC said the remaining "Studio" episodes will air at a later date (like maybe opposite the...
It's not an L.A. story, but I couldn't resist. The 60th birthday party of Stephen A. Schwarzman, chairman of Blackstone Group, was held at the Seventh Regiment Armory on NY's Park Avenue and as the NYT aptly reported, it was a coronation. Schwarzman is not just a billionaire several times over, he's the head of the most prominent private equity firm in the world - the same firm that just completed a $39 billion purchase...
V-Day: Florists will be averaging $30,000 per shop today - part of the annual lovesfest in which 189 million roses will be sold, according to the Society of American Florists (two-thirds of today's flower purchases will be made by men). Restaurants, of course, will be jammed (might be a good night to stay home and cook). The Daily News offers the names of a few places that may still have openings. Credit card follos: Lots...
If you're paying attention to the veeeery early action on Intrade, one of the more popular prediction markets, Hillary Rodham Clinton has about a 50 percent chance of being the Democratic nominee and a better-than-even chance of winning the general election. John McCain is the favorite for the Republican nomination, but he's being hurt by his position on the war in Iraq. OK, so what's the deal? Well, Intrade is a Web site that allows...
In its 10K filing on Tuesday, L.A.-based KB Home provides a little more detail on the internal investigation into former CEO Bruce Karatz's involvement in selecting the grant dates for stock options. Basically, the company found evidence that Karatz used "hindsight" in securing favorable exercise prices for seven of eight annual stock option grants since 1998. "Hindsight" apparently means backdating - in other words, Karatz looked for low points in KB's stock price and used...
Good luck. The L.A.-based homebuilder reported a mish-mash of a fourth-quarter that had a $50 million net loss - better than what Wall Street was expecting. My question is how Wall Street could put an estimate on a company that's become very hard to read, what with declining land values and high cancellation rates and of course the ongoing stock options scandal that KB's new CEO, Jeff Mezger, managed to avoid talking about during this...
Leonardo DiCaprio seems to have a thing for business-themed movies. There was "The Aviator," of course, and his Oscar-nominated performance in "Blood Diamond" - and now he's cut a deal to star in and produce the story of Enron's collapse. It will be based on "Conspiracy of Fools," the bestseller by NYT reporter Kurt Eichenwald (now a writer with Portfolio magazine). "Based on..." is certainly the way to put it - DiCaprio will play a...
Enjoying your new cable service? Well, now you can buy shares of Time Warner Cable, which will begin trading next month on the NYSE. This has been in the works for months as TWC finished up some very complicated negotiations with bankrupt Adelphia Communications, which served much of L.A. until a couple of months ago. As part of the deal, Adelphia creditors will have a 16 percent stake in the new cable company. Actually, it...
Most indicators are pointing to a good, if not great, economy over the next 12 months. Jack Kyser, chief economist of the L.A. Economic Development Corp., will lay out his projections at the EDC's 2007-2008 Economic Forecast Conference next Wednesday morning, Feb. 21, at the Los Angeles Marriott Downtown. Also speaking will be Leslie Appleton-Young of the California Association of Realtors, Richard Weiss of City National Bank and Steve MacDonald of FilmLA Inc. The program...
The problem with region-wide transportation efforts is that everybody has to sign on. Otherwise, the plan falls apart. Such is the case with trying to ease congestion at the area's airports. I'm playing catch-up on a Monday Daily Breeze story about Orange County refusing to take a seat on a regional alliance that's pushing for growth at smaller suburban airports. OC residents make millions of trips to LAX every year, but the county doesn't want...
KB's red ink: The L.A.-based homebuilder lost $49.6 million in the fourth quarter, compared with a profit of $304.4 million a year earlier. That was better than analysts expected, but it included $340 million in charges the company took to lower the value of its housing stock and pull out of land purchases. Orders have fallen as the inventory remains high. KB Homes CEO Jeffrey Mezger said he expects unit deliveries to decrease "through the...
Tribune goes it alone: It's looking more likely that the Chicago-based parent of the LAT will turn down those few ho-hum outside offers and instead focus on a self-help restructuring. WSJ reports, as others have, that the latest plan gaining traction will spin off the Tribune television stations and borrow money to pay out a one-time cash dividend to shareholders. Tribune's board is expected to go over the plan this week. From the WSJ: The...
