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L.A. has never been known for its big corporate presence, but this is getting ridiculous. Computer Sciences, a very large and successful tech consulting company, is moving from El Segundo to Falls Church, Va., where it has a growing presence (lots of government work). Here's the LAT story. These days CSC has very little of its workforce in L.A. - only 200 or so employees - but the company goes back almost 50 years, just...
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Mark Lacter covered business, the economy and more here from 2006 until his death on Nov. 13, 2013.
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January 2008
Let’s call this shareholders revenge. SRM Global Fund, the hedge fund run by former UBS trader Jon Wood, has taken a 5.19 per cent stake in the Calabasas mortgage lender and is seeking to block the pending sale to Bank of America. Just not enough value for shareholders, according to SRM’s filing. “We strongly believe that the terms of the proposed merger with Bank of America are contrary to the interests of the company’s shareholders,”...
More money for Tribune to pare down that monster debt. Hudson Capital, which already owns Sunset Gower Studios, has purchased the Hollywood property that used to be the original Warner Bros. studio and is now the home of Channel 5. Purchase price, according to the LAT, is $125 million. It's the first major piece of real estate that Tribune has sold since Sam Zell took over last month. The sale to Hudson was pending since...
I have deadline commitments elsewhere so posting will be very spotty over the next couple of days....
Bank of America CEO Ken Lewis told an investor conference today that the purchase is moving along and won't require any more capital (a stock sale last week raised almost $13 billion). Countrywide reported a fourth-quarter net loss of $422 million (well over analyst estimates), so there are bound to be questions about the health of the $4.3-billion deal. That's $7.16 per share – Countrywide is trading today at $6.35. "The items driving the loss...
How bad are L.A. homes prices?: Well, they're not dropping quite as much as those in San Diego, Vegas and Detroit – but that's not saying much. The widely watched S&P/Case-Shiller home-price index shows that Los Angeles prices in November were down 12 percent from a year earlier (Vegas was down 13.2 percent). "We reached another grim milestone," said Robert Shiller, chief economist at MacroMarkets LLC, pointing out that 13 of the 20 metro areas...
They're already calling it the clash of the titans. John Malone's Liberty Media is trying to seize control of Barry Diller's IAC/InterActiveCorp. Liberty, which owns a majority voting stake in IAC, filed a court action late today to remove Diller from IAC's board. Also, Liberty is trying to remove Diller as the sole director of BDTV, an entity through which Liberty owns most of its stake in IAC. Last week, IAC and Liberty sued each...
Sky Dayton, who had been CEO of the L.A.-based wireless carrier, is replaced by Wohnee Sull, who had been president and COO. Dayton becomes non-executive chairman. He released a statement saying that "Helio has reached a point in its development where I feel the timing is right for this change." Well, there might be a little more to it. Despite some growth in subscribers, the joint venture of EarthLink and Korea's SK Telecom has been...
It's taken a while - and it might not last long - but there's been a significant drop in the past two weeks. The government's latest survey shows that the average price of regular in the L.A. area is $3.112, down 9 cents from last week and 16 cents from two weeks ago. Up to now, the numbers have remained stubbornly high, despite there being lots of supply on hand and soft demand. That, of...
Will the Fed lower rates?: It's a pretty good bet - even after last week's big cut - although now the question is whether it will be a quarter- or half-percent. That brings into play the old expectation game in which only deep cuts seem good enough for Wall Street. And even those are suspect (witness last week's uneven response to the three-quarter-point cut. For now, investors seem to be sitting tight for the Fed...
The always entertaining Ben Stein has an interesting theory in the NYT about the current market uproar. Under the heading of what he calls "trader realism," Stein believes that Wall Street's downward move has less to do with fudamentals like unemployment rates and bank writedowns and more to do with traders figuring that now is a good time to sell short (that is, betting that stocks will keep going down). They have seized upon a...
You simply can’t get away from all the recession chatter. Are we in one? Are we not? How bad? How long? How hopeless? Dow Chemical CEO Andrew Liveris tells CNBC that people inevitably start to believe the worst, which of course feeds on itself and leads to empty shopping malls. Thing is, the economy is neither a basket case nor the picture of health. A significant slowdown - perhaps even a downturn - is inevitable...
There are lots and lots of business organizations in L.A., but apparently they're unable to control the agenda the way the Los Angeles County Federation of Labor controls union-related issues. At least that’s the motivation behind them forming their own umbrella group: the Los Angeles County Business Federation. Tracy Rafter, the former Daily News publisher, has been hired as executive director. It was the living wage brouhaha at LAX-area hotels that prompted the biz folks...
That's right, bolsters production. On-location shooting was up almost 13 percent last year, according to FilmLA, with much of the action taking place in the first two quarters when production was stepped up in preparation for a possible writers strike. Stepped-up production also means stepped-up earnings, which is why the economic impact of the strike is relatively muted - no matter what the two sides claim. "The strike actually had a limited downside impact on...
