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November 11, 2013

How does Stanford compete with the big boys?

stanford.jpgCertainly not through ticket sales. With a stadium that only seats 50,000, about half that of venues in the SEC and Big Ten conferences, the school's football program generated just $9.7 million in 2012. Ohio State picked up $41 million. In merchandise sales, another key revenue source, Stanford ranked 42nd this year, behind lowly Texas Tech. Yet Stanford, which plays USC at the Coliseum on Saturday night, is ranked fourth in this week's BCS standings, an impressive showing for a school that's focused on quality education. How can that happen? From the WSJ:

The way Stanford keeps up in the college-football arms race is to lean on private donations. As a result, almost everything the football program touches is endowed, from each of the school's 85 football scholarships to David Shaw's head-coaching position. Stanford's offensive coordinator is even known as the Andrew Luck Director of Offense in honor of an anonymous gift in 2012. "Many have looked at Stanford to say: 'How can we make that happen at our place?'" said Stanford athletic director Bernard Muir. Given that Stanford sits in the heart of Silicon Valley, and many of its graduates are making untold millions, it seems like fundraising should be easy. But most football donors are well past 50, and younger donors can be hard to find, since football was mostly an afterthought on campus until recently. In its attempt to build a football program this way, though, Stanford does benefit from a specialized network of benefactors most schools can only dream about.

August 16, 2013

Another weekend without CBS for TWC customers

kcal.jpgA funny thing happened to the impasse between the cable company and the broadcast network: After two weeks of Time Warner Cable blacking out CBS-owned channels 2 and 9, neither side seems to be hurting all that much. CBS's "Big Brother" was the most-watched show Thursday night, despite not being available in much of L.A. and NY, while Time Warner Cable has not experienced a stampede of cancellations. That means neither player has much leverage over the other (see how much good all that pre-blackout campaigning did?) The biggest losers so far are Dodger fans subscribing to TWC who won't be able to watch Saturday's game against the Phillies or all four games next week against the Marlins in Miami. Analysts are not sounding optimistic about a settlement for at least the next couple of weeks, though in truth a breakthrough might happen at any point. From Businessweek:

True leverage to end the fight may come from the likes of Peyton Manning, Frank Gore, and Victor Cruz--the NFL's first Sunday games are Sept. 8. (That night's Dallas Cowboys-NY Giants game is on NBC.) "If it goes to football season, I think Congress will definitely get involved," says Brian Frederick, a Washington-based spokesman for the American Television Alliance, a coalition of pay-TV companies battling broadcasters over higher retransmission fees. The alliance says that 79 U.S. media markets have been subject to programming blackouts so far in 2013, continuing the trend of three consecutive years of increasing disputes over retransmission fees.

From the WSJ:

The Federal Communications Commission has remained on the sidelines, and experts said it was unlikely the agency would step in to order a restoration of carriage, given what the agency itself has said is its limited authority in such matters. After the last such major standoff, a two-week dispute in 2010 between the Fox network, now owned by 21st Century Fox Inc. and Cablevision Systems Corp., the FCC said it would study whether it could better protect consumers during such disputes. (Until June, 21st Century Fox was part of the same company as Wall Street Journal owner News Corp.) But in a policy proposal in 2011 inviting comment from industry on the topic, the FCC acknowledged the limits of its jurisdiction. "We do not believe that we have authority" to require carriage or mandatory binding arbitration proceedings, the agency said.

August 12, 2013

Now I know why Time Warner Cable spends so much for sports

pga.jpgI spent a good portion of my weekend trying to receive live streaming of the PGA championship - and let me tell you it wasn't easy. The first problem was finding the feed - CBS Sports.com was surprisingly difficult to access - and once I was there the picture was blurred and the action choppy (when the streaming didn't freeze altogether). My Internet speed on Verizon, while not super-speedy, manages to get the job done for other shows, although perhaps live streaming requires faster speeds. Whatever the cause, it was a lousy way to watch a sporting event, and there's no way I would have stayed with it were the PGA not been one of the four major golf tournaments. Truth is, sports does not work very well online - except to just check on scores (and even that's iffy). This might explain why the sports content providers, whether it's ESPN or the teams themselves, are still cutting rich deals with distributors. Meanwhile negotiations between Time Warner Cable and CBS are ongoing, though there's no sign of an end to the dispute that has kept TWC customers without CBS show for 10 days.

