Follow LA Observed on Twitter here
He's back on the air next Wednesday - with writers. The Writers Guild has cut a deal with his Worldwide Pants production company that covers both his own show and "The Late Late Show With Craig Ferguson," according to the LAT blog Show Tracker. It's the first such deal the guild has struck and will put the screws on the other talk show hosts - Leno, Conan, John Stewart and Stephen Colbert - who also...
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.
December 2007
Alan Greenspan knows a thing or two about trying to project into the economic future and admits that it's pretty much a lost cause. The former chairman of the Federal Reserve, who has been forecasting since the early 1950s, tells NPR that he was as bad then as he is now. The problem, of course, is that economies turn good or bad for reasons that can't be anticipated in forecasts. Wars, oil shocks, credit crunches,...
That's the likely launch date for contract negotiations between the Directors Guild and the media companies (aka the Alliance of Motion Picture and Television Producers). The directors will no doubt ask for more money in the digital arena, but Variety reports that their proposal won't be as expansive as the deal being demanded by writers. If the two sides reach an agreement, the digital terms are expected to serve as a de-facto template for talks...
Don't expect the brouhaha over living wages at LAX-area hotels to end just because an appellate court upheld a city ordinance requiring hotel owners to pay the higher hourly rate ($9.39 an hour with benefits or $10.64 without). Hotel lobbyist Harvey Englander tells the LAT that his side is considering an appeal - or perhaps a referendum or initiative. You may recall that the hotel owners had gathered enough signatures to put the living wage...
Stock prices for most of the big media companies have barely budged since writers walked off their jobs in early November - a reflection of just how large and diversified these businesses are (and what an uphill battle the Writers Guild faces in trying to cut a breakthrough deal). “What shows are on this January don't make any difference to the value of these companies in a couple of years," Mark Greenberg, a senior portfolio...
The parent of the OC Register had planned to buy out two private equity firms - Blackstone Group and Providence Equity Partners - that held a combined 45 percent stake in the company. But the $500-million deal has been postponed, according to the WSJ, apparently because of the credit crunch (not to mention the not-so-terrific state of the newspaper industry). The Journal reports that Freedom was all set to get financing from GE Capital and...
The assassination of Benazir Bhutto, along with a decline in crude-oil stockpiles, should keep prices above $96 a barrel today - and perhaps a lot higher. Actually, some analysts are surprised that the Bhutto news hasn't led to an even higher spike. Still, the numbers could be amplified because of thin holiday week trading (when there’s a rally with low trading volume, it's harder to find sellers). At last check, oil was trading at $96.65...
He'll be back on the air on Jan. 2 with or without writers, reports the NY Post, and considering that his production company has no new talks scheduled with the Writers Guild, the guessing is that it'll be without. The two sides met late last week, with the Letterman folks hoping that the guild would agree to an interim deal that allows their writers to go back to work (essentially letting Letterman go along with...
You might be surprised how many folks are putting in three and even four days this holiday week. A ays=0&postorder=asc&vote=viewresult" title="WSJ.com">WSJ.com poll finds that only 23 percent are taking the whole week off (a suspicious number considering that anyone not working might also not be taking online surveys). Anyway, for what it's worth: Are you working... -No days (23%) -One day (6%) -Two days (14%) -Three days (30%) -Four days (21%) -Five days (3%) -More...
Normally we focus on Dataquick's median prices, which have stayed relatively stable in L.A. County for much of the year (the monthly numbers had been rising until recently). But a new report that's based on a national index has L.A. near the bottom of major cities when it comes to price depreciation. Some analysts consider the S&P/Case-Shiller index to be a more reliable gauge of what’s going on than just compiling median prices because it...
The head of DreamWorks Animation tried and failed to broker a compromise last week between striking writers and the media companies. Nikki Finke has all the details, reporting that Katzenberg met with 30 to 40 TV showrunners who were questioning the WGA's strategy, which some believe has been unnecessarily hard line. He's concerned that if the writers don't cut a deal before the Directors Guild begins its contact talks next month, the WGA will become...
