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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 week in the quarter. Absent that, ad revenue was down 3 percent. And there was no new info this morning on the status of its "strategic review," other than it'll be wrapped up this quarter. Bloomberg
Office shakeup?: Tenants might want to check their leases, now that Equity Office Properties has been snapped up by the Blackstone Group for $39 billion. Looking to recoup from its hefty investment, the private equity firm is expected to put a bunch of Equity properties on the block. There's a lot in Socal - most prominently Two California Plaza in downtown L.A. and AIG SunAmerica Center in Century City. From the NYT:
The deal for Equity Office encapsulates two of the hottest trends in deal-making: the wave of capital flooding into commercial real estate and the growing power of private money. While residential real estate has slowed, commercial real estate, office buildings in particular, looks more attractive as the market finally shakes off the effects of the burst technology bubble in 2000. Many investors expect office vacancy rates to continue to decline in the next couple of years, with a corresponding rise in rents. And private equity firms like Blackstone have been among some of the most aggressive investors in commercial real estate. These firms have accumulated huge war chests: even now Blackstone is raising a new $10 billion real estate fund. The surge in buyouts — which accounted for a fifth of the record $3.8 trillion in deals last year — shows no sign of slowing.
Northrop bids on tankers: That's what Dow Jones Newswires is reporting, citing Washington sources. This is the multi-billion dollar contract for a new aerial refueling plane. Boeing has had the inside track on the deal - so much so that L.A.-based Northrop had threatened to pull out of the competition. Northrop would be teaming with the European Aeronautic Defence & Space Co.
Disney hits the road: Rather than focus squarely on theme parks, the Mouse House is planning smaller-scale destinations, such as Disney theme hotels, Disney-branded dining districts (Mouse-burgers anyone?), and niche resorts and parks. Also in the works: expanding the cruise line operations and getting into time-shares. From the WSJ (story is free):
"Instead of saying where will the next Disneyland be, we need to think more in terms of where around the world we can deliver an immersive experience appropriate to the size of the market," says Jay Rasulo, chairman of Disney's theme park and resorts business. "Not every market can support a full-on Disney location." The expansion comes after a long stretch of rebuilding in the wake of 9/11. Only recently has Disney's theme park business returned to the 20% margins seen before 2001. After the success of last year's global campaign pegged to the 50th anniversary of Disneyland, a big question has been what the theme parks will do next. Mr. Rasulo says his strategy is aimed at tapping into a burst of growth in the travel market, particularly in the Asia-Pacific region.
More ads in multiplexes: It's one of the few growth areas in the advertising business - so much so that one of the major theater ad firms, National CineMedia, is set to launch an initial public offering as early as today, looking to raise $800 million. One factor behind the growth: thousands of digital projectors that have been installed in movie theaters. The projectors allow ads to be transmitted over the Internet and into movie houses all over the world. Distribution costs are cut to nearly zero. WSJ
Streaming video money: Disney's private investment arm, Steamboat Ventures, is co-leader in a round of venture funding for Move Networks Inc., which has software that allows longer-form video to be distributed more cheaply. Already, Utah-based Move is providing video services to Fox Interactive, the CW Network, E! Online and Televisa. So far, the venture money is nickel-and-dime - $11.3 million - but longer-term, the idea would be to make this software available to consumers, which could be a big deal. TheDeal.com
"Stupid drivel": That's how GE Chairman Jeff Immelt characterized a Wednesday NY Post story suggeting that he is considering a sale or spin-off of NBC Universal. Immelt made the comment to NBCU employees in Rockefeller Center's Studio 8H who gathered to welcome Jeff Zucker as their new CEO. "I don't know how to be clearer," he told the gathering. "We're here to stay and here to play." Fortune
Filmmaking snags: Here's a Washington story for you: Tax breaks designed to keep movie-making in the United States have not kicked in - two years after going into effect. The delay is being blamed on a combination of Treasury Department bureaucracy and administration indifference. Hollywood hot-shots, in Washington this week on a lobbying effort, say the holdup could be costing the U.S. millions of dollars in lost film production. (Of course, overseas filming has hit a snag itself, largely because a lower-valued dollar makes the economics less enticing.) Daily News
Tower keeping the beat: Sort of. A former Tower Records store in Torrance has reopened as the music store F.Y.E. The chain is part of Trans World Entertainment Corp., which was one of the losing bidders for all of Tower Records (Tower wound up going to liquidators). Trans World has more than a dozen F.Y.E. stores in Socal - and in case you're wondering, F.Y.E. stands for For Your Entertainment. Daily Breeze
Mark Lacter created the LA Biz Observed blog in 2006. He posted
until the day before his death on Nov. 13, 2013.