August 1, 2013

Fox Sports 1 almost ready in its L.A. digs

foxsports1.jpgThe new sports channel, which debuts Aug. 17, will have as its anchor a 14,000-square-foot soundstage on the 21st Century Fox lot off Pico Boulevard, not far from the studio where the NFL pregame shows are aired. Staffing has been limited so far - nothing like ESPN, which is based in Bristol, Conn. and has more than 6,000 people - but already there's talk about a Fox Sports 2 channel being prepped. In the early days, look for lots of Nascar, soccer and UFC, along with the debut of several talk/interview type shows. Football audiences will be arriving next month. They say that the vibe will be less stat-and-analysis-minded than ESPN, with a lot of "Fox attitude" (uh-oh). But the bigger issue is whether the world really needs another sports channel. In Southern California alone, you have Time Warner Cable, which carries the Lakers (and the Dodgers beginning next season), plus Fox Sports West and Prime Ticket (Angels, Clippers, Kings, and Ducks), plus the Pac-12 Network, plus separate channels for golf, tennis, hockey, baseball, football. Point is, sports represents the most expensive programming for cable companies and considering that only a certain percentage of the customer base is watching, you have to wonder how this plays out over the long term. From this week's Business Update on KPCC:

Mark Lacter: It's called Fox Sports 1, it debuts Aug. 17, and it'll be coming to you right off Pico Boulevard at the 21st Century Fox lot (note the change from 20th Century Fox - the new name is part of the restructuring at Rupert Murdoch's News Corp. that has all the broadcast and entertainment assets split off from the newspaper assets). Anyway, they've built a 14,000-square-foot sound stage for Fox Sports 1, where the new network will originate - not far from the studio where the NFL pregame shows are aired.


Steve Julian: Serious competition for ESPN?

Lacter: Well, that's what they're hoping. But ESPN is massive - it makes up about 40 percent of the value of the entire Walt Disney Co., in part because it charges cable operators about $5 per subscriber per month, which tops any other content provider by a long shot. Fox obviously wants some of that action, and Fox has the rights to lots of sports, mostly baseball and football. Now Steve, I know this doesn't apply to you, but the question is whether there's a limit to the amount of sports programming people will want to watch. Guess we'll find out.


June 3, 2013

ABC honchos must be praying for a Heat win tonight

spurs.jpgNot that a Pacers victory in Game 7 wouldn't be a great sports story. It's just that a Spurs-Pacers match-up in the NBA Finals would likely produce one of the lowest-rated series in recent years. As it is, San Antonio is never much of a draw, not only because it's the 30th largest media market (Indianapolis is 41st), but because the Spurs, to their credit, have never been much for drama off the court. Besides, not having LeBron James is certain to depress ratings. From Slate's Matthew Yglesias:

ABC started airing the NBA Finals in 2002. Since that time, the San Antonio Spurs have made three NBA Finals appearances--the lowest-rated ABC Finals in 2007, the second-lowest-rated ABC Finals in 2003, and the third-lowest-rated ABC Finals in 2005. By contrast, ABC's three best NBA Finals have all featured the Los Angeles Lakers. So the decline of the Lakers and the resurgence of the Spurs looks like an economic disaster for the network. But the three highest-rated non-Lakers finals have all featured--you guessed it--the Miami Heat.

May 29, 2013

How does the Dodgers' poor start affect business?

dodgers4.jpgIt really doesn't, certainly not over the short-term, given the goodwill generated because none of the new owners are named McCourt. Sports franchises are not like traditional businesses in that their revenue streams are established well in advance of day-today performance. So teams like the Astros and Marlins can keep losing and their owners will still share revenue from other franchises, an arrangement that owners of big-market, big-value teams have to accept. The Dodgers, meanwhile, enjoy predictable revenue streams from TV rights and season ticket sales. Having a poor season might eat into operating income on the edges, but the team's brand is so secure in L.A. that it would take a multiyear plunge for the basic valuation to change appreciably. Even so, the first two months of the season can't be fun for the new owners. From this week's Business Update on KPCC:

Mark Lacter: Deal-making is never a sure thing - Rupert Murdoch certainly discovered that when he bought MySpace in 2005, and then the social media site took a nosedive because of a little outfit called Facebook. There also was the disastrous purchase of AOL by Time Warner, and the even more disastrous purchase of Countrywide Financial by Bank of America.


Steve Julian: Now, to be fair to the Dodgers, it's still early - sort of.

Lacter: Sort of - not just for the season, but for the ownership. And, let's not forget the huge number of injuries the team has faced. Of course, to succeed longer-term (and this is true for any business), you need more than a few breaks - the folks who follow this stuff say the real answer is to develop a strong farm system (as the Dodgers used to have), but that could take several years, and that's not fast enough for the fans who have been without a World Series championship for 25 years. So, for now, they're trying to become competitive by signing the most talented players they can get their hands on. The strategy makes sense, except that it doesn't seem to be working out very well. Money always helps, but it's never enough.

Julian: Let's keep things in perspective: this is just one season. Does it really affect the owners?