She's settling her $100 million lawsuit against HarperCollins parent News Corp. for undisclosed terms. Natch. But inquiring minds want to know more. So far, only Gawker has dared to put a number out there - $25 million - but you can be sure there will be other estimates ($25 million seems high). More from my blog at Lawdragon....
Say this for the former Mouse House CEO: He's not afraid to try new things, even at the risk of falling flat on his face. He's had a shaky run with that periodic interview show on CNBC that nobody has ever seen, and now he's teaming up with book publisher G.P. Putnam's Sons on a series of 50 two-minute Webisodes that will basically serve as a prequel to an upcoming thriller by Robin Cook ("Coma,"...
Too much, too fast: Did Fed Chairman Bernanke act too quickly and hastily in lowering interest rates on Tuesday? That seems to be the growing sentiment, based on mounting evidence that the economy is not in nearly as bad a shape as Wall Street would have you believe. Bernanke apparently freaked out after the global selloff on Monday and Tuesday, but now comes word that at least part of that selling related to the French...
Those woe-is-us whiners keep insisting that the writers strike will practically destroy the local economy as we know it. A piece in today's Variety cites an "industry study conducted by informed sources" that lays out a most unhappy picture. I think we're now up to $18 trillion in local economic impact. Or is it $180 trillion? Anyway, things just ain't that bad; as I noted the other day, December's employment report shows little noticeable impact...
C'mon, that's what the cable business channels really boil down to, right? Or, putting it another way: Young babes interviewing old farts. Jon Stewart has the video to prove it. Later in his shtick, he takes aim at Fox's Neil Cavuto, whose name - CAVUTO - actually appears bigger in his Fox background graphic than the entire map of the United States. By the way, Cavuto's takeaway from this week's market madness is that America...
Times Publisher David Hiller used his internal blog to lay out the job description for the big job. Several items seem to address the lackings of ex-Editor Jim O'Shea - stuff like needing someone who is Web savvy and who gets out of his office. Hiller supposedly has a short list that includes ME John Arthur and Innovations Editor Russ Stanton. Another name that has popped up is Associate Editor John Montorio. Hiller is supposed...
So much for one of Rupert Murdoch's early ideas for the WSJ. You might recall his interest in lifting the subscription veil on WSJ.com, figuring that more eyeballs would broaden the paper's audience and influence. More readers would mean more online ad revenue, which would offset the loss of subscription revenues. But the move turned out to be more problematic than he initially thought. He said the paper does plan more free offerings on the...
Stocks still shaky: Positive earnings at AT&T, Lockheed and Nokia seem to be helping, along with reports of a bond insurance bailout. But in the words of Roseanne Roseannadanna, it's always something - Home sales dropped 2.2 percent in December from the previous month, while the median home price fell 6 percent from a year earlier. In the first 90 minutes, the Dow has been up in the 30-60 point range. Relief for bond insurers?:...
People is the only celebrity magazine to have the young actor on its upcoming cover, the result of a production schedule that allows the book to remain open until Tuesday night (the other checkout rags go to bed on Mondays). That should provide huge newsstand sales (Us Weekly will take it on the chin with a cover headlined "Secrets of the New Power Girl," even with "Hannah Montana" star Miley Cyrus). From Ad Age: Celebrity...
Mortgage rates have fallen to their lowest levels since the peak of the real estate boom in 2004. Also, mortgage refinance activity jumped for the week ended Jan. 18. This suggests that beaten-up homeowners might be prepared to apply for new mortgages in order to avoid resets from adjustable rates. Lower rates mean lower monthly payments - and that provides more spending money. Yippee!! Of course getting those loans might not be so easy, certainly...
Markets still down: The Dow was off more than 200 points in early trading, then came back quite a bit and is now down about 175 points. Bank stocks appear to be holding up the ship, though there's still not much incentive to buy - despite the Fed lowering interest rates and Washington prepping some sort of stimulus plan. (FT) Bearish signals: More and more market watchers are spotting the signs of a serious downturn...
This is a big development because it means that the guild will now focus squarely on Internet compensation, which has been at the center of the stalemate. You might recall that negotiations broke down in early December right after the media companies demanded that the writers take unionization of reality and animation shows off the table. The guild said no. But in an email to members, WGA officials said that proposals on reality and animation...
The Fed's decision to cut interest rates by three-quarters of a point is being jeered in some circles as a last-ditch effort to pander and/or appease Wall Street. But U.S. News reports that Fed Chairman Ben Bernanke is saying privately that the economic situation is far worse than what he's been letting on in public. We're told by those who've heard him that he says the first six months of this year will be "bad,"...
