Disney to test for lead: The Mouse House will inform Mattel today of its plans to test toys featuring Disney characters, including random testing of products already in stores. Usually, Disney and other companies that license their characters to toy companies have little involvement in the manufacturing process. But that's all changed with the major recalls this summer involving unsafe levels of lead paint. BTW, Mattel guarantees minimum royalty payments to Disney, so if sales plummet they'll be stuck. (NYT)
Broad gives to UCLA: The L.A. billionaire will be announcing today a $20-million donation for stem cell research – specifically, to buy laboratory equipment, provide research grants and endow professorships. In turn, UCLA will change the name of its Institute for Stem Cell Biology and Medicine to the Eli and Edythe Broad Center of Regenerative Medicine and Stem Cell Research. Last year, he donated $25 million to USC to build a stem cell research building. (LAT)
August homes sales plunge: We’re looking at a 50 percent drop from a year earlier and 25 percent from July, according to figures supplied to the Business Journal. That’s huge. “Everything was great until about a month ago. Then, one day – Thursday, Aug. 9 – everything changed,” Syd Leibovitch, owner of Beverly Hills-based Rodeo Realty, told the newspaper. Median prices, meanwhile, have held their own because most of the sales action has been on the high end.
OC home deals plummet: As of last week, 1,206 deals were in the works, down 600 from four weeks ago - before the financial markets began freaking out. Those numbers, says the Register's Jon Lansner, point to a lousy August (the report comes out this week). He cites numbers from Steve Thomas at Re/Max Real Estate Services that suggest it would take 14.73 months for buyers to purchase all homes listed for sale at the current pace of deals vs. 7.12 months a year ago.
Laid-off lenders: Countrywide's move to eliminate up to 12,000 jobs isn't getting much enthusiasm on Wall Street this morning. The stock is down 5.5 percent, and UBS has slashed its price target to $20 from $31 (the stock is under $18). All told, mortgage companies might wind up eliminating almost 100,000 jobs because of the housing slump - or 20 percent of the nation's real estate loan officers and mortgage brokers. "When you're born in a boom, you generally die in a bust," Countrywide CEO Angelo Mozilo told Bloomberg News. At least 100 mortgage companies have sought buyers or halted lending since the start of 2006.
Fast food moratorium?: Once again, city officials are poking their noses where they don't belong - this time proposing limits to new fast-food restaurants in South L.A. The idea is certainly well-intentioned - in just one-quarter of a mile near USC on Figueroa Street, from Adams Boulevard south, there are about 20 fast-food outlets - but the precedent is outrageous. If I'm a fast-food franchisee and South L.A. is my territory, what am I supposed to do? (I'd probably sue the city.) One restaurant consultant says, it's "like saying we're not going to allow anybody to sell Chevrolets anymore because we want people to buy nothing but Mercedes-Benzes." (LAT)
Food fight: The Applebee’s board was hardly unanimous in voting to sell the restaurant chain to Glendale-based IHOP. Applebee’s disclosed that five board members, including its chairman, its CEO and CFO, opposed to the $1.9 billion sale. Those five directors believe that the company would fare better under a stand-alone turnaround plan. That still leaves nine directors who voted in favor, but the split is somewhat unusual. From DealBook:
Applebee’s has already heard from one outside shareholder who finds its deal with IHOP unappetizing. Sardar Biglari, chairman of the Lion Fund, has said the $25.50-per-share sale price is too low, and pointed to the recent rise in IHOP shares as proof. Often, shares of an acquiring company will decline once a deal is made public. Mr. Biglari argued that IHOP’s stock rose because investors felt it was getting Applebee’s at a bargain-basement price. Interestingly, shares of IHOP were down 3.8 percent Friday afternoon.
Unfair treatment?: Celebrities often get all kinds perks and privileges because they're celebrities. But they also can be used to set an example when things go wrong. Paris Hilton was an obvious example, and now there's Wesley Snipes, who was indicted on tax fraud and conspiracy charges. His lawyer argued that the charges should be dismissed based on "selective prosecution" involving his race, but a federal judge ruled that the government is prosecuting him because of his fame, not his race. Here's a snippet, courtesy of Law Blog:
"From a prosecutor’s point of view, especially in tax cases, the primary objective in deciding whom to prosecute is to achieve general deterrence," wrote Judge Terrell Hodges. “Here, Defendant Snipes is admittedly a well known movie star, and a person of apparent wealth, whose prosecution has already attracted considerable publicity... "Since the government lacks the means to investigate and prosecute every suspected violation of the tax laws, it makes good sense to prosecute those who will receive, or are likely to receive, the attention of the media.”
Warner pays its way: Rather than wait for advertisers, Warner Brothers will be shouldering costs on a range of Web productions that will be announced today and include minimovies, games and episodic television shows. It will worry about lining up advertisers to recoup costs later. From the NYT:
The shift underlines a growing realization among the big Hollywood studios: Web entertainment is evolving so quickly that they must take on more financial risk to keep up. So far, Warner and most other traditional studios have tried to lock down a comfortable, low-risk business model before venturing too far online. That approach has slowed them down, delivering a competitive edge to scrappier, upstart production companies.