Lacter: Frankly, not much. The Dodgers remain an extremely valuable franchise, even if it turns out that the new owners overpaid a little. That's because the purchase has been predicated on the massive amount of money available from television rights - we're talking $7 billion over the next 25 years. Those are the basic terms of a partnership deal between the Dodgers and Time Warner Cable that would go a long way towards recouping what the owners paid for the team. The Dodgers will effectively own the channel carrying the games - that's as of next season. Time Warner Cable figures it won't have to keep renegotiating TV rights deals with the Dodgers every few years, which has been a real problem because the teams keep demanding more money.

April 23, 2013

Is Dodger season cursed already?

chad.jpgLatest bit of bad news: Starter Chad Billingsley will undergo Tommy John elbow surgery and is out through the start of next season. That's on top of Zack Greinke breaking his collarbone after a run-in with Padres outfielder Carlos Quentin, and Chris Capuano straining his calf (he had been subbing for Greinke). At least Ted Lilly is scheduled to make his first start in nearly a year on Wednesday, but who knows how effective he'll be after shoulder surgery. Even Clayton Kershaw isn't showing his normally strong stuff. As if all that's not enough the club can't seem to score very many runs, which won't get you very far when your pitching staff is in tatters. Yes, it's a long season and yes the Dodgers have a loyal fan base, but this can't be what the new owners had in mind when they shelled out $2 billion+ to buy the team last year - and then went on to assemble the second-priciest payroll in baseball. A cautionary tale for rich guys thirsting to buy a professional sports franchise. Keep smiling Magic.

April 17, 2013

Watching tonight's Lakers game, it's best to keep your eye on the ball

kobe.jpgThe ball being the future of the franchise, which is basically entering a transitional, post-Kobe stage - and that's regardless of who wins tonight's pivotal game against Houston to determine whether the season gets extended. Chances are the Lakers will squeak into the playoffs and should that happen, it's even possible (although highly unlikely) that the team can advance to the second round. At some point, however, the front office will be adjusting to life without Kobe Bryant - or at least the Kobe Bryant we have come to expect all these years. And as I point out in this week's Business Update on KPCC, that has all sorts of business ramifications.

Mark Lacter: Even before Kobe's injury no one was expecting the team to get very far. That means a probable drop in ratings - not unlike what happens during golf telecasts when Tiger Woods isn't playing. As it stands, having San Antonio and Oklahoma City at the top of the NBA Western Division can't be great news for ESPN and TNT, which will televise the playoffs. San Antonio is the 37th largest media market and Oklahoma City is the 45th.


Tess Vigeland: But, what about the Clippers?

Lacter: Yeah, what about the Clippers? Clearly, the ratings are up sharply this season, and if the team advances deep into the playoffs, the numbers will probably jump further. Actually, this is a great opportunity for the Clippers to pick up more fans for next year. But, keep in mind that the Lakers, for all their troubles, remain a hugely successful franchise. Forbes values the team at $1 billion - second only to the New York Knicks and way higher than the Clippers. The value of sports franchises go beyond won-lost records. A big part of it is location (which explains why New York and L.A. are the top two teams), but another important part of it is branding.

Vigeland: So even though the Lakers are in a rough patch, they are the Lakers...

Lacter: ...right, which means TV ratings will be strong no matter what and attendance will be high no matter what. There's even an argument that with Kobe in the tail end of his career the Lakers should consider putting him on waivers. Doing that would save around $80 million, which could be used for a young player. Now, team officials have downplayed that possibility, but at some point there will be some a rebuilding effort - and that becomes a financial and marketing issue, as well.

From ESPN's J.A. Adande:

Bryant's injury provides safe cover for [coach Mike] D'Antoni, who has been under fire from Lakers fans all season. The Lakers want to do everything possible to avoid paying both him and Mike Brown to not coach the team next season. The ability to say D'Antoni didn't have Bryant for the most important games of the season gives them their excuse. Meanwhile, Bryant has a chance to have a triumphant final act of his career, even if he doesn't win another championship. If he can return from this injury at age 35 and play something close to a full season at an All-Star level it will only add to the myth-making. He already has more sympathy than at any point of the past dozen seasons of his polarizing career. I can't tell you how many online posts I read from self-professed Kobe haters who said they hated to see him go down like that. Everyone will be rooting for him to come back with a vengeance.

March 20, 2013

Want clarity on the NFL's return to LA? Lots of luck

leiweke2.jpgTime for Commissioner Roger Goodell's periodic non-statement about getting a team back in town. At least this one came with a prop: Denver billionaire Philip Anschutz, who will take over the NFL-in-L.A. staring contest now that Tim Leiweke is out of the picture. Here's what Goodell said at the owners' meeting in Phoenix:

I think it is a positive that Phil Anschutz is reengaging. He seems that he would like to get a stadium built in Los Angeles that would be suitable for an NFL team. We look forward to working on that. As you know because of the sales process, that's probably crippled any discussions for several months, but we look forward to reengaging with them and see if we can get something done.