Lots of luck. As usual, the preliminary numbers are being deciphered any number of ways. Here's the lede of Monday's WSJ story: The final weekend of the holiday shopping season will likely bring a sigh of relief from many retailers who feared that sales would be weak. The Journal cited ShopperTrak RCT Corp., which estimated a 3.6 percent increase in holiday sales. Now here's the lede of this morning's NYT holiday sales story: American consumers,...
Remember John Hockenberry? He was a correspondent for NBC's "Dateline" until getting the ax a couple of years ago. Hockenberry got involved in the MIT Media Lab and is set to co-host a show on NY public radio station WNYC (he's a former NPR reporter). Anyway, his experiences at NBC are the basis for a lengthy and revealing examination of how the network's news operations worked. As you might guess, it's not flattering. "Dateline's" programming...
The jobless rate rose to 5.3 percent in November from 5.1 percent the previous month - not a huge jump, but when you compare it with the 4.4 percent level in November 2006, well, there's your softening economy. Statewide, the unemployment rate is unchanged, at 5.6 percent, and the U.S. was at 4.7 percent. A separate survey shows that 16,600 jobs were added countywide in November from a month earlier, with trade, transportation, and utilities...
There's nothing like an activist shareholder to make things interesting. Soon after news of billionaire Nelson Peltz acquiring a 14 percent stake in Cheesecake Factory, another big investor called for the resignation of the company's founder and CEO, David Overton. Robert Olstein, whose management firm holds a 2 percent stake, told Cheesecake's directors that the company "requires a proven, professional management team which can balance orderly growth with consistent improvement in operations, profitability and ultimately...
With New England likely to be going for an undefeated season, next week's matchup with the NY Giants could be the game of the year. Trouble is, it's on the NFL Network, which none of the major cable systems carry because of a long-running contract dispute. The NFL wants the channel on a basic cable package, while the big cable companies want it on premium. League Commissioner Roger Goodell, looking for a way out of...
Wacky economics 101: So you’ve read all those gloomy stories about a sluggish holiday shopping season, right? And retailers are having these blowout weekend marathon sales, right? And for the second week in December, total foot traffic at retail outlets fell 8.9 percent from a year earlier. And yet, consumer spending rose last month by the most in more than two years - and well ahead of forecasts. Early holiday discounts may have played a...
This will be the year most remembered for the subprime meltdown and resulting credit crunch, though up until now it's been a story short on specific culprits. But check out the lawsuit filed yesterday by Barclays against Bear Stearns. The complaint alleges that Bear Stearns, along with Ralph Cioffi, top manager at one of Bear's hedge funds, and Matthew Tanin, the group's chief operating officer, had "long known" that the fund and its underlying assets...
It's a pretty intimate group of seven (not counting Zell) that includes Jeff Berg, CEO of International Creative Management (that’ll create some interesting challenges over in the Calendar and Business sections), Brian Greenspun, president and editor of the Las Vegas Sun (and son of the legendary Hank Greenspun), William Pate, chief investment officer of Equity Group Investments (and Zell's right-hand man), and two directors under the old Tribune: William Osborn, chairman and CEO of Northern...
So much for Chicago. Tribune's new chairman and CEO seems convinced that the idea of centralizing operations under one roof was pretty much a bust. He told the Chicago Tribune that the new approach under his regime will be delegating authority and holding people responsible within all the various business units. That means LAT publisher David Hiller will report directly to Zell. "Right now," Zell said, "somebody decided that we should put advertising on the...
The parent company of the LAT and KTLA finally completed its $8.2 billion buyout this morning. Real estate mogul Sam Zell, who engineered the deal to go private, becomes chairman and CEO. Chicago-based Tribune is left with about $12 billion in debt....
That's one of the tea leaves retail analysts and economists will be looking at this week - one of the few real-time indicators of holiday sales. During a conference call this morning, Chairman and CEO Fred Smith said early December was a little slower than expected, but "we have seen some strengthening as we get closer to Christmas. This week, for example, has been particularly strong." Monday was the company's busiest day on record (though...
Completing Tribune deal: Yup, it's all but done, with those reluctant bankers signing off on the remaining funding needed to finance Sam Zell's $8.2 billion plan to take the company private. They’re shooting to finish it up today or tomorrow. The most intriguing bit of news is the decision by Zell to be CEO, as well as chairman. The CEO part was unexpected and suggests that the guy will be making some big-time changes. Also,...