It's the first time he hasn't been in the Riviera field since 2002 and it's likely to have a big impact in both the TV ratings on CBS (Woods almost always boosts the numbers, except when he's not in contention) and in the gallery gate. One mitigating factor will be the presence of popular Phil Mickelson, who will be playing here for the first time since 2002. No reason was given for Woods' decision to...
There's no mention in the just-filed News Corp. 10-Q of Judith Regan’s severance agreement, which Michelle Leder over at Footnoted.org finds a little odd. Not only that, there's no mention of the situation - and with it, any potential liability that News Corp. might face if it's dragged into court by the ex-head of ReganBooks. At last check, Regan attorney Bert Fields keeps threatening to sue, which is a sure-fire sign that the two sides...
So what's wrong with negotiating a contract that included stock options dated months before the contract negotiations even began? That, according to the WSJ, is apparently what Pixar's Steve Jobs was up to when he worked out a deal with animated director John Lasseter - and yes, it's that nasty backdating stuff. But perhaps it's backdating ... with an explanation. John Carney at DealBreaker.com says that Jobs may have known about the options grants and...
This is the one developed by the L.A. office of Deutsch that had a robot being thrown off an assembly line because he dropped a screw. He's so upset about not meeting GM's quality standards that he jumps off a bridge - except it's all just a dream. Anyway, a suicide prevention group started to complain, and the automaker, after initially saying it wouldn't change the ad, now says that it will. A GM spokesman...
Pixar backdating?: WSJ reports that Pixar head Steve Jobs (he's also Apple's CEO in his spare time) helped negotiate an employment contract with animated-film director John Lasseter that included a large stock-options grant with an especially well-timed date. Other Pixar options have had grant dates at suspiciously low levels. Pixar is now part of Walt Disney, which is conducting an internal probe into how Pixar handled its options grants, and the feds in SF are...
News Corp. Chairman Rupert Murdoch confirmed that it's going to happen once Sacha Baron Cohen fulfills another contract (I'm assuming it's his "Bruno" film with Universal, scheduled for a summer 2008 release). Speaking at McGraw-Hill's Media Summit, Murdoch said "we laughed like hell" after the first screening. Afterward, "we went out to dinner and laughed all over it" again. Then, he said, "you wake up the next morning and you say 'God, that was gross.'"...
Forbes and the WSJ (there may be others) are reporting that EMI Group has been in advanced talks to sell music downloads in an unprotected MP3 format to online retailers that include RealNetworks, Yahoo!, MySpace and Napster. Forbes, however, notes that negotiations "slowed dramatically" today, putting the deal in jeopardy. An unprotected format means that EMI music could be freely copied and played on virtually any device. Steve Jobs has endorsed the idea of selling...
Billionaire Ernest Rady's home in La Jolla had no locked gates, security guards or guard dogs. All it took an intruder was buzzing the intercom and saying he had documents for "Mrs. Rady" to sign. When the wife and a housekeeper opened the door, the suspect pulled out a gun and forced his way in. They were bound up - as was Mr. Rady when he arrived two hours later. Here's Robert Frank's take in...
Limited posting today and tomorrow. Tribune earnings: All that cost-cutting is apparently having some effect because the Chicago-based parent of the LAT reported a 78 percent jump in fourth-quarter earnings. The good-looking numbers announced this morning (99 cents a share vs. 43 cents a year earlier) were helped by one-time gains that covered some small asset sales. But ad revenue took it on the chin - a 4 percent increase was due to an extra...
Horrendous, hideous, agonizing, insufferable, unendurable, unbearable - am I getting warm? Well, the government came out with its annual report card covering on-time arrivals, lost baggage, customer complaints, etc. and 2006 was not a year anyone wants to repeat. About 75 percent of domestic flights arrived on time last year, the lowest since 2000. LAX ranked 15th among individual airports, at 77 percent. A year ago, it was ninth, with an 80 percent on-time rate....