Reengaging? Does that mean he was unengaged while Leiweke cut a billion-dollar-plus deal with the city? Sorta hard to believe. Frankly, anything Goodell says about L.A. is hard to believe. From this week's Business Update on KPCC:

Steve Julian: People interested in the NFL may well be wondering whether the league will provide any clarity on an L.A. team at an upcoming owners meeting. Mark Lacter, you're a business analyst, what do you think?


Mark Lacter: Are you serious, Steve? Has the league ever provided clarity on bringing pro football back to L.A.? And now that Tim Leiweke is no longer chief executive of AEG - he, of course, had been the major dealmaker and cheerleader for getting an NFL team - the prospects are a lot less clear. The big question is whether Leiweke's old boss, the Denver billionaire Philip Anschutz, is willing to cut a deal with the league by building a new downtown stadium. Frankly, it's doubtful. However things go, it would seem to be time for city officials to move on. They've been playing footsie with the NFL owners for years - and so far, it's amounted to a big fat zero. Actually, it's been worse than zero, considering the time and energy that's been spent working on various development ideas.

Julian: There are some good reasons for having an NFL team here.

Lacter: No question, but the city has survived without a team for almost 20 years. It'll have a much harder time surviving a seriously high jobless rate, a troubled education system, terrible traffic and - of course - a chronic budget shortfall. So, maybe the focus should be on those issues instead of whether Philip Anschutz likes pro football (apparently he doesn't, by the way). They also might want to focus less on remaking the Convention Center, which AEG had agreed to finance as part of the stadium project.

March 18, 2013

Leiweke on Anschutz: Not much of a football guy

anschutz2.jpgMore pointedly, the ex-CEO of Anschutz Entertainment Group told New Yorker writer Connie Bruck last year that the Denver billionaire "is not a man who has dreamed all his life of owning a football team." Anschutz, in fact, had to be dragged into the deal for a downtown stadium. That makes his comments last week about wanting to work with the NFL a little suspect. Not that it won't happen - I just wouldn't want to make any big wagers. Actually, the Bruck piece, which ran in January 2012, is worth a second look, if only to be reminded about Anschutz and his leanings. Some snippets:

Anschutz has been a frequent contributor to the National Right to Work Legal Defense Foundation, which provides legal aid to employees opposing "compulsory unionism," and he has been a major supporter of Wisconsin Governor Scott Walker, in his fight against a recall, after his efforts, last February, to eliminate many collective-bargaining rights. Anschutz has been a guest at the twice-a-year political gatherings of David and Charles Koch, the secretive anti-government oil billionaires. He has contributed to Americans for Prosperity, backed by the Koch brothers, which lobbies against global-warming science and for reducing regulation of the oil and gas industry.

[CUT]

I asked Leiweke how Anschutz felt about A.E.G.'s affiliation with the Clinton Global Initiative. "Phil thinks I'm essentially nuts," he said. "Phil says to me, 'You know, Tim' "--he imitated Anschutz's sonorous way of speaking--"and I'm like, 'Stop! The governor's Democratic, speaker's Democratic, senate pro tem leader's Democratic, treasurer's Democratic, lieutenant governor's Democratic, mayor's Democratic, one person on the City Council is a Republican. Phil, has it occurred to you yet that . . . California is the bluest state in the Union?' I get along well with Democrats, I get along equally well with Republicans," he said, adding that he has a good relationship with House Speaker John Boehner. (They share a propensity for tearing up during speeches.) But Leiweke is careful not to antagonize local Democrats.

[CUT]

Leiweke explained how he had persuaded his football-averse boss to come this far: "You'll have a seventy-thousand-seat football stadium, a twenty-thousand-seat arena, a seven-thousand-seat theatre, a two-thousand-three-hundred-seat music club, a fourteen-screen cinema. You'll probably have five thousand hotel rooms right next to the campus by the time we're done here, twenty-four restaurants, night clubs, bars, and bowling alleys, the Grammy Museum, and public space for festivals and parties. And then you'll have a convention center next door. If you're the Super Bowl, if you're the N.B.A. or N.H.L. All-Star game, if you are ultimately anyone that wants to be big and important, it will be a hundred-acre campus and the only one of its kind." He paused for breath. "There's nothing like it in the world."

March 15, 2013

Getting back to reality on Convention Center

convention.jpgAssuming that the AEG-financed makeover of the Convention Center doesn't happen because the AEG-financed football stadium will never be built, City Councilwoman Jan Perry wants to explore alternatives. Good idea - connecting a Convention Center re-do with the proposed Farmers Field was more of a hasty add-on to assuage concerns about what the city would be getting out of the stadium deal. Now it's time to adjust priorities, especially with Tim Leiweke gone as AEG's CEO, and especially with the AEG agreement expiring next year. From Perry's press release:

Councilwoman Jan Perry will introduce a motion next Tuesday that directs City staff to report back to the Ad Hoc Stadium and Convention Center Modernization Committee on alternative plans for the modernization of the Convention Center. The motion will ask the staff to explore potential ways to upgrade the current Los Angeles Convention Center without an NFL stadium. The current agreement with AEG is contingent upon bringing NFL to Los Angeles and will expire next year. Councilwoman Perry will ask that the City formulate alternatives to reach its goal of transforming the current convention space into a world-class center that would be competitive with leading convention centers across the nation.