He's billionaire Nelson Peltz, whose Trian Star Trust investment fund has acquired a 10 percent stake in Calabasas Hills-based Cheesecake Factory. Peltz is no ordinary investor - he's the same guy who won seats on the board of H.J. Heinz (he was unhappy with the stock price and wanted the company to spend more on marketing). He's also made his opinions known at Wendy's, Kraft Foods and Cadberry Schweppes – all part of his vast...
That's what the WSJ's M&A guy Dennis Berman just posted, based on three sources. And Tribune stock, after falling sharply this morning, is back up over $33 a share. Berman notes that the company received a solvency opinion from a third party adviser, which supposedly will provide comfort to all parties - as will the pending sale of the Cubs, which is expected to go for over $1 billion. That money will help in making...
*Update: Zell is adding another $65 million to his initial investment of $250 million, though contrary to earlier wire reports that I used in my earlier post, the infusion had been part of the original deal. So nothing unexpected. Tribune stock took a big hit this morning, falling as low as $30.81, but it has since recovered to $32.32 (the buyout price is $34 a share). All this comes after a Chicago Tribune story that...
Tribune deal gets interesting: It'll almost certainly go through in the next few days, but the Chicago Tribune reports that the company’s banks are squawking about having to finance the rest of the deal. In normal times, banks would have no problem lining up outside investors and thus leverage the financial risk. But given the company's uncertain future, not to mention the ongoing credit crunch, Tribune bankers would have to offer outsiders the kind of...
That's the videogame industry's annual get-together, which moved to several Santa Monica hotels last summer after 12 years at the L.A. Convention Center. The Santa Monica switch was part of E3's unusual downsizing from a 60,000-plus-person expo to a more of a conference, with just 5,000 attendees. This summer, it's back downtown, though with the new format only a small portion of the Convention Center will be used. That makes it a low-impact event, revenue-wise....
This just in from our NY bureau (via Craigslist and Dealbreaker). Is there a movie here? the holidays suck. i never thought that i'd ever say that but this is the first time in my life as an adult that i don't have a girlfriend to share in the experience with and it sucks. bad. 3 weeks ago i came home from a night out for steaks and cigars with some of the guys from...
Can anybody figure out why CW's "Gossip Girl" has only so-so Nielsen ratings but is routinely the most downloaded show on iTunes? Or why the apocalyptic drama "Jericho" was cancelled by CBS and then brought back after the show's online fans went nuts? Josh James is CEO of a Web-analytics firm called Omniture, and he tells Ad Age's MediaWorks that online preferences aren't always so mysterious. I'm always a little suspicious of these consultant types...
Give Kevin Martin credit - not only does the guy orchestrate far-reaching plans to overhaul the nation's communications industries, but he does it on two separate votes with two separate sets of supporters. In one 3-to-2 vote, he sided with the agency’s two other Republicans to relax the newspaper-broadcast cross-ownership rules in the 20 largest markets. That could have been a huge deal in L.A., where Tribune owns both the LAT and KTLA, but earlier...
Don't get too excited - they're only up 2 percent from October to November. Year-over-year, Socal sales fell 42 percent - the weakest November since the Dataquick folks started compiling housing statistics. The increase from October was mostly the result of an 11.5 percent jump in newly built homes (single-family resales were about even and condo resales fell 6 percent). Sales almost always decline between October and November, but clearance prices might be luring a...
Money and the mayor: During his first two years in office, Mayor Antonio raised $19.6 million for his favorite causes, largely by asking companies and individuals for five- and six-figure contributions. LAT story has lots of examples of the corruption (well, what else do you call it?). When Los Angeles Mayor Antonio Villaraigosa arranged a reception celebrating trade with Mexico, two real estate developers stepped in to pay the $25,000 catering bill. One wants city...
Purists can start to relax - it's looking like the Trojans will stay put. School officials have backed off on a proposal to run the Coliseum, as long as significant improvements are made. "It's been our home for over 80 years," Todd Dickey, USC senior vice president and general counsel, told the LAT. "We have all our tradition and history in that facility, and it's where our fans want to stay. It's an important part...
