Shaky world markets: Europe is worried about higher interest rates, Asia is worried about China increasing its bank reserves, and there's always the price of oil, which is up a bit this morning. “The mood has changed quite dramatically in the last two or three weeks,” analyst Roger Cursley told the NYT. “Central banks are focusing on inflation, and seemingly they have put worries about the effects of the credit crisis behind them.”
iPhone for the masses: Apple's new iPhone 3G will sell for $199 or $299, depending on the amount of memory you want. That's quite a savings over earlier iPhones, but you'll also have to spend more on AT&T service fees - $30 a month for the unlimited data plan, up from $20. The increase will help AT&T start recouping the money it's been shelling out for the iPhone. It also means that the iPhone will be priced in line with devices like the Treo and BlackBerry Curve. (WSJ, NYT)
SAG rallies against AFTRA: Several hundred folks gathered outside the Wilshire Boulevard headquarters of the Screen Actors Guild to urge members of the smaller AFTRA union to reject a tentative deal reached with the media companies. About 40,000 of AFTRA's members also belong to SAG. The problem, in a nutshell, is that SAG believes the AFTRA deal is too soft and threatens to gum up its own contract talks. Variety's Dave McNary reports that "the tenor of the comments during the morning rally raised the specter of SAG leadership moving into strike-prep mode." Here's more from the NYT's Michael Cieply:
Uncertainty over SAG’s intentions has already assured what many have called a “de facto strike” beginning in late June, because studios have avoided scheduling movie shoots that would be disrupted by a guild decision to walk out. The guild has not conducted a strike authorization vote, and could instruct members to keep working under terms of its old contract even if a new deal is not reached by month’s end.
Upfront success: The five major broadcasters should bring in nearly $9.2 billion in prime-time ad business, about the same as last year. While more inventory had to be sold upfront to maintain that level, the numbers could have been far worse. From the LAT:
The networks just closed the books on the weakest season in memory. There were no break-out hits, and the writers strike forced the networks to air reruns, chasing viewers away. The 100-day strike also disrupted program development, so advertisers opened their purse strings even though in many cases they haven't yet seen the new shows. Only last month, some Wall Street analysts predicted that the so-called upfront market -- when TV networks sell the bulk of their commercial time -- could be off as much as 14% versus 2007.
Death benefits: Never mind bonuses or stock options. The really big money in executive compensation is the posthumous kind. A WSJ survey found dozens of companies offering stupendously high death-benefit packages to their top executives. Near the top of the list is Occidental CEO Ray Irani, who would get immediate vesting of all of his options, restricted stock and performance-related awards if he died on the job. That’s worth $101.9 million as of Dec. 31. Not that Irani needs the money - he's earned more than $700 million from L.A.-based Oxy since 1992.
Death benefits, sometimes called golden coffins, have been around for years, but until recently the amounts were often impossible to determine or were shrouded in the fog of proxy-statement language. A federal rule change 18 months ago required companies to be clearer about what they're obliged to pay if top executives end their employment, under various circumstances. A death of a CEO or chairman often is a traumatic event, both for the family and for the suddenly leaderless company. But compensation critics say that's no reason to lose sight of the pay-for-performance principle that many boards now espouse. And they call death benefits the ultimate in pay that isn't based on performance. Companies defend the practice as an appropriate way to take care of an executive's family after an unexpected death.
Magazine mess: The LAT just can't seem to stay out of the NYT. The latest embarrassment is over plans to transfer control of its monthly magazine from the newsroom to the business side - especially embarrassing because of the Staples Center scandal back in the 1990s. LAO has a post from last night. Here's the NYT piece.
U.S. News goes biweekly: It's another regrettable sign of the times. The shift to every other week publication begins next year and is part of a broader move to the Web. "The advertising climate for weekly magazines is bleak," U.S. News Editor Brian Kelly told the WSJ. U.S. News's ad pages for the first quarter were down 34.8 percent compared with the same period last year.
Lacter on radio: This morning's business chat with KPCC's Steve Julian covers the dropoff in passenger traffic at the airports and the state's water shortage. Also available at kpcc.org or on podcast.