Perry adds that "we need to have a plan in place with or without an NFL team." That's not an outright acknowledgement that the downtown stadium is history, but coming from the lead cheerleader in this miscalculated deal it's pretty close. Mayor Villaraigosa has said much the same thing:

Now that AEG is no longer for sale and they have indicated that bringing an NFL team to LA remains a priority, I call on AEG to live up to its commitment by immediately sitting down with the NFL to reach an agreement. However, the City will not wait for AEG, or any other party, to move ahead with the needed improvements to make our convention center a premier destination for meetings and conventions. Last year, we saw a record number of visitors come to Los Angeles and those visitors help drive our economy, fill our hotel rooms and take advantage of the numerous sports and entertainment options that we offer.

March 14, 2013

Shocker! Anschutz meets the press (relax, he didn't say much)

anschutz2.jpgIn a conference call this afternoon, the man who never talks with reporters elaborated a bit on his decision to pull AEG from the market. Anschutz said he was concerned about the "noise" being created concerning the company's value (perhaps another way of saying he wasn't getting what he thought AEG was worth). The highest offer, according to several news reports, was around $7 billion - $3 billion short of the ballpark number Anschutz was said to be initially looking for. Anschutz didn't talk numbers during the conference call, but he did say, "I have always said to anyone who cares to listen that this sale would be premised on a combination of things: the right price, the right buyer, the right terms." As for CEO Tim Leiweke's departure, Anschutz said the decision was by "mutual agreement" (the WSJ, citing sources, says disagreements between the two caused the sales process to founder). One obvious problem: Anschutz wanted to sell AEG as a whole instead of in pieces and that meant potential buyers having to value many different enterprises, some faring better than others. But beyond that, he was not desperate to unload the properties, especially since his other assets are starting to rebound. And unlike the CEO of a publicly traded company, Anschutz is not beholden to a board or group of shareholders. In other words, he can do whatever the hell he wants. From Billboard:

Had they chosen to break the company up, which apparently was never on the table, the story would likely be different. Some investors were most interested in AEG Live, which is in its best year ever with tours by Bon Jovi, Taylor Swift, Kenny Chesney and others. But touring is cyclical based on who's touring and tricky pricing, as opposed to the more consistent hard value of top-shelf arenas and the sports tenants that inhabit them. AEG's real estate assets drive the model that Leiweke steered, and that is where the most value and upside lies. AEG arenas alone are estimated to be worth more than $5 billion in today's market, and AEG either owns these venues outright or has long-term operating leases in place in high-profile markets around the world. The entire venue portfolio of arenas, theaters, stadiums and clubs on five continents exceeds 100 buildings, with 42 million fans visiting annually, according to AEG.

Curtains for downtown football stadium?*

farmers5.jpgIt's over, writes LAT football writer Sam Farmer, who says that the unexpected departure of AEG CEO Tim Leiweke pretty much dooms any chance that the stadium will get built. It was Leiweke who pushed the idea and who had to persuade his boss, Philip Anschutz, that the project was worth financing. But Anschutz has insisted that AEG retain revenue streams like suite sales and parking, and the league, which likes its owners to be in control, said that was a non-starter. Leiweke was the presumed middleman in the standoff, but with him gone it's hard to see how the proposal moves forward. Earlier this month, Yahoo Sports, citing sources, reported that the stadium deal was essentially dead, because as one NFL official said, "the numbers just don't work." Shoehorning the facility between the Convention Center and Staples Center always had been considered a tough sell, but Leiweke proved to be a master salesman in the development of L.A. Live, the Nokia Theater, and the JW Marriott hotel and condo complex. So he was given the benefit of the doubt on a lot of stuff. Leiweke became hugely influential in L.A. politics - so much so that the City Council and Mayor Villaraigosa could barely contain their credulous glee at the prospect of having AEG bankroll the stadium and convention center redo (happy to ignore the longer-term financial concerns). Today, those same city officials are sounding as if they've been smacked with two-by-fours. Councilwoman Jan Perry, who was uncomfortably tight with Leiweke, actually called the decision to call off the sale of AEG a good thing - and indeed today's press release noted that development of Farmers Field was still a priority for AEG. Maybe it is - so long as Anschutz gets what he wants. But the truth is the NFL doesn't need Los Angeles and might not even want Los Angeles - certainly not when the stadium owner wants to run the show. Is the stadium dead? Not completely, but Perry and the others must be hallucinating if they think this is good news.