A new study says there’s an increased risk of leukemia in breast cancer patients who take Amgen’s Neulasta and Neupogen. The Columbia University study showed that close to 2 percent of those who took drugs to increase white blood cells later developed acute myeloid leukemia, as compared with only 1 percent of the women who didn’t take the treatment. But as is typical in these studies, not everyone agrees. Some analysts say that the study...
What's it like to be on board a plane that carries 500-600 passengers? Today was media day for the A380 and BW's Carol Matlack was among about 200 journalists who took a two-hour test flight over the Pyrenees and Bay of Biscay. It wasn't exactly a real-life test (when's the last time you were in a plane that was less than half full?), but Matlack says that the experience is definitely different. From BW: Surprisingly,...
Prototypes of Condé Nast's much-hyped and long-awaited business glossy, Portfolio, are making the rounds in NY, which is kind of noteworthy, but the bigger buzz is how the magazine plans to have a major Web presence (quite a contrast to other Condé Nast pubs). "Print writers are definitely writing for the Web," a source told the NY Observer. "Portfolio is a magazine being born in the 21st century," said former NYT star Kurt Eichenwald, who...
The Mouse House scores big with first-quarter earnings of 79 cents a share, compared with 37 cents a year earlier (the most recent results include a gain of $1.01 billion from the sale of interests in E! Entertainment and Us Weekly). Excluding the one-time stuff, quarterly profit was 50 cents, beating the estimates by a dime. Much of the good news stems from strong DVD sales for "Pirates of the Caribbean: Dead Man's Chest" and...
As could be expected, Jeff Zucker's promotion to CEO of NBC Universal has led to chatter about whether GE Chairman Jeff Immelt is committed to holding onto the media giant, a business quite different from making jet engines and refrigerators. Citing a source close to the company, the NY Post reports that NBC Universal might not be in GE's long-term plans. Adding a little fuel to the speculation was outgoing CEO Bob Wright, who told...
Zell enters the ring: The Chicago real estate magnate has approached Tribune Co. with a proposal that may include taking an equity stake in the company while adding debt to fund a large dividend for shareholders. Sound familiar? That is essentially what Broad and Burkle had in mind in their efforts to take over Tribune. The Chicago Tribune, which is reporting the news, says that Zell might need to enlist the McCormick Foundation in order...
Yeah, we're talking off the charts, but here goes: Millennium Hotels (operator of the Biltmore) is offering what it calls the "Whirlwind Romance" that starts in L.A., continues to London and finishes in NY. Tomorrow is the deadline for signing up, so pay attention. The L.A. leg includes: 1)Two nights in the Biltmore's Presidential Suite (nine presidents have stayed there). 2)VIP tickets to the Los Angeles Museum of Contemporary Art (no word about taking home...
Premiere magazine is not for sale, according to its publisher Hachette Filipacchi Media U.S., but Ad Age is hearing industry rumbles that the company has been looking for joint venture partners to help prop up the U.S. edition and bolster Premiere's international editions. There's also chatter about expanding the digital operations at Premiere and other Hachette publications. The NY Post reported yesterday that the struggling entertainment mag was on the block (and despite the denials...
Sort of. It's Barneys New York Co-Op, which opens at The Grove next month and offers more casual apparel and accessories than the original Barneys - and supposedly aimed for a younger market. (Younger than the Barneys in Bev Hills? Now that's depressing.) It will be a pretty small space - just 9,000 square feet towards the west end of the center (where the Amadeus Spa used to be). For the less-than-hip, the Co-Op began...
But she seems to have taken product placement a bit far. Theron had cut a deal with Swiss watch designer Raymond Weil in which she would only wear Weil watches - and no jewelry from any other company - in exchange for a "very substantial sum." So what was she doing in an online ad wearing "faux canary diamond jewelry" from Dior? And Montblanc jewelery in a billboard ad? And a Christian Dior watch at...
This is one of those intriguing wire stories that's based on very scant information but gets picked up nonetheless. OK, here goes: A Bahrain newspaper is reporting that Saudi billionaire Prince Alwaleed bin Talal is in talks with investors to develop an $8 billion Disneyland theme park. That's billion. No clue on whether Walt Disney Co. itself is involved, but Bahrain has been trying to attract this kind of massive development - and there's certainly...