Forbes is out with its annual survey of basketball franchises, and the Lakers roll in at No. 2, with a valuation of $560 million and operating income of $31.8 million. The team’s value is down 2 percent from last year (only four of the 30 franchises had declines in value). Also, Forbes compares the number of wins with the team’s payroll and the Lakers are well under the league average – and have been for...
Here we go - desperate developers employing desperate means to unload all those downtown properties. MJW Investments, developer of Santee Village in the Fashion District, is offering a three-year lease on a Mini-Cooper to anyone buying one of its lofts. MJW President Mark Weinstein said he's gotten two takers. "It made a big splash and got national coverage," he told the Downtown News. Purchase of a Kor Group loft includes a three-night trip with airfare...
Last-minute rush: Today will be the busiest shipping day of the year, with the Postal Service expecting 1 billion cards, letters and packages to be mailed out. FedEx expects to handle 11.3 million packages, the most ever processed in a single day. Consider yourself warned. Sluggish holiday shopping: November's numbers were quite good, but sales have taken a significant drop in December. That’s not a huge surprise, but it has retailers preparing for the worst....
Most of America wouldn't have Countrywide Financial on a list of admired companies, but the world of professional golf is not most of America. In that world, money conquers all. So during this weekend's Target World Challenge at Sherwood Country Club in Thousand Oaks, the Countrywide name is all over the place (it's been a sponsor for years). The mortgage lender is also running commercials for the TV broadcast, pushing all kinds of loans and...
Gov. Arnold is expected to declare a state of emergency under never-before-used rules that would force lawmakers into a special session. Under the action, the Legislature would have 45 days to find ways to plug an estimated $14 billion budget shortfall. If they can't, they'll be prohibited from doing any other legislative work or adjourn until they do. Big-time budget cuts are a certainty, though higher taxes will be a tougher sell. Here's more from...
It's starting to look that way, at least according to Variety. The trade is quoting folks close to the matter as saying that several late night hosts might be back on thed air by Jan. 7, if not sooner. You might recall similar rumbles a few weeks back, quickly denied by all sides. This time, though, it might be different. All the late night shows are getting killed in the ratings as the big shows...
Not that we want to burst any bubbles among the short, tubby, balding guys out there (gals too), but is it just possible that your good-looking date might be interested in more than dry wit and a winning personality? The Wealth Report's Robert Frank delivers this sobering news, via a survey by Prince & Associates, a Connecticut-based wealth-research firm. The survey, which polled 1,134 people nationwide with incomes ranging from $30,000 to $60,000, asks "How...
Longtime business section editor Martin Romjue has left the paper, and his position will be eliminated. Reporter Muhammed El-Hasan will stay on and handle some of the biz section duties. The paper has been trimming its workforce for some time - editorial, ad people, pressmen, and even janitorial staff - as it continues to transition into Dean Singleton's Los Angeles Newspaper Group. This includes the move towards "common pages" between the Daily News, Daily Breeze...
Er, I don't want to make a big deal out of this, but today is the first day that Rupert Murdoch really takes over the WSJ and if you click over to the paper's Web site this morning, the very top item – ahead of inflation worries and climate talks, is a blurb headlined, "Kung Fu Monks Bow Out." It's a feature from this morning's paper about the decision of monks at the famous Shaolin...
Toll roads gaining favor?: Let's hope so. The "congestion pricing" plan being pushed by the MTA and Caltrans would mean paying a toll charge for the use of certain carpool lanes in return for faster speed. Toll prices would rise during rush hour. At first, the plan would include carpool lanes on the 110 Freeway in South L.A. as well as the 10 and 210 freeways in the western San Gabriel Valley. Of course, there...
It depends on who you're listening to. Former Fed Chairman Alan Greenspan tells NPR that the odds are rising because of a slowdown in fourth-quarter economic growth. "We are getting close to stall speed…and we are far more vulnerable at levels where growth is so slow than we would be otherwise. Indeed it’s like someone who has an immune system that’s not working very well is subject to all sorts of diseases and the economy...