*Update: The LAT snagged a rare interview with Anschutz (damage control, no doubt), who said that he's still interested in bringing the NFL back to L.A., though he notes that "we won't be pushed into a deal."

"We're not going to make the NFL happen by ourselves," the 72-year-old AEG chairman said. "The NFL is a player here. They have to decide what they want to do. "We're open for business to do a deal. It's not rocket science.... We'll do a reasonable deal, but we won't be pushed into a deal."

Breaking: Anschutz terminates AEG sale, Leiweke leaves

AEG2.jpgThe sports and entertainment empire has been taken off the market, the company announced. But the real shocker is the sudden resignation of CEO Tim Leiweke. How and why this happened will have to be sorted out, but it's been Leiweke who shaped AEG into a mega-billion dollar force - and who has played a major role in reshaping downtown L.A., with Staples Center, the Nokia Theater, L.A. Live, and most recently, efforts at a downtown football stadium. Let's also not forget his role with the Kings and Galaxy. His lukewarm sendoff in the press release - "We appreciate the role Tim has played in the development of AEG, and thank him for the many contributions he has made to the company" - makes you wonder what really went down. It's hard to believe that this guy will quietly go away. He's only 55 and has been a tenacious lieutenant for Anschutz. That's why this announcement is so unexpected. As for AEG, Anschutz's decision to pull it off the market isn't entirely surprising. Offers were coming in well below what he had been looking for - around $10 billion by several news accounts. The company had been tough to value because of its assets are in so many different businesses (and some are performing a lot better than others). The proposed stadium has been another imponderable. And speaking of the stadium, today's news could seriously derail AEG's plans, considering that Anschutz - at least according to Leiweke - had to be pushed hard into making the commitment. Would be interesting to see if AEG has any escape clause on its agreement with the city. Here's the press release:

The Anschutz Company announced today that it will retain ownership of Anschutz Entertainment Group, Inc. and terminate the sales process for AEG.

Philip F. Anschutz, as Chairman of AEG, will resume a more active role in the Company, with a particular focus on the Company's world-wide strategy and operations. Dan Beckerman will assume the position of President and Chief Executive Officer of the Company. Mr. Beckerman joined AEG over 15 years ago and previously served as the Chief Financial Officer and Chief Operating Officer.

Tim Leiweke, who has served as President and Chief Executive Officer of AEG since 1996, will be leaving the Company by mutual agreement. "We appreciate the role Tim has played in the development of AEG, and thank him for the many contributions he has made to the Company. We wish him well in his new endeavors," said Mr. Anschutz.

Ted Fikre, who joined the Company in 1997, will become Vice Chairman of the Company and continue as AEG's Chief Legal and Development Officer, as well as assume responsibility for AEG's Governmental and Media Relations. Jay Marciano, currently President and Chief Executive Officer of AEG Europe, will relocate from London to Los Angeles to assume the role of Chief Operating Officer. Todd Goldstein, who has been with the Company since 2001, recently was elevated to Chief Revenue Officer and will continue in that role. Steven Cohen, Executive Vice President of the Anschutz Company, will serve as AEG's Chief Strategic Officer while retaining his role at AEG's parent company.

Mr. Beckerman, Mr. Fikre, Mr. Marciano, Mr. Goldstein and Mr. Cohen, together with Mr. Anschutz, will constitute AEG's Office of the Chairman.

"From the very beginning of the sales process, we have made it clear to our employees and partners throughout the world that unless the right buyer came forward with a transaction on acceptable terms we would not sell the Company," said Mr. Anschutz, Chairman and Chief Executive Officer of the Anschutz Company. "From the very first days of AEG, my vision has been to tie together world class real estate development structured around entertainment venues with premium sports and live entertainment content. In recent years we have developed related businesses to further promote and enhance the performance of AEG's facilities for the benefit of our partners, including our sponsors, artists, consumers and the communities in which we operate. The Company's operations will continue to be run by AEG's experienced senior executive team, most of whom have been with AEG for over a decade. We will continue to set the standards in the industries in which AEG operates, bringing our unique vision and development model to entertainment locations throughout the world."

"Phil's active reengagement in the operations of the Company has brought a renewed spirit and passion to the management team's focus on AEG's next steps" noted Dan Beckerman. "The Company has a number of interesting business opportunities, and the expertise of the management team and our 26,000 employees around the world will allow us to select those prospects that best enhance the Company's performance. Priority projects going forward include the development of Farmers Field adjacent to our L.A. Live campus and the pursuit of our plan to bring the NFL back to Los Angeles, our recently announced initiative to collaborate with MGM to build a new arena in Las Vegas, the acquisition of ownership stakes and the associated refurbishment of several major global arenas in Europe and our ongoing investment in AXS.com, our ticketing and e-commerce platform, as we expand its capabilities for the benefit of our venues, partners, performers and consumer end-users."