Shares in the Calabasas-based mortgage company are up around 7 percent today, presumably on the comments of Bank of America CEO Ken Lewis who told analysts this morning that the company still plans to purchase Countrywide, though some terms of the deal could change to reflect market conditions. Countrywide stock nosedived last week on concern that Bank of America might bail out of the $4 billion deal. If the purchase were to fall through, Countrywide...
Not that we need this kind of news on a day when the financial markets are struggling to keep it together, but new Dataquick numbers show that L.A. County had an 82.8 percent increase in default notices in the fourth quarter compared with a year earlier. Most of the loans going into default had originated between August 2005 and October 2006, the tail end of the boom (and the time when suckers were entering the...
Market coming back: After opening down more than 400 points, the Dow is recovering somewhat, with the index down only 160 points at last check. The turnaround – if you want to call it that - is no doubt being helped along by the Federal Reserve's emergency decision to slash interest rates another three-quarters of a point. It was the first time since 9/11 that the Fed made an unanticipated move on interest rates, and...
Why is this getting to be so complicated? Well, maybe it tells you something about relations between Publisher David Hiller and his now ex-editor, Jim O’Shea. Hiller tells the WSJ that O'Shea wanted his budget increased by $3 million, to $123 million. “The idea that a newsroom budget would be increased was regrettably totally unrealistic," he said. O'Shea said Hiller asked for what would amount to $7 million in reductions: $3 million in newsprint costs...
Judging by today's trading in stock index futures, Tuesday could be a very, very tough day on Wall Street. The futures contracts activity points to a 520-point opening in the Dow, the steepest drop since 2001. Keep in mind that trading today was light because of the MLK holiday, and that index futures are not always reliable gauges of what will happen during the actual trading session. But even a cockeyed optimist might consider moderate...
That's the lament of David Simon, former Baltimore Sun reporter and now executive director of HBO's "The Wire," whose Washington Post essay on the death of Watergate-era newspapering reads like it was co-written by ousted LAT Editor Jim O'Shea. The eulogy doesn't cover new ground, but it's heartfelt and true (if a little naïve). Bright and shiny we were in the late 1970s, packed into our bursting journalism schools, dog-eared paperback copies of "All the...
Editor & Publisher is quoting a source "close to Los Angeles executives" (whatever that means) as saying that Russ Stanton, the LAT's innovation editor and former biz editor, is the frontrunner to replace Jim O'Shea as editor. (Managing Editor John Arthur's name has also come up as a candidate.) The E&P story also noted from the same source that the paper faces a $35 million budget gap this year and that the paper's cash flow...
Overseas markets plunge: U.S. exchanges are closed for the MLK holiday, but trading in most Asian markets has been grim. The major indexes in Hong Kong, Shanghai and India are down by more than 5 percent during the day, while those in South Korea and Australia fell by nearly 3 percent. The deteriorating U.S. economy is worrying folks, of course, and what's really nervous-making is that even the economic stimulus proposal couldn't lift the Dow...
LAT Editor James O'Shea apparently refused to trim $4 million from the newsroom budget, leading to some sort of confrontation with Publisher David Hiller (check out news accounts on LA Observed). As they say, details are sketchy - the paper hasn't even confirmed the unattributed stories about the firing. At some point we'll hear more about relations between Hiller and O'Shea, which might help explain why this came down. There’s no indication that Tribune CEO...
The groundbreaking ceremony is being postponed for the third time, which is bound to raise questions on whether the much-ballyhooed project being developed by Related Cos. is running into financing problems. It wouldn't be surprising, given the scope of the project and the uncertain state of the commercial lending market. Related President Bill Witte offered the Downtown News a muddy explanation for the groundbreaking delay, noting that the equity portion of the financing is in...
Well, at least when it comes to their own employees. Portfolio's Jeff Bercovici says that the average Zagat employee is in a perpetual search for work - so much so that the company being up for sale might turn out to be a morale booster. The place is run by Tim and Nina Zagat, who to their credit have built a publishing empire on what started out as a few loose leaf pages of dining...
The December jobless rate in L.A. County was 5.6 percent, up from 5.3 percent the previous month and 5 percent the month before that. The L.A. numbers are still well under California's overall unemployment rate, which rose last month to 6.1 percent. The U.S. rate was 5 percent. None of these numbers is especially encouraging, but they're hardly surprising. The overall economy is slowing and so more folks will be trying to find work. It’s...
Here's another reality check for Writers Guild members: NBC Universal's 10 percent increase in fourth-quarter operating profit and 8 percent increase in revenue. Now it's true that aside from late night programming the strike wasn't having much of an impact on the October-December reporting period - scripted series were still being seen – but how do you explain NBC's ratings increase for the first 10 days of this year or the surprising success of silly...