Boy, there must be a writers strike. The late-night ABC news program beat both Leno and Letterman for the second consecutive week. Both talk shows have been in repeats since the WGA strike began six weeks ago. Low ratings mean lower ad revenues, of course, and these are not small numbers: Last year, Leno generated $250 million in ad revenue and $160 million in profits, or about 15 percent of the entire network's bottom line....
They plan to begin bargaining with the media companies after the first of the year. That will certainly change the complexion of the writers impasse, most likely providing additional leverage to the networks and studios. If the directors manage to cut a quick deal, the Writers Guild will be under even more pressure to resume contract talks. Michael Apted, president of the directors’ guild, said the DGA would wait until January in order to give...
More lead found: This time it's in children's jewelry, and stores across California are being ordered to pull bracelets, rings and necklaces contaminated with as much as 600 times the legal limit. State regulators said it’s just the first step in an enforcement campaign authorized by a new law banning unhealthful levels of lead. From the LAT: In Southern California, inspectors said they purchased lead-laced bangles at three stores in the Glendale Galleria: Macy's, GapKids...
Not a lot - just 12 - but among them are notables, such as national editor Anthony Bianco and photo editor Larry Lippman. Silicon Alley Insider's Peter Kafka hears that ad pages are way down (though Web stuff is up), and the stock of parent company McGraw-Hill is in the tank. BW head Steve Adler calls the changes a reorganization that involves the integration of print and online. “It’s exceedingly difficult to part with valued...
Janice and Henri Lazarof have been intensely private about their love of art - until this morning. They're the folks who have given the Los Angeles County Museum of Art 130 works by major artists, including 20 by Picasso. The LAT estimates that the collection is worth more than $100 million. About 80 works will go on view next month, in advance of the first phase of an expansion and renovation program. So who are...
The November numbers show another huge drop in classified advertising, what's become of the bane of the newspaper business. Within that category, real estate plunged 39.8 percent, with the biggest declines in L.A., Chicago and Florida (the company doesn’t break out specific properties). Help-wanted ad revenue was down 28.4 percent and automotive was down 7.6 percent. All told, the parent of the LAT and KTLA (Channel 5) had a 3.3 percent decrease in revenue; on...
Squabbling among writers?: The LAT reports that a number of prominent WGA members are not happy about the way guild leaders handled last week's contract talks - specifically, the decision to refocus the union's efforts on issues that some consider peripheral to the Internet compensation issue. They're pressing union leaders to get the talks back on track before the Directors Guild opens its contract negotiations with the media companies. The directors, you see, might not...
Pity the WSJ staffers who were left out of News Corp.'s big bash at the NY Hilton on Friday and instead celebrated this afternoon in the not-so-jolly 12th floor conference room of the Journal's HQs. It might even still be going on - you know those wild and crazy currency market reporters. NY magazine was sent the email invitation that went out to staff: -----Original Message----- From: [Redacted] Sent: Monday, December 10, 2007 11:08 AM...
As you might imagine, newspapers have been a disaster, with a 5.2 percent drop in revenue for the first nine months of the year. But other ad sectors have taken their lumps as well. All told, advertising expenditures grew just 0.2 percent to $108.2 billion, according to TNS Media Intelligence. Magazine ad revenues were up 4.7 percent, though the number of advertising pages was flat. The biggest slides among the top advertising categories were in...
But only by a quarter-point, to 4.25 percent, and that's bound to disappoint some on Wall Street who were hoping for a half-point cut (stocks are already tumbling). The central bank's policymakers, however, kept the door open to future cuts, which some economists believe is the only way to avert a recession. The Fed also cut the discount rate to 4.75 percent, from 5 percent, with the hope of encouraging bankers to keep up their...
Forbes had a piece last year that figured Igor Olenicoff was worth $1.6 billion and deserved a slot on The Forbes 400. Olenicoff pooh-poohed the estimate, claiming that he didn't own Newport Beach-based Olen Properties Corp., which has 11,000 residential units and 6.25 million square feet of commercial space in California, Nevada, Florida and Chicago. He said Olen was actually owned by some offshore entities in which he had no stake. Well, it turns out...