*Updated post

March 7, 2013

Dodger deal with Time Warner Cable has yet to be submitted to MLB

dodgers2.jpgThat's probably due to continuing questions about how much of the money will be handed over to the league as part of the revenue-sharing arrangement with other teams. This could turn out to be an important snag in the 25-year $7-billion TV deal because the team's new owners, led by the investment firm Guggenheim Partners, are counting on much of that $7 billion to bankroll team operations and finance the purchase. It's all quite intricate, but in a nutshell, teams are obliged to share 34 percent of net local revenue with the other teams. But what exactly does that mean in the case of the Dodgers, which has an unusual arrangement with Time Warner Cable? From ESPN:

When a team brokers a local television deal with a regional sports network with which it has no ownership stake, the calculation is easy: The entire rights fee is subject to revenue sharing. Under the Dodgers' current deal with Fox Sports, where the team has no ownership interest in the network, 34 percent of rights fee revenue is contributed to MLB's revenue-sharing pool. When a team has an ownership interest in a network, any rights fee received by the team is subject to the 34 percent local revenue sharing in the same way. However, carriage fees paid by cable providers to the regional sports network are not. For example, the Yankees own a minority share in YES Network. They receive an annual rights fee from the network, which is subject to revenue sharing. However, YES Network also receives carriage fees from cable providers. Those fees are not subject to MLB's revenue-sharing plan.

The reasoning is that owning a regional sports network assumes greater risk than simply cutting a deal with an existing network, such as Fox (the network that the team will be leaving after this season). But as it turns out, the Dodgers might not be assuming much of a risk because Time Warner Cable is guaranteeing the Dodgers $4 a month from every eligible household in the L.A. - even if that household isn't a TWC customer. So from the league's standpoint, that risk-free money might be seen as being part of the revenue-sharing pool. In other words, less money for the team owners to play with. From the NY Post:

Guggenheim was counting on its share of that $5 billion to help pay down debt associated with its record $2.15 billion purchase last year of the bankrupt team. Guggenheim is funding the Dodgers purchase with $1.2 billion of insurance assets. Plans are to move the Dodgers to a separate holding company that would borrow money against the guaranteed RSN revenue, the baseball source said. It is not known if Guggenheim is working to restructure the deal or if it will take its chances and file it soon with MLB. The expected RSN revenue stream also may have given the new Dodgers owners the confidence to spend freely on players, giving the team what is now the highest payroll in baseball.

Handicapping sales of AEG, Tribune papers is a fool's errand

anschutz2.jpgThese are two huge deals, with L.A. having a lot at stake. Who will wind up owning the LAT? Who will take over Anschutz Entertainment Group - and with it, the Kings, the Galaxy, part of the Lakers, Staples Center, L.A. Live (not to mention the downtown football stadium headache)? We all want names, and yet there's no way to determine how each sale is unfolding and what the eventual outcome will be. The sellers aren't talking, at least publicly, and the unnamed sources who pop up in news stories are notoriously unreliable. Besides, the sale process can change quickly - does anyone know whether Guggenheim Partners, the new owner of the Dodgers, is still bidding for AEG? I've seen stories that say yes, no, maybe, and probably not. Maybe they all were true at one point. Both deals are especially complicated because they involve multiple assets (AEG involves multiple businesses), and the two sellers - Tribune Co. and billionaire Philip Anschutz (pictured) - would prefer to sell their properties as groups, not individually (it's easier to unload the dogs that way). But who wants to get stuck with a dog that the seller says is worth more than a buyer wants to pay? Anyway, the AEG sale, if there is one, will probably be resolved sooner than the sale of the LAT and the other Tribune papers - if only because it's been on the market longer and I can't imagine Anschutz wanting his sports-and-entertainment empire moldering on the sales block. Here's my take during this week's Business Update on KPCC:

Susanne Whatley: The owner of the L.A. Times is selling all its newspapers. We heard Warren Buffett say yesterday he is NOT interested. So, business analyst Mark Lacter, who is?


Mark Lacter: Plenty of people, Susanne - the question, as always, is at what price. And that's why Tribune Co., which owns the Times, along with the Chicago Tribune and a bunch of smaller papers, is trying to determine the level of interest. Now, just to recap, Tribune Co. recently came out of bankruptcy protection, and the company is now owned by a group of bank and investment firms that were the major creditors from that bankruptcy. There's a new board and a new chief executive, and they all seem more interested in the company's TV stations than in its newspapers. And, strangely enough, the market for newspapers has been heating up: last year, 84 daily papers were sold in the U.S. - that's the highest number of sales since 2007. So, maybe the Tribune people figure this would be a good time to unload these properties.

Whatley: But I thought newspapers were dying?