Will writers buy into directors deal?: Writers Guild President Patric Verrone isn't saying much ("We need to assess how this impacts our members,” he told Variety), and even the bloggers are sounding circumspect. "There are some genuine gains here, some issues that need clarification and some points of grave concern that threaten to drastically undercut writers' compensation," is the early assessment on United Hollywood. The agreement appears to provide more than what the writers were...
Susan Estrich, the Fox News columnist and USC law professor, has joined the L.A. powerhouse law firm of Quinn Emanuel, which is certainly news within legal circles. But she's being beaten up today on the blogs for her email about the move to friends and colleagues. We're talking lots of friends and colleagues. Now most of us have learned to use the bcc field when sending out a mass email so recipients can't see everybody...
The tentative contract agreement with the networks and studios was just announced after six days of formal negotiations. the LAT reports that the new three-year contract offers directors "a better deal than what studios had initially offered writers, including higher royalties for online sales of their movies and TV shows." No details yet on what that means, but if the agreement is anything close to enhancing Internet compensation the writers will be under enormous pressure...
When the chairman of the Federal Reserve testifies on Capitol Hill and strongly hints of more interest rate cuts, investors normally start buying. Not today. Ben Bernanke told lawmakers that the central bank would "stand ready to take substantive additional action as needed to support growth," but there's just too much bad news - and too many signs of a recession - for Wall Street to pay attention. Instead, the Dow is down more than...
Merrill Lynch's medicine: Everybody expected a bad number, so the $9.8 billion fourth-quarter loss wasn't that much of a surprise (though scary nonetheless). It's the largest quarterly loss in the firm's 93-year-history, the result of the disastrous subprime mortgage market ($14 billion in writedowns on top of $7.9 billion in write-downs in the third quarter). Keep in mind that Merrill has been raising money from outside so that might help cushion the blow. (Bloomberg) Stimulating...
The February issue of the Conde Nast biz mag reviews Hollywood's financial winners and losers. Here's a sample of a pretty eclectic group. --Worst Bet by Private Equity: "Evan Almighty." Backed by Gun Hill Road II, a fund put together by the super-slick Ryan Kavanaugh. Cost $175 million and grossed $100.2 million. --Most Bang for the Budget: "Transformers." Paramount and DreamWorks made it for $150 million and the movie racked up $319 million. --Least Bang...
The opening night of Fox's megahit beat out the network competition by a healthy margin, but viewership was 10 percent below last year and marked the softest start in four years. Big deal? "After six years of being up every year, it’s almost like it’s a meaningless drop," Fox executive Mike Darnell tells Variety. That's a little snake-oily for my taste, though it's true that audiences for all shows, even "American Idol," eventually peak out....
A planned 78-unit condo development on the corner of Wilshire and Barrington in West L.A. is on hold until June, according to Curbed LA. Apparently the partnership group is re-capitalizing. Uh-huh. No specifics on what's happening, but don't be surprised if a bunch of other projects are held up or even killed in the next few months because lenders are reluctant to make deals - or at least the kinds of deals that will work...
High anxiety: Today, it's a profit warning from Intel and a 34 percent decline in earnings at JP Morgan. Markets were weak in Europe and sharply lower in Asia, largely in response to yesterday's bad news in the U.S. Yet the Chicago Board Options Exchange Volatility Index was up just marginally on Tuesday, suggesting that panic has yet to set in - and that’s a bearish sign. The Dow is down a bit in early...
The Pasadena-based mortgage lender is cutting its work force by more than 2,400 people, or 24 percent. Regional wholesale mortgage centers will be closed in Tampa, Philadelphia, Boston, Columbia, S.C., and Kansas City by the end of the first quarter. In an SEC filing, the company said it would take a $25 million pretax charge for severance and other expenses related to the job cuts. In an email sent to employees, CEO Michael Perry said,...
The Bev Hills real estate investor gets the up close and personal treatment in a P1 WSJ profile in which we learn that's he’s made more than half a billion dollars by betting on a subprime implosion. The bet was based on a complex real estate derivative strategy that actually had been hatched by a hedge-fund manager named John Paulson, who according to the Journal (in a separate P1 story) made $3 billion to $4...
Yep, he wore black during this morning’s presentation at Macworld in SF and introduced the stuff that had been expected - an ultra-thin laptop computer dubbed the Macbook Air and an online movie rental service for iTunes. He also reported that 4 million iPhones have been sold, which gives Apple almost 20 percent of the U.S. Smartphone market (Blackberry is at 39 percent). But apparently there were no big surprises, which is often what happens...
The December median price in L.A. County was a jaw-dropping $470,000, which is down 10.5 percent from a year earlier and tells you how much the local market has deteriorated in just the past few months. You may recall that for much of 2007 the L.A. median was holding up - even increasing - because the homes that were being sold skewed on the high side. Now even the high end isn’t helping. There just...