Fed meets on rates: Not much action this morning on Wall Street because everybody is waiting for the Federal Reserve to make its decision on interest rates (announcement at 11:15). Most everybody expects at least a quarter-point drop, perhaps more. But almost as important as what the Fed decides will be the statement that goes along with it. Even with these and further rate cuts in 2008, it's not at all clear how quickly the...
Well, what do you expect when the two sides hate each other and don't trust each other? The various accounts of how and why the talks between the Writers Guild and the Alliance of Motion Picture and Television Producers broke down suggest that beyond all the rhetoric, neither side is ready to cut a deal. It's too soon. Let’s pull back and look at the big picture: For more than a year, both the guild...
For much of the year the Port of Los Angeles has been commemorating its centennial, but the big celebration is this Sunday at the Waterfront Promenade in San Pedro. (Harbor Boulevard and 3rd Street). The event runs from 4 to 7:30 and will have food, music and fireworks. Free parking is available at 22nd and Miner Streets, and 22nd and Signal Streets in San Pedro with free shuttles to event site. The fireworks start at...
It's another victim of the cut-throat computer game. Mexican billionaire Carlos Slim invested $2 billion into the chain, but the company couldn’t compete with Best Buy and Wal-Mart, which offered greater selection and lower prices. Its acquisition of Bay Area-based The Good Guys was a disaster, and by February, CompUSA announced plans to shutter 126 stores, more than half of its then-total. That included (I think) all local stores (the closest CompUSA is now in...
Writers talks looking bleak: Don't be surprised if the studio and network side break off negotiations as early as today. Apparently, there's been more of the same kibitzing about counter-offers and counter-counter-offers. And, in the you-gotta-be-kidding-me department, the moguls broke off talks early the other day to celebrate the first day of Chanukah (is there a dradle reality series in the making?). The main point seems to be that for whatever reason the media companies...
Sure, there are terminals to be built and people movers to be installed, but what about the smaller stuff that doesn't require years of study and litigation? Along with the restrooms are a bunch of broken elevators and escalators – not to mention the airport's central utility plant that needs overhauling or replacing. Gina Marie Lindsey, the new executive director of Los Angeles World Airports, has a laundry list of these upgrades that she wants...
After yet another strong day on Wall Street, the Dow is now less than 400 points from 14,000. Today's gains are largely due to the Bush administration plan to freeze interest rates for subprime borrowers - another supposed sign that the credit mess is stabilizing (Countrywide Financial was up big-time on the news, as was KB Home and other homebuilders). Of course, fixing rates at lower levels also means that investors won't be getting the...
No recession, but... Economists at UCLA's Anderson Forecast say that California and the U.S. are being whacked by a terrible housing market, high oil prices, falling government revenues, blah, blah, blah, though none of it is enough to result in a full-blown recession. That's pretty much what they had projected last quarter. For all the bad news, California still has several healthy sectors, including health care, tourism (remember the weak dollar), and education. Besides, the...
I have non-LABO commitments today and tomorrow, so no morning headlines and limited posting....
The Writers Guild supposedly will deliver a counteroffer to what the media companies proposed last week. No one is sounding especially optimistic that a deal can be reached anytime soon, but tea leaf-reading has been pretty unreliable so who knows. The latest public squabble is over a proposal by the Alliance of Motion Picture and Television Producers for a fixed $250 annual residual on streaming video for one-hour network dramas. "We have to get a...
It's a little too early for specifics, but Vivendi's purchase of a controlling stake in Santa Monica-based Activision might not be the greatest news if you're a small game developer or publisher. The long-talked about industry consolidation has finally arrived, which means a few large players controlling much or all of the business. Of course, the deal makes perfect sense for both companies. Under the agreement, the new company will be called Activision Blizzard, with...
Call it spin, posturing or whatever, but the NYT's Michael Cieply reports that entertainment executives were "privately expressing shock" that the Writers Guild leadership angrily dismissed the first phase of their re-jiggered proposal, something called "New Economic Partnership." (Note to execs: Never trumpet a negotiating position as a "partnership." It sounds phony, even if you're on the level, which you're probably not. Also, this business about writers and producers being "partners" is usually a crock...
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