Follow LA Observed on Twitter here
David Hiller's extraordinary memo to staff on changes at the Times, first reported by Kevin Roderick at LAO this morning, signals that they're finally ready to chuck the old business model and start from scratch. He didn't put it quite that way, of course, saying only that "the old model is broken." But make no mistake, it's dead and buried, even if newsroom stalwarts insist that it's just a matter of bad management or greedy...
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.
May 2007
The family that controls 64 percent of Dow Jones' voting power said it would meet with Rupert Murdoch about his $5 billion offer and consider other bidders and options for the company. That's essentially saying that the WSJ parent is in play and that, as the Journal itself said this afternoon, DJ's "125-year history as an independent media company could be nearing an end." In a statement issued this afternoon, the Bancrofts wanted "to determine...
Hey, if Kobe leaves, this may be our next best bet. The happy couple haven't even arrived in town, but already David and Victoria (especially Victoria) seem ready to set up shop. They're teaming up with Scottish super-chef Gordon Ramsay on a new L.A.-area restaurant (Ramsay is already working on a place at West Hollywood's The London hotel that's set to open early next year). The former Spice Girl apparently insists that the place have...
Economy barely moving: First-quarter economic growth was a measly 0.6 percent, way down from the government's original estimate of 1.3 percent. That's the worst three-month showing in over four years, going back to when the economy was recovering from a recession. Still no hint that there's a new recession around the corner - and indeed many economists expect growth to pick up throughout the year. Stocks are up a touch in early trading. AP Disney...
Welcome to the United Football League, the brainchild of stock underwriting maverick Bill Hambrecht and Google senior executive Tim Armstrong. They've plunked down $2 million each to get things going, and they have billionaire Mark Cuban down as the first franchise owner. Now all they must do is find seven other deep pockets, including one in L.A. (Eli? Ron? Kobe?). As explained by the NYT's Joe Nocera, each owner will put up $30 million, giving...
That's the Irvine-based distributor of flat-screen TVs, and founder William Wang has quite a story to tell. Of course, there's the company, which he started in 2003 with $600,000 and is expected to generate revenues this year of more than $2 billion (much of it coming from sales at Costco). But then there's the other thing - how he was one of of 96 survivors aboard a Singapore Airlines 747 that took off on the...
The widely followed stock index - generally a better measurement of Wall Street performance than the Dow - reached an all-time record today in an otherwise ho-hum session. The S&P closed at 1,530.23, up 12.12 points. It's up almost 8 percent for the year. The previous record came on March 24, 2000, in the midst of the dot-com boom. NYT...
Never mind his strident views on illegal immigrants that he masquarade as real news. We all know about that. What you might not know - and what was deftly uncovered by NYT columnist David Leonhardt - was Dobbs' claim that 7,000 cases of leprosy had been reported in the U.S. over the previous three years (with the clear implication that immigrants are to blame). When Lesley Stahl called him on it during a "60 Minutes"...
Ever wonder how those OC subprimers could amass so many mortgages from so many unsuspecting borrowers? The answer that's laid out in the new issue of Bloomberg Markets magazine is an army of independent mortgage brokers who handle as much as 70 percent of subprime originations. That's right, outfits like New Century and Fremont General outsourced the bulk of their sales - and let's just say that no one seemed interested in following the house...
More summertime fun: Remember when the airlines gave you all kinds of extra goodies if they bumped you from a flight - including, perhaps, a first-class ticket for the very next departure? Well, this summer you should consider yourself lucky if they give you a seat - any seat - within the day of your original flight. Actually, it could take several days before they get you on - the result of packed planes and...
So much for economic Armageddon. The federal government's weekly survey shows that the average gallon of self-serve regular in L.A. for the week ended May 28 was $3.38, compared with $3.42 a week earlier. SF is eight 12 cents higher. That's still a lot of money to pay for gas, but it's hardly the calamity that's been played up over the last week or two. And please, can't we have a moratorium on those TV...
Jim Cramer asks an obvious question in this week's New York magazine. The question: Why does everybody hate me? There are, of course, the obvious reaons, like the “Booyah" chants and the bell-wringing and the diaper-wearing. But let's put all that off to one side, and get to the more serious matter of hosting a TV money show in which investing is treated as a game - a silly game at that. No one with...
Good luck. Since the government does not track any aspect of the foreclosure process, several private firms are left to post their own numbers, based on their own methodologies. And, not surprisingly, they're all over the map. Irvine-based RealtyTrac’s numbers are higher than anybody else’s, but other real estate analysts are discrediting them. You see, RealtyTrac counts every step in the foreclosure process separately, which means that the same property could be listed as three,...
Well, you need to be a first-year associate at one of the big law firms in town. In just the last week or so, Sheppard Mullin; Munger, Tolles; Manatt, Phelps; Sidley Austin; and Pillsbury Winthrop Pittman announced plans to boost salaries to $160,000 (Manatt isn’t instituting the new rate until next January). A few weeks earlier, Orrick, Herrington & Sutcliffe and O'Melveny & Myers did the deed. The new first-year standard got going in NY...
NBC shakeup: No announcement yet on Kevin Reilly’s firing, but it’s getting close. As reported by Nikki Finke over the weekend (she first broke the story on Friday), producer Ben Silverman will take over as the network’s entertainment chief – perhaps along with control of NBC’s TV production studio. Finke says they’ll be some sort of division between Silverman and Marc Graboff, who handles the business stuff. Some are reporting that the NBC honchos have...
The Business Journal is out with its annual list of L.A.'s richest. It's all the usual suspects, although the interesting news is how Kirk Kerkorian has taken such a huge lead as the richest of the rich, at $16.1 billion (his shares in MGM Mirage are worth close to $12 billion alone). After that comes Sumner Redstone, at a measly $8.4 billion (look at Viacom and CBS stock), and then Eli Broad, at $6.5 billion....