Citi's ugly numbers: The bank's fourth-quarter loss weighed in at close to $10 billion, the result of $17.4 billion in subprime-related write-downs. The results are pretty much what Wall Street had expected. Citi plans to cut its dividend, eliminate a bunch of jobs, and get capital infusions from wealthy foreign governments - as well as former Chairman and CEO Sandy Weill. Speaking of infusions, Merrill Lynch, another troubled Wall Street firm, is getting $6.6 billion...
What really got Wall Street is a tizzy about the economy was last month's sour employment reports, which showed a jump in the unemployment rate and job growth that had pretty much stalled. But wait a minute – the New Yorker's James Surowiecki points out that these statistics are notoriously ambiguous and not necessarily a reflection of what the economy is up to. They're hardly meaningless, as some renegade analysts would have you believe, but...
This award show one seemed to be on safe ground, but now it seems that several big-name recording artists who also have Screen Actors Guild cards - folks like Justin Timberlake and Queen Latifah - are being lobbied by the Writers Guild to not attend the Grammy ceremony on Feb. 10 or to present awards. A WGA spokesman told Ad Age's Claude Brodesser-Akner that the National Academy of Recording Arts and Sciences has not requested...
The early writeups on last night's ratings point to the abysmally low viewership for NBC's hour-long program announcing the winners, although the real story might be the fact that 5.8 million people actually had it on. Who on earth would admit to watching? The ratings experts say that most anything that gets aired by one of the networks - even a test pattern - is guaranteed at least some eyeballs. Besides, they did show a...
Will directors cut quick deal? That's the Hollywood chatter this morning after contract talks over the weekend between the Directors Guild and the studios and networks. Variety reports that the negotiations have taken on a renewed urgency - not just to cut a deal with the DGA, but to use that agreement as an entry point to jump-start talks between the writers and media companies. The latest critical date is Feb. 24, when the Academy...
Bank of America CEO Ken Lewis got a phone call in early December from Countrywide CEO Angelo Mozilo, who said he had decided to throw in the towel. That set in motion the bank's $4 billion purchase, according to the WSJ's Valerie Bauerlein and James Hagerty, with Bank of America shipping out 60 analysts to Countrywide headquarters in Calabasas (they were put up at the Four Seasons in Westlake Village). The analysts spent the next...
They'll begin formal contract talks with the studios and networks tomorrow. But they won't be starting from scratch - members of the Directors Guild and the media companies have been holding informal discussions over the past two weeks in order to lay out a framework for the negotiations. The hope is not only to expedite a deal, but to use any new contract as a template for both the Writers Guild and Screen Actors Guild...
BW media writer Jon Fine offers some advice for the new press baron - stuff like cutting more deals with Dean Singleton and Brian Tierney (“as much partnering with each—printing, distribution, you name it—as is legally possible”). He also thinks Tribune should form a huge internal advertising agency in Los Angeles for its TV, newspaper and Web site components (granted, it brings up the dreaded S-word - synergy - but without the Chicago boys messing...
This is the time of year we start hearing about profits per partner at local law firms. It's the very rough equivalent of earnings per share, a measurement of how well or poorly a firm has fared the previous year. There's all kinds of squabbling about how the number is determined - here's a good explainer - but PPP is routinely reported in the trade press and it gets lots of attention at the top-tier...
Or so says Henry Blodget writing in Silicon Valley Insider - and quite at odds with the Pollyanna forecast of media honchos like News Corp.'s Peter Chernin and CBS's Les Moonves. "Let me be very clear - we are seeing no signs of a slowdown anywhere in our business," Chernin said at Citi's big media and entertainment conference this week. Of course as Blodget explains, they wouldn't be seeing any signs of a slowdown -...
Countrywide followups: There will be lots of hand-wringing on this one, much of it centered on the wisdom of Bank of America inheriting the mortgage mess at Calabasas-based Countrywide. Also, CEO Angelo Mozilo's exit package should get plenty of play – and what about Herb Greenberg’s post on MarketWatch that the Fed was behind the deal because the rumors of a near-bankruptcy were probably true? Obviously it's not doing much to relieve the anxiety on...
Depends on which newspaper you're reading - or which compensation expert you're using. The NYT expert pegs the exit package for Countrywide CEO Angelo Mozilo at $72 million. The WSJ expert puts it at $36 million. And the LAT says that once everything is thrown in - three times base salary plus special cash payment, two pensions and accelerated payment of stock options and stock grants - you're looking at as much as $115 million....
The $4 billion all-stock deal announced this morning puts an end to the daily soap opera starring the nation's largest originator of home loans. In some ways, Bank of America is getting a great deal – the sale price amounts to $7.16 a share, which compares with a year ago when Calabasas-based Countrywide was trading in the $40s. But the stock price is at bargain-basement levels for a reason, and now the bank company inherits...
