Friday morning headlines

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 the country, especially the Midwest. Earlier this week, Chicago was paying more for gas, on average, than L.A. But a Washington Post-ABC News poll found that pump prices would have to reach $4.38 a gallon (on average) for folks to significantly cut back on their driving. In car-centric L.A., the number might even be higher.

Tainted fish? The latest health scare from China: A Santa Fe Springs seafood importer, Hong Chang Corp., is recalling frozen fish that could contain a potentially deadly toxin. The shipments were packed in 22-pound boxes that were labeled "Monk fish, gutted and head off, Product of China." But the FDA said that tests had found potentially lethal amounts of tetrodotoxin, a substance usually associated with the skin and certain organs of the puffer fish. China ships lots of fish to the U.S.: a half billion dollars worth of seafood come into the ports of Los Angeles and Long Beach alone. Two Chicago-area people became ill after eating soup that contained the fish. LAT

Tracking Chinese exports: It's a lot trickier than you might think, which is why these food scares are actually kind of scary. Cargo is being rerouted through other ports in order to avoid tariffs that the U.S. and European nations have been tacking on to combat Chinese "dumping." Last year, the European Union reported 84 instances of food trans-shipped from China, up from 50 the year before. Trans-shipping is illegal, but regulations are very hard to enforce. From the WSJ:

Caroline Smith DeWaal, food safety director at the Center for Science in the Public Interest in Washington, says that people suspect that trans-shipping is a big problem for food imports in the U.S., but that the picture remains murky. That is partly because countries can legally import ingredients and then either process them or combine them with other homegrown ingredients and then export the product to another country. That can make the origins hard to discern. "It's a hidden problem in the sense that it's happening below the government's radar screen and even the radar screen of some of the buyers of the products," Ms. DeWaal says. A spokesman for the Food and Drug Administration said the agency couldn't immediately comment on the problem.

Poor hockey: Here it is Stanley Cup finals time, and there's a local team that's made it for the first time. Exciting, huh? Huh? The sport keeps getting kicked around, despite a 6 percent increase in regular-season revenue. It's not that hockey doesn't have fans - it's just that there aren't nearly enough of them to get the major networks interested. And if you don't have national TV exposure, you're pretty much in palookaville. Last weekend, NBC broke from an Ottawa Senators/Buffalo Sabres game in overtime to broadcast a pre-race show for the Preakness Stakes, directing fans to the obscure cable network Versus (which missed the first couple of crucial minutes). Poker tournaments are scoring more viewers. From the LAT:

NHL franchises focus hard on attendance because the league can't command broadcast riches enjoyed by the NFL ($4 billion annually), Major League Baseball ($600 million) and the NBA ($600 million). Its NBC deal calls for profit-sharing rather than a guaranteed check, and the Versus cable network will pay the NHL about $60 million this year. The average number of viewers watching the nine regular-season NHL games that NBC broadcast fell by 2% from a year ago to 1.3 million, and viewership for playoff games through the conference finals was down 5% to 1.4 million.

Tribune saga continues: Nothing has come easy in the company's efforts to sell itself. Shareholders of the Chicago-based parent of the LAT have tendered 92 percent of its shares, at $34 a share, but in order to borrow enough money for the sale Tribune was stuck with higher interest rates and a shorter window to pay off the loans. That speaks volumes in a borrowing market that makes "Crazy Eddie," the fast-and-loose discount electronics merchant, look like a tightwad. And of course it raises questions about the ability of Tribune to service a very large debt load, something that Sam Zell, the company's new chairman, claims to be pooh-poohing. AP

Corporate pay gap: Never mind comparing the CEO's pay with some lowly company private - the disparity is becoming noticeable with the third, fourth and fifth in command. In the 1960s and 70s, CEOs running the big companies earned 80 percent more, on average, than the third-highest-paid executives. By the early part of this decade, the gap between No. 1 and No. 3 was 260 percent. From the NYT:

The pay of chief executives, analysts say, is being driven by superstar dynamics similar to those that determine the inordinate rewards for pop stars and athletes — a phenomenon first explained by Sherwin Rosen of the University of Chicago in 1981 and underlined more than a decade ago by the economists Robert H. Frank and Philip J. Cook in their book “The Winner-Take-All Society” (Free Press, 1995). As American companies, American hedge funds — and even American lawsuits — have grown in size, it has become ever more valuable to get the “best” chief executive or fund manager or litigator. This has fueled a fierce competition for talent at the top, which has pushed economic rewards farther up the ladder of success, concentrating the richest pay levels even more.

Moneyguys like Cannes: They're tripping over each other this week, sipping champagne and riding around in yachts the size of subdivisions. Among the players that are making appearances: Merrill Lynch, Citigroup, Royal Bank of Scotland and JPMorgan Chase, Atticus Capital and various companies backed by Providence Equity Partners and the Texas Pacific Group. Also in Cannes is L.A.-based Relativity Media, the financial intermediary that’s run by super-schmoozer Ryan Kavanaugh. JP Morgan's John Miller, who helped pioneer bank financing for movies, says that five or 10 years ago only a few banks came to Cannes. "Now there are 60 to 80 banks there, hustling." NYT

Negotiating with yourself: Or in the case of MGM Mirage, your own controlling investor, who happens to be L.A. billionaire Kirk Kerkorian. UBS and law firm Weil, Gotshal & Manges have been hired to advise MGM on the overtures by Kerkorian's investment firm, Tracinda. Those overtures are for the Bellagio hotel and the CityCenter development project. Kerkorian is looking at other possibilities, such as splitting up or selling the company. Or he may just swap his stock for the two properties, which may be worth $10-$12 billion. Bloomberg

Ovitz in music biz?: One Equity Partners, the private equity arm of J.P. Morgan that unsuccessfully went after EMI, was planning to appoint the former show biz svengali chairman of the music giant. Ovitz, who served as a consultant to EMI during and after his tenure at Creative Artists Agency, had mapped out a business plan for EMI that the One Equity folks apparently liked, according to the NY Post. Private equity firm Terra Firma Capital Partners seems to have the upper hand in the bidding.

Ovitz's plan, according to sources who saw it, was to essentially build out EMI's talent management capabilities and convert the company from a traditional record label with analog distribution to a digital marketing and promotions outfit. EMI has already treaded lightly down a similar path through innovative deals with Robbie Williams and Korn that give the label a cut of those artists' touring, merchandising and music sales. "A critical component of his plan called for a massive restructuring of EMI's artist and repertoire department," said a second source.