It's not a big surprise after this week's blowup with Elizabeth Hasselbeck. "We had hoped Rosie would be with us through the end of her contract three weeks from now, but Rosie has informed us that she would like to take an early leave. Therefore, we part ways, thank her for her tremendous contribution to 'The View' and wish her well," said ABC Daytime president Brian Frons. The network would not renew her contract (asking...
The word from Nikki Finke is that the network's enteretainment head, Kevin Reilly, is out. The desired replacement appears to be producer Ben Silverman ("The Office," "Ugly Betty" and a bunch of reality shows). The timing is strange because Reilly just signed a new contract in March after months of rumors about his getting the boot. That will be an expensive contract to break, although NBC has had a rotten year, finishing the season in...
When is a kickback an illegal kickback? That is the question behind a lawsuit filed by federal regulators against L.A.-based Property I.D., which prepares natural hazard disclosure reports. Also named are Coldwell Banker Residential Brokerage Corp. and two other brokers doing business as Prudential California Realty. This is pretty complicated for the Friday afternoon before a holiday weekend, but basically here's the deal: Investigators from the Department of Housing and Urban Development say that Property...
RVCA, the edgy, artists-driven, very un-OC apparel company that happens to be based in Costa Mesa, is opening its very first retail store next month at the corner of Haight and Ashbury streets in SF, taking over a spot that was long held by the Gap. Haight-Ashbury denizens are apparently happy to see the Gap go (it never really worked in that part of town), while RVCA (pronounced "RUCA") would seem to be a better...
Remember Julie Roehm? She's the Wal-Mart marketing executive who was fired for, among other things, supposedly having an affair with a subordinate named Sean Womack. She went on to sue Wal-Mart, denying that there was an affair and claiming that the company owed her money. And Wal-Mart went on to sue Roehm, claiming that it had a bunch of emails proving there had been a romance. As legal filings go, it was pretty steamy stuff...
Holiday gas prices: Everyone is in an uproar over what it takes to fill their tanks these days, so guess what happens on this pre-holiday weekend? The Auto Club reports that L.A. prices have fallen for the second straight week. The average price of self-serve regular is $3.423, which is high but only 4 cents above last year. What's given the gasoline story more legs this month are the higher prices in other parts of...
Was it because the two finalists didn't capture the attention of viewers or could this be the beginning or audience fatigue? Preliminary Nielsen numbers show that last night's show had an 11.5 rating and 31 share among adults 18-49. Overall, we're talking 30.4 million viewers, down from 36.4 million a year ago. There are, of course, all kinds of ways that Fox will slice and dice these numbers, but "American Idol" ratings have been down...
Editor Jim O'Shea said that the vast majority involves voluntary departures and that "we will replace a significant number of people, though, to offset the decline." The 57 number was a little under the 70 that had been bandied about. That leaves the newsroom with around 850 staffers, give or take. Some highly talented people are leaving the staff and I hate to see them go. No one enjoys going through something like this, least...
He's posted two additional emails to LAT staff this afteroon, and as with last night's missive about being kicked off the paper under the guise of the buyout offer, he's not holding back. The first email notes that "you're a great staff and I suspect that you will endure without me, though a vacancy in the paper may be noticeable for a bit." Then, about an hour later there's this: "I forgot to add that...
The former Disney CEO no doubt envisioned a much simpler life as an investor, producer and occasional talk show host. But it's not turning out that way, especially the investor part. His private investment firm, Tornante Co. (hairpin turn in Italian), had bid $9.75 a share a couple of months back for baseball card and bubblegum maker Topps Co., but Upper Deck Co. has come along with a $10.75 offer. Upper Deck had made its...
He's Matthew J. Hart, currently president and COO, and he'll replace longtime CEO Stephen Bollenbach early next year. Bollenbach's departure was announced earlier this year. Hart, who joined Bev Hills-based Hilton in 1996 as chief financial officer, will be only the fourth CEO in the company's 90-year history, following Conrad N. Hilton, Barron Hilton and Bollenbach. The long-term growth outlook is quite strong (there's been takeover speculation from time to time), even though first-quarter earnings...
Gasoline finger-pointing: Where to begin? NY Sen. Charles Schumer says it's probably time to break up the oil companies, which he describes as current-day robber barons. Many industry watchers say that tearing up the industry is a great idea -so long as you want everybody to be driving a bike to work. Size really does matter in the energy biz because exploring new fields in hopes of pumping up production requires big bucks. Little guys...
And the long-time LAT columnist is not too happy about it. He sent off an email this afternoon in which he describes himself as "a victim of the buyout/layoff frenzy." It sounds like he didn't exactly volunteer to leave the paper, but was tapped on the shoulder - as has happened with a number of staffers. From: Martinez, Al Sent: Wednesday, May 23, 2007 5:19 PM Subject: buyout To all: I dislike rumors and so...
The buyer is Cabi West, the local subsidiary of major Mexican real estate developer GISCA, and it covers a 33-property portfolio in L.A., Orange, San Diego and Ventura counties. The sale, reported this afternoon by the Business Journal, is another sign that Arden, which was acquired last year by GE Real Estate, wants to adjust its portfolio. As a public company headed by Richard Ziman, Arden stuck to smaller office buildings on the Westside, OC...
It'll cost you - $1.3 million for a 30-second spot for tonight's finale, according to Ad Age, the same as last year. That's nowhere near the rate for a true programming event - say the Oscars, at $1.7 million, or the Super Bowl, at $2.3 million - but it's way higher than what the networks would normally charge for a popular prime time series. Advertisers plunk down the bucks because they know ratings will be...