Yeah, I know - it's impossible. But former MGM vice chairman Chris McGurk thinks he's on to something. Really. He's now CEO of the upstart Overture Films, which will roll out its first feature next week, the heist comedy "Mad Money" that stars Diane Keaton, Queen Latifah and Katie Holmes. Liberty Media Chairman John Malone is bankrolling the venture, helped along with Liberty's existing assets. Liberty, you see, owns the Starz and Encore cable channels,...
Talk about a deal that's hard to turn down. You might recall that Bank of America came to Countrywide's rescue last summer with an emergency infusion of $2 billion (translated to a 16 percent stake in the company). That turned out to be little more than a Band-Aid for the beleaguered mortgage company, but now B of A can buy the whole damn company for just another $3 billion, Before the housing crisis, it would...
An agreement could be announced today, according to the indie's co-founder Harvey Weinstein, who was interviewed by the NYT. Apparently, it's a similar deal to the one worked out last week with United Artists. “We need to get people back to work,” Weinstein said, although he added that executives of the big media aren't happy with him for reaching a separate deal. Anything worked out with the Writers Guild would be superseded by any accord...
The WSJ reports that the bank is in advanced talks to acquire the struggling Calabasas-based mortgage lender. Two sources are telling the Journal that Bank of America could strike a deal very soon (though there are the usual boilerplate warnings about how things might still fall apart). The market value of Countrywide has plunged to about $3 billion, which represents about two months' profit for Bank of America. *Update: NYT M&A reporter Andrew Ross Sorkin...
It's time for tech writers to sum up the annual craziness at the Consumer Electronics Show in Las Vegas. Tech Trader's Eric Savitz offers some observations while waiting at the airport for his departing flight - starting with the widely shared view that not much happened. Well, nothing of real significance. Some other thoughts: --One constant theme: finding ways to move Internet content onto big screen televisions. But this is a delicate exercise: there were...
Break out those anti-depressants. It’s a glum news day. Deep cuts in state budget: That includes closing 48 state parks, releasing a bunch of prison inmates, and increasing car fees for the second straight year. But wait, there's more: Under the governor’s budget plan school spending would be rolled back by $3 billion, welfare payments for thousands of kids would be eliminated, and a cost-of-living increase for the elderly, blind and disabled receiving state assistance...
Pretty low, it seems. Today's close was $5.12, down 6.4 percent from yesterday's awful showing. At one point it was trading as low as $4.65 (remember a year ago when it was trading at $45?). As noted earlier today, the mortgage lender reported discouraging delinquency and foreclosure numbers for December. Tom Atteberry, a money manager at First Pacific Advisors in L.A., told Bloomberg that the company is probably looking for more capital to shore up...
It's a tentative agreement that will give union employees in the news division a 3.5 percent wage increase and a $3,700 one-time signing bonus. About 500 news writers, editors, production assistants and researchers in L.A., NY, Chicago and Washington are covered. CBS dropped its previous demand for a two-tiered workforce that would have provided lower salary increases for local radio employees, such as the folks at KNX and KFWB. They've been working under an expired...
With the networks about to launch their mid-season, strike-impaired schedules, Michael Learmonth at Silicon Alley Insider handicaps the winners and losers. Fox appears to be in the best shape and NBC the worst (so what else is new?). We keep seeing estimates of network and studio losses that seem both high and out of context. Be careful what numbers you pay attention to. --Fox: The Super Bowl and "American Idol" will help out a lot...
The annual United Van Lines tally of who is moving where finds that L.A. had more outbound traffic in 2007 than inbound - 55 percent to 45 percent. The findings were similar in OC (HT to the Register's Jon Lansner). Statewide outbounders edged inbounders, with 50.8 percent – that’s the lowest outbound percentage in five years - although you have to wonder whether the prospect of major cuts in government services might lead to a...
Countrywide's shaky December: The mortgage lender said its delinquency rate continued to climb last month - 7.2 percent of unpaid principal balances from 4.6 percent a year earlier. Meanwhile, Egan Jones, a ratings company, wrote in a report that the Calabasas-based lender is "severely challenged and might falter if it does not receive an infusion of at least $4 billion within the next couple of weeks." The company denies it's considering bankruptcy. One slight bit...
There's not much information, but THR has a short story reporting that Axium International, which is Hollywood's top payroll services firm, has shut down. Tax problems could be involved, but again there's not much to go by. Firms like Axium are responsible for providing payroll checks and benefits for lots of entertainment workers around town (they serve as a kind of facilitator for the studios and production companies). The Reporter story says employees were told...
