Thursday morning headlines

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 Diller, and which include West Hollywood-based Ticketmaster. Sales at Ticketmaster jumped 26 percent to $309.9 million - and accounted for 19 percent of IAC's revenue. Concert tickets for the Police and Kenny Chesney apparently helped out a lot.

Dumb talk on bank merger: Here's one you don't see every day: Barb Stanton, a talk show host on KIXW-AM in Victorville (it's a Clear Channel station), said that East West Bancorp's planned acquisition of Desert Community Bank won't be good for Desert Community customers or employees, noting that "it'll be a slow phase out and we're gonna see more Chinese faces in the bank than ever before, I predict." Stanton, who encouraged listeners to withdraw their money from Desert Community, called the merger a "dirty little trick, a dirty little game" and said "the big players have got it all laid out and panned out and unfortunately we're going to be at the bottom of the pan." Dominic Ng, East West's CEO, called the comments "inexplicable" (well, yeah, that’s putting it mildly). No comment from the station - natch. Star-News

Burkle eyes American Media: He got nowhere with his offers for Tribune and Knight-Ridder and now the L.A. billionaire is taking a look at the company that publishes the Star and National Enquirer (given his frequent appearances in the NY Post’s Page 6, it’s a delicious turn of events). The Post reports that he's working on a deal that would merge American Media with Source Interlink Cos., which he controls through an affiliate of his investment company Yucaipa Cos.

Suspicion over DJ options: How else do you describe an investor who plunked down an option to buy 280,000 shares of Dow Jones for $40 - less than a week before the big Murdoch bid shot up the stock to nearly $60 a share? (Until then, the stock had been in the mid-30s and going nowhere.) Actually, there were a bunch of big DJ options trades last week. "The chances of this being just shrewd timing are zero,” Jon Najarian, told the NYT. No word yet from the feds, though they routinely monitor unusual trading activity.

Mozilo takes pay cut: But the chairman and CEO of Countrywide Financial Corp. stresses that it doesn't mean he’s being overpaid. It’s just an attempt "to be responsive to the environment we're in today" of closer scrutiny of executive compensation. "I don't want to be the lightning rod that casts any negativity on the company," he told the WSJ. So how much is the cut? Mozilo's base salary, performance-based bonus and equity-incentive pay will be reduced by between 48 percent and 62 percent this year, depending on company performance (last year those items totaled $42 million). And he'll still get a long-term incentive plan; last year, he picked up $72.2 million from exercising options.

The new policies won't silence critics. "They're slowly moving toward performance-based pay, but they're not there yet," said Richard Ferlauto, director of pension and benefit policy for the American Federation of State, County and Municipal Employees, based in Washington. The federation has proposed a resolution, to be voted on by Countrywide shareholders at the annual meeting June 13, to give them an annual, nonbinding vote on compensation. At last year's annual meeting, a similar resolution, opposed by the company, obtained 43% of the votes, falling short of the needed majority.

Code revolt: Lots of coverage on how Internet users have been distributing a secret code used by the technology and movie industries to prevent piracy of high-definition movies. The NYT is calling it "a lesson in mob power on the Internet and the futility of censorship in the digital world." Apparently, it came in response to a series of cease-and-desist letters that demanded the code be removed from several Web sites. Well, instead of wiping out the code, the goons just plastered them all over the place. They wound up on Digg.com, which promptly took them down. But then the site was overrun with more postings that had the code, at which point Digg gave up. LAT

Another bullish port study: This one predicts that the number of containers going through the Ports of L.A. and Long Beach will jump more than 9 percent this year, to 17.2 million TEUs (twenty-foot-equivalent units). In 2000, they handled 9.5 million TEUs. Much of the action, as usual, is coming from China, Japan and Korea, but there's also a bunch of export activity, helped by the weak U.S. dollar. Press-Telegram

Diesel rules lose: Forget about those tougher restrictions on diesel pollution, at least for now. A federal judge has ruled that the South Coast Air Quality Management District cannot force railroads to obey local pollution laws. Locomotives are responsible for more than 32 tons per day of pollutants, which is equivalent to 1.4 million cars. From the LAT:

AQMD officials last year passed three regulations designed to cut idling time and measure health risks in neighborhoods near rail yards, asserting their authority to regulate emissions under the federal Clean Air Act and state policing laws. Two railroads and a trade group filed suit, saying that under special exemptions passed by Congress more than a century ago, they do not have to abide by local laws that could interfere with interstate commerce. Officials at Burlington Northern Santa Fe Railway and Union Pacific said they are spending billions to replace older, dirtier equipment, and have voluntarily cut idling times. U.S. District Judge John F. Walter, based in Los Angeles, acknowledged the region's dismal air quality but nevertheless ruled in favor of the railroads.