So why did it take Amgen almost two weeks to disclose that it had received a subpoena from the NY attorney general's office demanding documents on "promotional activities, sales and marketing activities, medical education, clinical studies, pricing and contracting, license and distribution agreements and corporate communications"? Michelle Leder at footnoted.org is curious about that - as well as the insider selling that's been going on at the Thousand Oaks-based drug company. Sen. Charles Grassley, who...
U.S. airlines will be able to operate 23 daily roundtrip flights between the United States and China by 2012, up from the current 10. The agreement, announced during those high-level talks between the United States and China, also will allow the U.S. to designate three more carriers to fly to China. Some of those new flights might originate out of LAX, although U.S. carriers have shown a preference for opening up routes elsewhere in the...
Could there be any possible explanation for why road crews had to do landscape work this morning on the median strip of Santa Monica Boulevard - work that effectively shut down one westbound lane between Century City and the 405 and backed up traffic? Or why another lane was shut down near Overland because a new sign was being installed, also backing up traffic. Isn't this the sort of routine maintenance work that's supposed to...
Market mystery: Here's why people go nuts trying to figure out what to do with their stocks. This morning's WSJ leads its front page with a story headlined, "Why Market Optimists Say This Bull Has Legs." It cites a small group of investors and academics who believe that thanks to the global economy's continued strength, the U.S. is in for another extended stretch of market gains. One of them expects the Dow to reach 16,000...
Believe it or not, that's what media planners and advertisers are saying, based on the good buzz of several new shows. Among them: "Gossip Girl," the story of privileged NYC teens as seen through the eyes of a blogger (there will be interactive "Gossip Girl" digital billboards in NY and L.A.). Of course, fifth-place CW does not operate like the major networks, which is to say that it must come up with unorthodox advertising and...
If you hold gaming stocks, this is the day to come to pappa. Kirk Kerkorian's interest in the MGM-owned Bellagio Hotel and the nearby CityCenter, a massive retail and entertainment project, got casino issues on a tear. MGM Mirage was the biggest mover, up 27 percent, or $17.03, but Wynn Resorts climbed 7.4 percent and Las Vegas Sands gained 5.6 percent. (With his 56 percent share of MGM, Kerkorian himself has just made more than...
With global climate change becoming such a big deal - just the future of the world is all - is anyone surprised that the major law firms are turning it into a separate practice group? L.A.-based Sheppard, Mullin, Richter & Hampton is one of the latest entrants, with Randolph Visser, co-leader of the new group, figuring that 80 to 90 percent of existing clients are impacted in one way or another. Much of it involves...
Talk about your wacky marketing ideas. BusinessWeek has just struck a deal to have some of its magazine columns appear on airplane tray tables. Yes, the idea of a passenger reading his or her table does seem a little weird, but Brand Connections, the marketing company that's arranging the placement, tested the concept on America West and finds that the BW offerings went over pretty well. The first columnists featured are Maria Bartiromo, Robert Parker,...
Summer vacation logjam: We knew it was going to be bad, but L.A. airport officials are warning of the busiest summer since 2001. Almost 20 million passengers are expected at LAX from Memorial Day through Labor Day, up 2.8 percent from a year ago. Actually, it’ll be a lot worse than 2001 because there are many fewer flights (and airline workers) and many more security holdups. All it would take is a band of thunderstorms...
The rest of the country is catching up to what Californians have been facing for some time: crazy high pump prices. The latest weekly survey by the Energy Department shows a slight dip in the L.A. area, to an average of $3.42 a gallon for self-serve regular, down from $3.44 the week before. For some reason, Chicago is at $3.53, which is pricier than any major city. NY is a bargain, at $3.10, and Miami...
We're talking homes in the $1 million-plus range, which these days is not that big a deal. L.A. area home values in this bracket rose 6.5 percent in the first quarter from a year earlier and were up 3.6 percent from the previous three months, according to First Republic Bank, which keeps track of these numbers. The L.A. prices have been influenced by the entertainment industry and the area's solid economy. As we've been noting...
The S&P 500 couldn't quite make its all-time closing high today, but it was close enough for MarketBeat's David Gaffen to consider how well investors would have done if they stood pat since the March 24, 2000 closing high of 1527.46. The answer depends on the sector. Tech was and remains a disaster, down 61 percent from that day seven years ago. Telecom is only a bit less awful, down 44 percent. But the energy...
It's time once again to be reminded that the very rich - we're talking net worth of more than $10 million - are indeed different than... well, let's just say me and Roderick. Rich people surveyed for Elite Traveler magazine plan to spend an average of $622,202 on luxury goods and services this summer, a 56 percent jump from 2005, which is the last time the survey was conducted. Yacht rentals are tops in spending...
This week's Downtown News has an extraordinary update on the status of more than 170 downtown projects, from Chinatown to USC. It's extraordinary because there are so darn many of them - condos, lofts and hotels, of course, but also restaurants, bars, schools, a homeless center, and all kinds of mixed-use projects. Read the list carefully and you'll notice as fair number of proposed projects on hold, but even discounting those you're still left with...
Immigration bill fading fast: At least in its current form. The same employers who worked on the compromise legislation that will be debated in the Senate this week don't like the final result, especially the part about establishing a point system to determine who gets to the front of the line. It’s obviously skewed in favor of higher skilled and educated workers, who aren't the ones filling low-income jobs. Another impossible-to-enforce provision would require employers...
Even watchdog organizations can find themselves in the middle of some nasty goings-on. Jonathan Weil and Lynn Tuner, two respected straight shooters when it comes to corporate governance, have resigned from the proxy advisory firm Glass Lewis after hearing about less-than-aboveboard behavior by parent firm Xinhua Finance - namely, that the Chinese company's CFO, Shelly Singhal, was also running a Newport Beach brokerage firm, Bedrock Securities. Xinhua Finance happens to be China's leading source for...