Let's see, you're a news organization that covers major corporate goings-on and you hand out "leadership awards" to some of the same people you're supposed to be covering. CNBC televised its third annual Executive Leadership Awards Monday night (the event took place on Jan. 31) and it got Chris Roush at Talking Biz News wondering about, er, a slight conflict of interest. The cable biz channel handed out awards to Citigroup CFO Sallie Krawcheck and...
Hollywood deal: The dilapidated Seven Seas building across the street from Grauman's Chinese has been bought by CIM Group, which plans to restore the property to its original 1920s style. In the midst of all the improvements on Hollywood Boulevard, the building has stuck out like a sore thumb. Building owner Eddie Nash said he finally agreed to sell after a CIM executive "wore me out." The Seven Seas was once home to an island-themed...
The connection between who wins the big game and how stocks will perform for the year has proven to be less than a sure thing, but OC Register columnist Jon Lansner has found a close correlation between the Super Bowl winner and Orange County housing prices. Based on his number-crunching, the Colts win means there's a 94 percent chance that OC home prices will increase in 07 (which means there's a pretty good chance that...
That would be the influx of restaurant and retail investors who have determined that the downtown makeover is not an illusion (even if the housing market is fading fast). The Downtown News breathlessly catalogs the interest from merchants ranging from Walgreens to Pinkberry. Typically, retailers are the last ones to sign onto a redeveloped community because they want to make sure that the revival is real. The rundown opens with a fellow named Emil Eyvazoff...
Yeah, I know - enough Judith Regan already. But VF contributor Michael Wolff weighs in for the March issue (he went to school with her), and aside from all the stuff we've read by now - the sex, the anti-Semitic rages, the shameless self-promotion - is an intriging slant on News Corp. that sort of rings true. Basically, it's that Rupert Murdoch has gone soft and so, too, has News Corp. From VF: Judith has...
Buried amid yet another piece of puffery on AEG head Tim Leiweke comes word that the massive L.A. Live complex is over budget. A Business Journal story appears to be referring to the 54-story hotel and condo tower that's the centerpiece of the $2.5 billion complex. Leiweke wouldn’t talk specifics (what a surprise), instead vaguely noting that "You're never in the ballpark when it comes to construction budgets." About a year ago, the pricetag on...
Now that Jeff Zucker has gotten Bob Wright's old job as CEO of NBC Universal (formal announcement expected later this week), there will be some other shuffling within senior management ranks. Marc Graboff is expected to oversee all of the network's West Coast operations (he already plays a big role in network and studio operations), while NBC entertainment president Kevin Reilly is close to renewing his contract - despite rumblings in recent months that his...
NYT pettiness: TV reporter Bill Carter confirms this morning that Jeff Zucker will replace Bob Wright as chairman and CEO of NBC Univeral. Whew! That's a relief, now that the NYT says it's so. The rest of the world picked up on the news Sunday morning when the LAT's Meg James broke the story. Amazingly, there's no mention of the LAT scoop in Carter's story (typically, major papers will acknowledge scoops from the competition, however...
LAT TV reporter Meg James gets the big scoop, citing four people at the company. Zucker moves up to CEO, succeeding Bob Wright, who had been top dog for 21 years and indicated that he wanted to stay on until the end of the year (wonder how much nudging was required of Jeff Immelt, chairman of NBC Universal parent General Electric, to make the move). There had been periodic rumors about Immelt having second thoughts...
The News Corp. chieftain is giving each of his six children $100 million worth of stock, and that, of course, has Murdoch watchers reading the tea leaves. Murdoch has made it clear that he would like to see one of the kids take over, but which one? Lachlan left the company in 2005 and moved to Australia, James is head of British Sky Broadcasting (News Corp. owns about 38 percent), Prudence and Elisabeth don't have...
The campaign to get travelers to avoid LAX gets a big boost with plans by ExpressJet Airlines to start service out of Ontario International Airport, beginning in April. Ontario will get 29 new daily nonstops to 14 cities, including Albuquerque, Boise, Colorado Springs, Fresno, Monterey and Oklahoma City. Houston-based ExpressJet will operate out of 24 cities, most of them mid-sized, and use 50-seat regional jets. ExpressJet Holdings previously served as a regional service for Continental...