We refer to Countrywide CEO Angelo Mozilo, who over the years has managed to say the darndest things. In early 2004, he told National Mortgage News that there should be no downpayments on mortgages. Contributing equity to purchase a home, he said, is "nonsense" (thanks to our friends at Dealbreaker for pulling up the citation). Oh, and credit requirements: Mozilo said they're too high. "The only way we can have a better society," he explained,...
Again. The Dow lost another 238 points, in part because of the concerns about Countrywide (see below), but more broadly, because of worries that the worsening economy is moving well beyond the housing and financial sectors. Ruffling everybody's feathers were the comments of AT&T CEO Randall Stephenson, who said that slower growth has led to "softness" in the home phone and Internet businesses. Specifically, he said AT&T is disconnecting more home-phone and high-speed Internet customers...
Hillary Clinton will be losing many of her fair weather show biz supporters, who appear ready to join the Barack Obama bandwagon (just in time for an Obama fundraiser next week). All reports would suggest that she’s going to be trounced tonight. As reported by the LAT's Tina Daunt: If Clinton loses in New Hampshire tonight, predicted longtime political operative turned Hollywood producer Brian Quintana, Hollywood "will defect to Barack in droves." "It is not...
The stock is getting whacked this morning - at last check down 17.5 percent, to $6.30 (it had been as low as $5.76). The reason behind the plunge is more speculation among traders that the Calabasas-based company needs more cash to stay afloat, and that tighter lending restrictions might put it over the edge. As it has in the past, Countrywide denies any substance to the Chapter 11 rumors, which seem to be originating within...
The L.A.-based defense contractor, which normally sticks to the air and sea, now wants a chance to build as many as 140,000 vehicles to replace the basic Humvee. Northrop, which can supply a lot of the high-tech gizmos it uses on its planes and ships, is teaming up with Oshkosh Truck Corp., which has experience building military trucks. Competitors will include all the usual suspects - Lockheed Martin, BAE Systems, Boeing and General Dynamics -...
KB takes big hit: The L.A.-based homebuilder reported a $772.7 million fourth-quarter loss, compared with a $50 million loss a year earlier - and way worse than what analysts had expected. KB Home also took a $514.2 million charge on the loss of deferred tax assets. The new year might not be so terrific either - the company's backlog of orders for new homes fell 40 percent during the quarter. CEO Jeffrey Mezger said last...
After hovering just below $100 a barrel last week, oil futures are coming down, closing today at $95.09. The sell-off reflects a growing belief in the financial markets that the economy is slowing down (and a slower economy means lower demand). Meanwhile, L.A. gas prices keep going up - the government's weekly survey finds that the average price of regular is $3.316, up from $3.271. Gas and oil prices can often diverge for any number...
The Hollywood Foreign Press Association will forgo the fancy-schmancy awards ceremony and instead hold what sounds like a press conference to present the winners. The network didn't have much choice, considering that most of the nominated actors would not be crossing the Writers Guild picket lines. Under the new plan, the winners will still be able to pick up their awards during the concocted press conference (the network has the nerve to describe this as...
The online traders were right on the money last week in Iowa, and for tomorrow's New Hampshire primary they've given the Illinois senator a 90 percent chance of winning. Hillary Clinton has an 8.7 percent chance, according to futures contracts at Intrade. Before Iowa, traders had only given Obama a 34 percent chance. On the Republican side, McCain has an 83 percent chance of winning, while odds on Mitt Romney stood at 17.7 percent. From...
As in L.A., no one has reliable numbers, but Crain's NY Business estimates that thousands of the area's 78,000 production workers are out of work because of the WGA walkout. That's in addition to related businesses, like caterers and prop houses. The city is feeling the work stoppage a lot more than in previous strikes because of an increase in TV location shoots (“30 Rock” and “Law & Order,” among others). What’s not examined, however,...
Don't try telling that to anyone waiting in a cab line during this week's Consumer Electronics Show. But with 30,000 new hotel rooms expected over the next five years, the Vegas tourism people figure they'll need millions of more visitors in order to maintain an occupancy rate of around 90 percent. And apparently that requires a new marketing effort. Next week, according to the WSJ, they'll introduce a campaign called "Your Vegas Is Showing" that...
More bad housing numbers: December home sales in L.A. County plunged 66 percent from a year earlier and the median price dipped 7 percent to $510,000, according to figures provided to the Business Journal. Data from the more widely followed Dataquick will be out in the next few days, but these early numbers provide a sobering preview. The median price is now $40,000 lower than it was in December 2006. By the way, Treasury Secretary...
The boxing star's investment company, Golden Boy Enterprises, had teamed up with two local developers in trying to buy the Boyle Heights property and develop it into mixed-use retail and residential. But seller Mark Weinstein said the group wanted to discuss a price reduction, plus an extension of five months in order to finance the deal. But with real estate in such bad shape, Weinstein didn't want to wait that long and run the risk...