Remember when he blew the whistle on a stolen Norman Rockwell painting from his own collection? Well, it's turning into a real mess because two art dealers claim they owned the painting before Spielberg bought it - and they want it back. The 1967 painting, "Russian Schoolroom," shows a Soviet classroom with children wearing red neck scarves and staring at a white bust of Lenin. Its value is between $700,000 and $1 million. From the...
It's the first step in what promises to be contentious negotiations with movie and TV producers this fall. Topping the list is a new structure for compensating writers for content distributed on the Internet and other types of new media. The Writers Guild also wants DVD and videocassette payments to be upped - something that the union made little headway on during contract talks three years ago. "It is reasonable to expect that we will...
April's jobless rate was unchanged from the previous month and above the 4.8 percent rate in April 2006. California's rate jumped to 5.1 percent, while the U.S. was at 4.5 percent. The good other news is that L.A. County added 21,000 just 3,300 jobs in April, led by the leisure and hospitality segment (normal for this time of year as businesses gear up for the summer season). The category of "motion picture and sound recording"...
Please, no jokes. So what if Ron Burkle likes to hang with models and starlettes, and Maxim specializes in, well, lots and lots of photos of models and starlettes (the May issue includes "six rules for making the ultimate sex tape"). That can't possibly be the basis for the L.A. billionaire's interest in Dennis Publishing, which owns Maxim, along with Blender and Stuff (don't ask). Maxim is the biggest prize, with circulation of 2.5 million...
To anyone with even the remotest awareness of L.A.'s fashion business, this might seem like veeeeery old news, but the WSJ front page has a story about how the major labels and retailers are getting their cues from the smaller, edgier designers, many of whom happen to be based here. Getting particular mention are the brothers Chip & Pepper, whose Vernon.-based jeans company had sales of $40 million in 2006. From almost the start, C&P...
Immigration deal: Lots of coverage about the Senate/White House compromise that would allow illegal immigrants to stay in the U.S. provided they report to authorities and pay a $5,000 fine. This could be a good thing for employers of low-skilled workers - many of them in our fair city - because it supposedly would assure them a steady supply of legal labor. But that assumes, among other things, that workers are able to shell out...
It's trading at almost $65 a barrel, up more than $2 on the day, because traders are betting that gasoline supplies won't be able to meet summertime demand. And they might have a point: inventories are well under their five-year-average, and refinery operating rates are under 90 percent (they should be closer to 95 percent). As always, the problem is that the refineries are old and tend to break down a lot. That's why supplies...
Does Google violate copyright protection when it displays small versions of images in its search results? Perfect 10 Inc., the Bev Hills-based publisher of naked women, claims that it does - and it took Google to court three years ago in a case that had some major ramifications for all content winding up on search engines. Well, the 9th U.S. Circuit Court of Appeals said that Google does not infringe on the copyrights of Perfect...
That's what dealmakers said in a survey by Mergermarket, an M&A research service. More than half of the respondents expect another increase this year in M&A activity among large-cap companies. Most of the rest believe the level of deals will remain about the same as last year’s. Mergermarket says that first-quarter merger and acquisition activity was up 19 percent from a year earlier - not too surprising if you read the financial pages. Buying and...
I'm losing track here. First there was Maria "Money Honey" Bartiromo spending way too much time with a senior Citicorp executive - as well as appearing as a guest speaker at all kinds of bidness wing-dings for all kinds of moolah. Now it's CNBC's Larry Kudlow, who apparently had been on the prowl for some loose change as well. In the new issue of Radar magazine, there's a little item about how guests on his...
Amazon raises the stakes: Lots of coverage this morning on the huge online retailer planning to sell songs for use on any music player, including Apple's iPod. At this point, the offerings will be limited, with just content from EMI (it has the smallest share of the U.S. market) and 12,000 independents. Left out are Universal, Warner Music and Sony, which continue to restrict how their music can be sold online because of piracy concerns....
With everybody hot and bothered about the record price of gasoline, it's time once again to put a little perspecitve into the equation. Rob Cockerman at Cockeyed.com ranks 47 products from the least-expensive (tap water, $0 per gallon) to the most-expensive (scorpion venom, $38,858,507.46) - and a bunch of stuff in between. Gasoline, as always, remains a relative bargain, so let's stop the bellyaching, OK? ITEM PRICE PER GALLON tap water $0.00 Folgers Coffee $0.70...
C'mon, why not? If Reuters is being sold for $17 billion and Dow Jones is dangling for $5 billion, why wouldn't Time Warner consider jettisoning its not-so-hot magazine division? Bear Stearns analyst Spencer Wang issued a report today saying that the TW honchos are at least thinking about it. He calls the Time unit "the least-attractive strategic fit" with the rest of Time Warner's "video-centric" media offerings. From the NYT's Andrew Sorkin: Mr. Wang sees...
Does David Geffen really need another $6 million? That's the chump change he's pocketing from the sale of a 12-room duplex penthouse at 810 Fifth Avenue (Nelson Rockefeller's old pad). Blackstone Group co-founder Pete Peterson is buying the co-op for $37.5 million and here's the fun part: Geffen never moved in. That, according to the NY Post's Page Six, is probably a big relief to the co-op board, which tends to turn down bachelors (they're...
Soaring food prices: Yesterday's U.S. inflation numbers may have looked tame to Wall Street, but drill down to what's going on at your local supermarket and the picture is far different. Socal food prices, already the highest in the nation, increased 5.7 percent in April from a year earlier (nationally, food prices were up 3.9 percent). Some samples, according to the LAT: Yoplait yogurt is up 13 percent, Kraft mac and cheese up 25 percent,...