In case you haven't heard, the northbound 405 is a parking lot over the Sepulveda Pass, thanks to a crane overturning right at the 101. Firefighters worked for about an hour to free the operator, who was airlifted to UCLA Medical Center. All northbound lanes have been closed as a precaution, and video from the scene shows a solid mass of cars backed up all the way to the Westside. As of 2:30, our LABO...
In the immortal words of Ricky Ricardo, "Wha Haapened?" Well, the weather got nasty back East, which increases demand in a hurry (the next 10 days are supposed to be the coldest of the season in the Northeast). But it's not just that. OPEC is cutting production and Venezuela, the fourth-biggest source of U.S. oil imports, is taking control of several joint oil projects. President Hugo Chavez, everybody's favorite socialist dictator, has told the American...
That's roughly what CBS is charging for a 30-second spot during the Super Bowl (though prices will vary quite a bit) and Rafi Mohammed, who runs Pricingforprofit.com, says it's well worth the money. Here's his reasoning: Roughly 90 million people will be watching all or part of the game, and of those, 60 million will watch the commercials. Reaching 60 million people with a banner ad on a major Web portal would cost $2.1 million...
Hearst Corp. has lost $330 million in the San Francisco Chronicle and tried to sell the newspaper in 2005 to Dean Singleton's MediaNews Group Inc., according to court documents. Singleton didn't offer enough, so that was that. The documents are part of a lawsuit challenging the business partnership between MediaNews and Hearst. (That relationship was recently extended in the purchase by Hearst of the Daily Breeze, which will be turned over to Singleton in exchange...
That's what fired Citigroup executive Todd Thomson had in his "Swiss chalet" of an office - photos of himself with the rich and powerful. It was a reminder to all his visitors that he was one of the top dogs at the financial services giant - and as such was entitled to behavior that most of us would consider inappropriate. Hell, I'd just call it outrageous. Forbes writer Elizabeth McDonald sets aside all the gossip...
Hmmm, this could get interesting. The parent company of MTV and Comedy Central is demanding that all its stuff be removed from the Google-owned video site. For months now, the two sides had tried to reach a financial agreement on Viacom being compensated for its 100,000 some-odd video clips that wind up on YouTube, but the talks broke down. Viacom and the other media companies obviously like the exposure, but they don't especially like the...
Jobless numbers: Somewhat tame employment report for January, with 111,000 jobs added to payrolls for the month (analysts had expected 150,000) and unemployment climbing to a still-reasonable 4.6 percent, a four-month high. The report also showed that workers saw slower wage growth in January. The stock market was up modestly in early trading. State and county numbers come out in a couple of weeks. AP Billboard settlement: Get ready for the upgrade. More than 800...
The L.A. City Council has signed off on $36 million in subsidies for a planned $146 million mixed use project at 900 N. Broadway (site of the old Little Joe's restaurant). The Blossom Plaza project, which has a planned opening in 2010, will include two residential towers with 169 condo units over 40,000 square feet of retail and commercial space. It's being developed near a Metro Gold Line station. There have been neighborhood concerns about...
Red flags should be posted at Calabasas Hills-based Cheesecake Factory - at least according to Jeremy Perler of the Center for Financial Research and Analysis. Perler isn't focused on questions about stock options or the recent departure of the company's president and COO. He's looking at the way Cheesecake measures its sales. As with almost all retailers, it's based on stores that have been open for more than 12-18 months - or same-store sales. New...
As a public service, courtesy of WSJ's Weath Report, LABO brings you globalrichlist.com, a site where you can plug in your annual income and see where you rank in the world. Hint: You're almost certain to look good. The site is a not-so-subtle reminder of how well off we are in a global context - and how those few bucks that Americans blow on a glass of wine or a new pair of jeans might...
Debating living wage: It sounded like a done deal yesterday, but the compromise on extending the city's living wage ordinance to LAX-area hotels remains, as LA Chamber hotshot David Fleming put it, "a work in progress." As part of the agreement, the City Council is supposed to prep new legislation more palatable to business groups, but there's been nothing even drafted so far. The lengthy LAT story suggests that labor makes out nicely, with the...
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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