Akre Capital Management, which reports holding a 13.4 percent stake in the retailer, wants to see a turnaround plan, including operating and financial goals, clear benchmarks and a timetable. That could include stuff like buying back shares and closing unprofitable divisions. In a letter to the board, Middleburg, Va-based Akre also wants management to be held accountable for the turnaround plan. Dum-dee-dum-dum. "We see significant potential for operating and capital improvements, but we are increasingly...
That means none of the more than 70 actors nominated for a Golden Globe, according to Screen Actors Guild President Alan Rosenberg. If true, it pretty much kills the Jan. 13 telecast on NBC, even though the network has been insisting that the show will go on. "After considerable outreach to Golden Globe actor nominees and their representatives over the past several weeks, there appears to be unanimous agreement that these actors will not cross...
No, not the weather - the stock market. The Dow took a 256-point hit as December's job numbers turned out to be even more awful than what the analysts had been expecting. In just three days of trading this year, the Dow has erased more than half its gains for all of 2007. But what's really scary is that investors don't seem all that concerned. As reported by David Gaffen at MarketBeat, the Chicago Board...
Has recession arrived?: This morning's jobs report would certainly suggest as much. December payrolls rose by a mere 18,000, way less than had been forecast and the worst showing since August 2003. Not only that, the unemployment rate rose to 5 percent from 4.7 percent in November. In other words, job growth pretty much went kaput last month (state and county numbers are due out in a couple of weeks). This will obviously have more...
The government says that two studies confirm the potential danger of anemia drugs sold by the Thousand Oaks-based company, as well as those made by Johnson & Johnson. The studies showed women with advanced breast and cervical cancer died sooner or had faster tumor growth when taking the drugs at higher-than-recommended levels. Doctors have prescribed them at those higher doses, even though the FDA doesn't approve. You might recall that based on earlier studies the...
Traders who dabble in the political prediction markets (yes, there is such an animal) are betting that it'll be Obama and Huckabee winning tonight in Iowa. Obama was pegged as having a 46.2 percent chance, compared with 32.9 percent for Clinton and 21 percent for Edwards. Huckabee was trouncing Romney. Here's a Reuters piece that explains how this works: Traders on the Dublin-based Intrade prediction market can buy and sell contracts based on which party...
The nifty Netflix deal with Korea's LG Electronics to bring online video to your TV screen is getting a bunch of attention. The idea is to market an LG-branded wireless device beginning later this year that will allow movies to be delivered over the Internet instead of via clumsy on-demand systems that have never really caught on. Dan Frommer at Silicon Alley Insider has several key questions about the set-top box, such as cost (he...
It's only the first night, but the "Tonight Show" bested the "Late Show" by a bunch - 5.8 million viewers vs. 4.7 million, based on the initial Nielsen numbers. It's not that big a surprise - Leno has led Letterman for years - but now comes the day-to-day grind that Leno must handle without benefit of writers. There's also the matter of Leno's monologue, which was obviously written and seems to break the WGA's strike...
Markets still shaky:: The Dow is up around 70 points and oil is trading at $99 and change, although at this point it's only a matter of time before we see crude closing at over $100 a barrel. Look out later today for December car sales, which are likely to be weak – and further evidence of an economy that’s slowing down. Tomorrow is a potentially big story: Release of December employment data, which could...
"Nice to be with you, rabbi,” Robin Williams tells Dave during his appearance on tonight's "Late Show." As reported by the NYT, Letterman has grown a thick gray beard in the eight weeks since he's been off the air as a result of the writers strike. His production company worked out a side deal with the WGA that allows him to bring back his writers, and on the first show he apparently was making the...
When Sung Won Sohn took over as head of L.A.-based Hanmi Financial two years ago, the stock was trading at $18. It's now at $8.20, just a penny above its 52-week low. That's not entirely his fault, of course, but it's not a sterling performance either. So Sohn's resignation last week didn't come as a huge surprise for those following the world of Korean American banks. What might be a bit surprising are the terms...
All commodity prices are up today, as the dollar keeps slumping and investors start to worry about inflation. The $100-a-barrel oil price apparently was brief (only a few trades, according to the wires), but also telling. There's just too much to worry about: a drop in gasoline inventories, possible violence in Nigeria, possible violence in Pakistan, etc. Stocks are also way down after an index of U.S. manufacturing activity fell in November, well below economists'...
Happy New Year! Here's wishing everyone a healthy and fulfilling 2008. Bad start for economy: The Dow is already down more than 170 points this morning as a new report shows that factory activity unexpectedly contracted in December to its weakest level since April 2003. This will be a busy week for economic reports, but the one to really watch comes out at 5:30 a.m. on Friday. That's when the government issues its job report...
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
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