Money magazine engages that topic in all kinds of ways and discovers that people, for the most part, say they would do the right thing. That is, they wouldn't sleep with their boss to get ahead, or keep $2,000 that was deposited into their bank account by error, or avoid paying back the $5,000 that their brother-in-law loaned them, or steal supplies from work. The magazine posed these kinds of questions to a sample of...
The stock market was acting a little strange today, with the Dow jumping more than 100 points this morning and then pulling back, back, back, to close with a mere 37 point gain. The S&P 500 actually fell a couple of points. Which, of course, raises that inevitable question: Where is thing going? As noted by Market Beat, the conventional wisdom says that the market is headed for a correction, which means the contrarians believe...
Yesterday was supposed to be the deadline for taking the buyout, but the paper still has a week to decide who will be accepted. In the Business section, the list of potential candidates includes auto writer John O'Dell, former business editor Bill Sing, and reporters Evelyn Iritani and Nancy Cleeland. L.A. Observed has the full rundown throughout the newsroom. As has been reported, they want to cut 70 positions, but the final tally might depend...
The days when white-collar prison sentences were a walk in the park - sometimes literally - are long gone, according to the new issue of The American magazine, which is published by the American Enterprise Institute. These days, the minimum security facilities are becoming tougher, even more dangerous. The bank robber is treated much the same way as the corporate criminal and the drug dealer, which means no more weekend furloughs or wearing your own...
Actually, April sales were way down, reaching a 12-year low throughout Southern California, according to DataQuick, which released the numbers this morning. L.A. County saw a 22.2 percent drop from a year earlier (remember, the year-ago comparisons weren't all that strong), but San Bernardino fell 46.7 percent and Riverside was down 45.1 percent. The declines were concentrated in lower-cost markets - perhaps reflecting the subprime troubles. Another factor: the lower end market was last in...
Another big market day?: Heck, why not? April inflation numbers turned out to be tamer than expected, which means that the Fed is less likely to raise interest rates - and Wall Street just loves it when interest rates don't rise. After 90 minutes of trading, the Dow was up around 90 points. Amgen takes another hit: Will it ever end? Shares of the Thousand Oaks-based company are down almost 6 percent this morning on...
The decision by Daimler-Benz to buy Chrysler is sure to rank up there as among the most disastrous business deals in recent memory. I mean, how else do you describe one company buying another company for $36 billion and then, nine years later, selling it at a cost of $650 million? Robert Bruner, dean of the University of Virginia's Darden School of Business, offers up some other acquisitions gone bad in a book, titled “Deals...
It's not enough to notice - in L.A., the average gallon of self-serve regular was $3.438 for the week ended today. That's down two pennies from the previous week, according to the federal government's latest survey. Wholesale prices fell a bit late last week, which probably accounts for the small drop. Nationally, pump prices hit an all-time high, at $3.103, as President Bush ordered U.S. agencies to look into cutting gasoline consumption and emissions....
The Chrysler giveaway: And we thought Bev Hills billionaire Kirk Kerkorian was low-balling in his $4.5 billion offer for the automaker - an offer that wasn't even considered by Daimler-Chrysler. The so-called $7.4 billion sale to private equity firm Cerberus Capital Management, just announced this morning, is looking like a close-out sale. The WSJ's Dennis Berman, writing in Deal Journal, figures that the sale is actually going to cost Daimler about $650 million, which is...
He's Nick Jones, founder of the members-only Soho House, and the big news is that he's taking over the quasi-legendary Mortons in West Hollywood (hey, the place only opened in 1979). Jones has signed a 20-year lease on the property, starting next year, and will spend $5 million to turn it into one of those private clubs he's been opening all over the world. Jones wants to continue the post-Oscar parties that have been a...
The burger chain has been a basket case for years, what with poor marketing, bad service and sluggish sales. That's why the company's institutional investors, along with billionaire Nelson Peltz, have been urging the board to sell. Highfields Capital Management LP, of Boston, which holds an 8.5 percent stake, told Chairman James Pickett that the naming of Kerrii Anderson as CEO was "a mistake," and that the efforts to improve marketing and operations "have been...
After yesterday's 9 percent beating, the Thousand Oaks-based drug firm is down nearly 3 percent, to $55.64. Never mind that it's now hovering at its 52-week low - what investors should really worry about is that Wall Street wants out. At least five different research groups, including Citigroup and Morgan Stanley, lowered their ratings this morning after an FDA advisory panel said that the company's anti-anemia drugs should have additional restrictions on product labels....
It hasn't been formally announced - a few out-of-touch wire services still say the series is merely "in trouble" - but the NYT's Bill Carter tucks it into this morning's story about the network's new shows next year, and FoxNews is following it up. Not a big surprise - the Aaron Sorkin hour about the backstage life and times of a "Saturday Night Live"-type comedy show got great notices and quickly developed an almost fanatical...
Catalina fire: This is likely to be a pretty significant economic event because of the area's strong tourism base. Three weeks before Memorial Day Weekend and the start of the summer vacation season, the timing is especially bad - and hundreds of firefighters rushing to the island can't make up for the many thousands of tourists who will stay away this weekend and perhaps for a lot longer. From the Daily Breeze: Employees at Vons,...
Ari Emanuel, founder of the Endeavor Agency and agent for Larry David, Michael Moore, Sacha Baron Cohen, etc., etc. (and brother of Dem big-shot Rahm Emanuel) is ticked off about how the press has treated his friend and now-former head of HBO, Chris Albrecht. He's especially bothered by what turned out to be the smoking gun: HBO's 1991 settlement involving a subordinate and love interest of Albrecht's who alleged that he had shoved and choked...
Another one - this time from a panel of advisers to the FDA, which voted 15-2 in favor of prescribing new restrictions for those anemia drugs made by the Thousand Oaks-based drug company, as well as by Johnson & Johnson. The FDA usually follows the recommendations of its advisory panels, so this could be a very big deal. The basic question is to what degree the drugs raise the risk of heart attacks, strokes and...
At Time magazine's big NY shindig the other night celebrating the world's 100 "most influential" people, film mogul Harvey Weinstein was explaining to his much younger girlfriend, British "designer" Georgina Chapman, that Nobel Peace Prize winner Elie Wiesel "was in a concentration camp." Well, according to Rush & Molloy anyway....
The managing director of the Peninsula in Bev Hills makes it his business to learn a lot about his guests. It could be identifying a favorite soft drink or making sure the front desk can pick out the wife from the mistress (hopefully not in the same visit). When you're a frequent guest paying maybe a grand a night (sometimes more)... well, you don't want to be schleping to the ice machine in your bath...
That's the general consensus of private economists surveyed by the WSJ. First quarter's very sluggish 1.3 percent growth - weakest in four years - should be the worst of what's been a low-grade slowdown over the past year. But the improvement will be modest, with GDP growth running 2.2 percent in the second quarter and 2.6 percent in the second half of the year. Housing might improve a little, consumer spending might go down a...
Weak April retail sales: Some economists had been afraid of this - perhaps a harbinger to a consumer spending slowdown (though we’ve heard that one before). There are a bunch of reasonable explanations for the poor results, including a colder-than-normal April and an earlier-than-usual Easter that pushed sales into the March reporting period. But for some chains the numbers missed already weak expectations. Wal-Mart sales fell 3.5 percent, the worst monthly drop in 27 years....
CEO Dennis FitzSimons, who has become Sam Zell's go-to guy in making the case for the company going private, took an hour's worth of questions at this afternoon's shareholder's meeting in Chicago. FitzSimons deflected most everything and basically said it's all good. As reported by Crain's Chicago Business, a project manager for the Teamsters, which represents 2,000 Tribune workers, asked whether the risks inherent in the Zell purchase were being shared equally by the Chicago/Malibu...
Nikki Finke reports this afternoon that the cable channel's CEO is being told to quit or be fired. It seems that today's LAT report about past bad behavior with women at HBO was the final straw. Finke hears that Time Warner Chief Operating Officer Jeff Bewkes wants to resolve the Albrecht mess before the annual shareholders meeting late next week. Albrecht took a leave of absence yesterday after being arrested over the weekend for allegedly...
"This is the final stretch, brothers and sisters," is the message from Greg Conger, president of the United Food and Commercial Workers' OC local, a day after union officials walked out of contract talks with the three major grocery chains. Well, contract talks might be stretching things - both sides have dug in on the all-important health care issue. The union wants to get back some of the benefits lost in their last, disastrous contract...
That's what former WSJ reporter Dean Starkman wants to know after hearing that Managing Editor Paul Steiger sat on the news about Rupert Murdoch going after Dow Jones. Steiger's explanation has been that an e-mail he received from Murdoch laying out the offer was marked "personal and confidential," but Starkman isn't biting - and he makes a pretty good case. Someone sending an e-mail that says, "I have made some big news, but this is...
Not that Nancy Silverton needs yet more positive press, but NYT restaurant critic Frank Bruni spends some time at her now-landmark Pizzeria Mozza and delivers a mostly glowing review. Along the way, we discover that Mozza's higher-end sibbling, Osteria Mozza, won't open until July after months of construction delays. It's got a tough act to follow in the fickle foodie world, though restaurant critics have a hard time bad-mouthing most anything about Silverton. Must be...
Grocery talks collapse: Lots of the usual hot air from both sides, so it's hard to know where the long-winded talks really stand. Union leaders claim that the three major chains - Vons, Ralphs and Albertsons - are offering less for health insurance than the current contract. You might recall that the current contract cut deeply into what had been nearly cost-free medical coverage. The United Food and Commercial Workers had been hoping for a...
This post is actually about this afternoon's earnings results from the Mouse House. But before we get to that, here's what the WSJ's Joe Morgenstern had to say about the movie "Wild Hogs," starring John Travolta, Tim Allen, Martin Lawrence and William H. Macy. (trust me, there's a connection): Wild horses couldn't drag me to see "Wild Hogs" a second time, but seeing it once can be a liberating experience. Not in the same sense...
Inaction is more like it. This morning's NYT story about how several top Journal editors were aware of Rupert Murdoch's bid for Dow Jones - and didn't report it - is raising the predictable hackles at journalism's ivory towers. Todd Gitlin, professor of journalism and sociology at Columbia University, talks about a collision course between corporate interests and newsgathering. But Rick Edmonds, an analyst at the Poynter Institute, correctly points out that ME Paul Steiger...
Los Angeles magazine has posted my May piece on the ousted chairman and CEO of KB Home. Karatz, of course, was just about the most prominent chief executive of any L.A. public company. Certainly, he was among the most visible - there were the black-tie fund-raisers, the CNBC interviews, the pro bono favors for mayors and governors. And then, suddenly, it was over. The company's own investigation had implicated him in the backdating of stock...
Goodness knows how they made a connection, but when HBO head Chris Albrecht was arrested early Sunday morning for roughing up his girlfriend outside the MGM Grand, attorney David Chesnoff came to Albrecht's defense. Never heard of him? Well, Chesnoff has had all kinds of famous clients, among them Louis Eppolito, the NY cop who was charged with serving as a mob hitmen; Vinny Faraci, longtime manager of the Crazy Horse topless club in connection...
Market opens lower: This could be the day when stocks take a breather after five straight up sessions. The Dow is off 65 points after almost two hours of trading. WSJ had Murdoch scoop: Journal Managing Editor Paul Steiger was told by Murdoch himself of the $5 billion bid – well before the news was reported. The information came in an email, but was marked "confidential" so Steiger felt obliged to keep quiet. That's understandable,...
Shares of Santa Monica-based Activision took a 5 percent tumble today, despite the company holding video-game rights to "Spider-Man 3." How exactly can that happen? Easy - terrible product reviews. The Spider-Man game designed for the PlayStation2 platform scored a 55 percent ranking by Gamesranking.com, which is considered pretty bad. Some folks downplayed the poor reviews and attributed the lower stock price to a nearly year-long runup in anticipation of the SM3 opening. Activision also...
Ho-hum, another all-time high - the fifth straight record close for the Dow and the 24th gain in 27 sessions. That's the longest such streak since 1927 (perhaps not the most reassuring reference). But here's the thing: individual investors remain bearish. Most all the surveys show that the public isn't yet buying into the rally, with net inflows into equity funds continuing to lag. A survey by the American Association of Individual Investors found that...
I realize this is getting repetitious but, ahem, we've never spent this much at the pump - and it's likely to get worse. In L.A., the average price of a gallon of self-serve regular is $3.458, according to the federal government's weekly survey that covers the period ended today. That's up from $3.348 just a week ago. SF continues to outpace L.A., with the average price at $3.541, up from $3.462. What's going on? When...
Well, it's at least looking that way. Smith & Wollensky Restaurant Group has agreed to a revised $94.6 million buyout offer by the Patina Restaurant Group. The $11 a share offer is up from the earlier $9.25 and tops a revised $84 million proposal by Landry’s Restaurant Group. The Patina-Landry's bidding war has done wonders for the once-lumbering S&W stock, which just about doubled in price since Landry's initial $64.4 million offer. L.A.-based Patina, which...
Michelle Leder from footnoted.org comes across a nifty back and forth between the SEC and Hot Topic about how the City of Industry-based teen retailer characterized certain statements in its filings. The statements concerned, among other things, revenue recognition on Web sales and not differentiating its Hot Topic and Torrid stores, even though they have different profit margins and a different product mix. After the SEC began asking questions last August, lawyers for Hot Topic...
All right, so working on highways, bridges, mass transit systems and water and wastewater facilities is not likely to impress your supermodel girlfriend or your rap star boyfriend, but it will bring in some nice money for L.A.-based Aecom Technology. The civil engineering firm that Forbes ranked 82nd on its list of largest privately held companies is going public this week with an offering that could run close to $700 million (which will impress your...
Spidey rules: To little surprise, "Spider-Man 3" set an all-time box office record in its opening weekend, with $148 million in domestic ticket sales. That doesn't include the $227 million from 105 foreign countries since last Tuesday, when the film opened overseas. The strong opening suggests that other summer blockbusters - including "Shrek the Third," "Pirates of the Caribbean: At World's End," "Ocean's 13" and "Fantastic Four: Rise of the Silver Surfer" - could fuel...
The deal-making bad boy in Oliver Stone's 1987 "Wall Street" is being revived in a sequel called "Money Never Sleeps," which is being put together by 20th Century Fox and Edward Pressman, who produced the original. Michael Douglas is back in the role of Gekko, who was about to be busted at the end of the original (wonder if he'll still have those 80s-cool britches and slicked-back hair). The timing seems perfect for his return,...
It's the biggest box office opening ever in the U.S., taking in $59 million on Friday, according to Nikki Finke, who is monitoring the weekend business. These early numbers for "Spider-Man 3" beat last year's "Pirates Of The Caribbean: Dead Man's Chest," which had a first-day opening of $55.8 million. Based on Friday's results, Sony is looking at an opening weekend in the $135 million to $145 million range, which would be a record. Of...
This was the replacement ordinance passed by the L.A. City Council that requires LAX-area hotel operators to pay their workers the city's "living wage" ($10.64 an hour). L.A. business interests railed against the original measure and gathered enough signatures to qualify a referendum. The council didn't want any of that, so it rescinded the ordinance and replaced it with a new one. But that ordinance was essentially the same as the old one. Well, Superior...
It's Beverly Hills, about noon, at a crosswalk on Canon Drive (a half block south of Little Santa Monica). There's a youngish fellow, say around 30, who is straightening out his open-collar shirt and suit jacket. He has the kind of look that's telling the world he's very hot stuff - y'know an entry-level agent type. He stops at the curb of the crosswalk, lifts up his leg, and pushes the walk signal with the...
Media buyer John Rash goes through this week's top 10 shows for Ad Age (in the all-important 18-49 demographic, of course), and found that just 24 percent were sitcoms. Worse still, the average rating was a paltry 2.5. Only newsmagazines did worse. Reality TV made up 18 percent of the programs, but came out on top in ratings, with an average 3.6. Dramas cover almost half of the schedule and had a 2.7. (In case...
That's as in very early reaction - a little after one in the morning, as shot by NY Mag for its Web site. Sorry it's NY and not LA but I suspect the comments would be similar. The word seems to be OK but not great....
A federal judge in Manhattan has rejected claims that Marilyn Monroe's "right of publicity" had been violated when photos of the legendary sex symbol were sold without consent of a company founded by Monroe's heirs that licenses Marilyn t-shirts, key chains and photos. "Ms. Monroe could not devise by will a property right she did not own at the time of her death in 1962," wrote Southern District of New York Judge Colleen McMahon. The...
The Newport Beach-based guru of bond trading made news a couple of weeks back with word that he was auctioning off his collection of classic British stamps, and then donate the proceeds, roughly $4 million to $5 million, to Doctors Without Borders. Now for some details: Gross says he paid about $2 million for the stamps, mainly between 1998 and 2000. That's a pretty fair return, and Gross says it's not just based on the...
Microsoft-Yahoo merger?: The NY Post reports this morning that Microsoft has asked Yahoo to re-enter formal negotiations (Microsoft was turned down a few months back). Who knows where it will lead, but the Microsoft folks are feeling lots more pressure from Google, which picked up the Internet advertising firm DoubleClick last month. For Microsoft, attracting online advertising has been a huge frustration. How much might Yahoo go for? The guessing on Wall Street is $50...
Most cities would kill for an NBA Weekend, but Vegas is not most cities. MGM Mirage CEO Terry Lanni told analysts today that he's not interested in the All-Star game returning to Sin City, noting that a bunch of nastiness over the weekend scared visitors. Lanni attributed the trouble to an influx of undesirables from L.A. and elsewhere. Much of the wrongdoing involved nickel and dime stuff - trespass, battery, outstanding warrants, loitering, burglary and...
Jim Cramer of CNBC and The Street.com fame is wrong about a lot of things, but he's probably onto something in predicting that the Dow Jones board will ultimately accept Murdoch's buyout proposal. He figures that the board - not the Bancroft family, but the actual board of directors that's charged with overseeing the company - has stopped rubber stamping the wishes of the Bancrofts (or more precisely, their former consigliere, Roy Hammer) because the...
There's a small group of L.A. investment bankers whose careers have more or less moved in lockstep - from Drexel Burnham Lambert to Donaldson Lufkin Jenrette to UBS. And now, some members of that club are going off to do their own thing, led by Ken Moelis, who announced plans last month to step down as UBS's investment banking president. WSJ's Deal Journal reports that Moelis is enlisting Warren Woo, who left UBS last year....
I'm a little late on this one, but data gatherer TNS is out with its annual survey of millionaires - net worth, excluding primary residence - and L.A. County is tops, with 268,136 millionaire households. That's out of 3.3 million households in the county. The number of U.S. millionaire households has risen to a record high of 9.3 million in 2006, a 5 percent bump from the previous year. Here's the top 10: 1. Los...
L.A. billionaire Haim Saban gives Fortune a peek of how he does business in a profile that gets into his support of Hillary Clinton ("I think he likes her better than he likes me," joked Bill Clinton) and how he went after L.A.-based Univision. Actually, he's been pursuing the Spanish-language media giant for the past three years. Back then he went to see the press-shy Perenchio at his Bel Air, Calif., home to let him...
CBS slumps: First-quarter net income fell 5.9 percent, in part because of a 9 percent drop in operating income - and that's with the ad revenue gains from this year’s Super Bowl. They keep calling it "America's most watched network," but ratings have been slipping. Also, the radio side is in trouble, first with the loss of Howard Stern and now Imus. IAC gains: That's as in IAC/Interactive, the mish-mash of businesses overseen by Barry...
After meeting this afternoon, the board issued a statement confirming that about 80 percent of the Bancroft family's voting power opposes the Murdoch bid. But that represents just 52 percent of the voting power of the full company. As reported by the WSJ tonight, "the margin is thin, and the family is large and far-flung and didn't know it would be under pressure to express a preference until Tuesday, when CNBC broke the news of...
It's become the most frequently cited metric of a law firm's performance, but Bill Henderson, a law professor at Indiana University-Bloomington, wonders whether the numbers might be misleading or just flat-out wrong. Henderson, who is working on a project that analyzes data supplied to ALM (publisher of the widely followed American Lawyer 100), told the WSJ's Law Blog that some firms may be undercounting the number of equity partners for the purpose of jacking up...
That's how Dean Starkman glumly - and probably accurately - describes this morning's full WSJ coverage of Rupert Murdoch's buyout offer. While the Journal was scooped by CNBC ysterday morning in the breaking news, it clearly offered the most comprehensive coverage of the story - not an easy task when it's your parent company in the middle of the firestorm. Starkman says there's no way that the Bancrofts are going to turn down a 67...
Battling for Dow Jones: Is the Bancroft family united in its opposition to Rupert Murdoch's $5 billion bid for Dow Jones, parent of the WSJ? Don't count on it. Despite word yesterday that family members and trusts constituting more than 50 percent of the voting power did not plan to sell, an unofficial tally a few days earlier showed that less than half of the Bancroft's voters opposed a transaction. "It is unclear what happened...
That's assuming there is a battle. Some members and trustees of the Bancroft family, Dow Jones' controlling shareholders, say they plan to vote against the stunning News Corp. bid of $5 billion. Even so, the genie could be out of the bottle. Yes, the Bancrofts control Dow Jones through their Class B shares, which have 10 times the voting power of the company's common stock. But Gary Lutin, a shareholder advisor, said that the Bancrofts...
They should be back tomorrow. Light posting today....
The LAT has a "hey Martha" piece on p1 about those folks who twirl signs that advertise everything from Subway sandwich shops to condo developments. It turns out that it's become a competitive, even cutthroat business that can pay up to $70 an hour. Of course, that's only for spinning superstars like Randy Jenks, who is so good that Snoop Dogg flew him to Atlanta to spin a sign advertising his new album at the...
That's the average price of a gallon of self-serve regular in the L.A. area, according to the federal government's latest survey, and before you start moaning about the extra few bucks you're shelling out at the pump, just remember it could be worse. You could be living in SF, where the average price is a whopping $3.462 - a nearly 12 cent difference. Typically, the difference between L.A. and SF pump prices is two or...
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
New at LA Observed