Lacter: Well, not entirely - operating profits are way down from two or three decades ago, though the L.A. Times and other major papers continue to make money, which certainly attracts potential buyers. And, newspapers are a bargain these days compared with before the recession.

Whatley: Bloomberg has reported that Tribune wants to sell the papers to a single buyer or group...

Lacter: That's right, even though several potential bidders have shown an interest in only the Times. Rupert Murdoch is one. Also, L.A.'s former deputy mayor Austin Beutner is trying to put together a group of wealthy Angelenos to make an offer. I'm sure there are others. Just know that it's very early in the process, and in the end these things rarely have anything to do with the quality of the buyer but rather the quality of the price. If the Times does get sold, the new owner is going to have a newspaper that's significantly smaller than in its heyday. The newsroom has just over 500 people - that's down from the peak of 1,300 people, according to the LA Weekly.

March 1, 2013

Has Lakers' poor season affected ratings?

lakers5.jpgPerhaps a bit, according to Nielsen numbers for the first half of the season. Games on Time Warner Cable's SportsNet averaged a 4.3 rating, which is down 10 percent from the like period in 2010-2011 (last year was shortened because of the lockout). That's a drop of about 24,000 households compared with a gain of 137,500 households for the Knicks. Leading the local ratings race is Oklahoma City, which had an average 8.6 for the first half of the year, up 207 percent from 2010-2011, before the team really got going. The Thunder was followed by San Antonio, Miami, Utah, and the Lakers. Laker comparisons get dicey because DirecTV didn't carry games until a month into the season and last year's away games were shown on KCAL, which generated higher ratings because everyone had access to the station. From Sports Business Daily:

"The formula is simple: The Thunder are one of the best teams in the league, Kevin Durant is one of the most marketable stars in the league, and the Thunder is the only professional sports team in Oklahoma," said Jon Heidtke, FS Oklahoma senior vice president and general manager. "I'm not surprised by the TV ratings they're pulling in."

In looking only at home games, THR found the Lakers to be averaging a 5.6 rating. As you can see, there are lots of ways to slice the onion. In general, though, the Lakers do not lose many viewers in bad years. The fan base is quite loyal and the soap opera quotient remains high. Meanwhile, the network games seem to be doing well. From the Reporter:

TNT, which carries games mostly on Thursdays, is on pace to deliver the network's third-most-viewed NBA season in a decade, and games on ABC are on pace with 2011-12. And ratings for the Lakers' Staples Center rivals, the L.A. Clippers -- tops in the Pacific Division with a 41-18 record -- are up 56 percent, though still nowhere near the Lakers' numbers.

Reports: Front-runner emerges for AEG as others begin bowing out

AEG2.jpgThe Santa Monica.-based investment firm Colony Capital, which is headed by billionaire Tom Barrack, appears willing to pay more than the other bidders, Bloomberg reports, but its offer for Anschutz Entertainment Group is said to be below the $8 billion or so asking price (the AEG people initially had been looking for $10 billion). The company, which includes a mix of sports and entertainment properties (Kings, Galaxy, part of the Lakers, Staples Center and numerous concert venues around the world), is proving to be a tough sell. Guggenheim Partners, which owns the Dodgers, has either dropped out or is about to (depending on which reports you believe), and L.A. billion Patrick Soon-Shiong, who is leading a group that includes Steven Mnuchin, chairman of Pasadena-based OneWest Bank, is unlikely to make an offer that's close to $8 billion. With possible resistance to the price (and keep in mind that the information is spotty), it's always possible that another group might leapfrog over everyone else. On the other hand, billionaire Philip Anschutz might be faced with either accepting a much lower bid or pulling the company off the market. AEG wanted to have a deal by the end of March. From the WSJ:

Any buyer who steps up for AEG at the price the sports and entertainment conglomerate is seeking likely won't be doing it for the current earnings. For the most recent year, AEG's earnings before interest, taxes, depreciation and amortization stand at about $350 million, according to people who have reviewed the closely held company's numbers. In comparable transactions, earnings in that range would suggest a value of under $5 billion. But deal makers at Blackstone Group who are handling the sale set a goal of selling AEG for $7 billion to $11 billion, according to people involved in the process.

February 27, 2013

Guggenheim shroud unveiled a bit in Fortune report

fortune3.jpgThe low-profile firm's high-profile deals - Dodgers, Dick Clark Productions, Hollywood Reporter - were orchestrated not by Chief Executive Mark Walter but by Guggenheim's super-caffeinated president, Todd Boehly. For all their differences (Walter is described as "the sort of dependable guy you'd imagine running your local bank if Frank Capra were making movies today"), they share one not-so-modest ambition: Becoming billionaires. Guggenheim has two sides: The sober, risk-averse operation that manages $170 billion for institutions, individuals, and insurance companies; and the wild-and-crazy acquisition arm that gathers investors on a deal-by-deal basis - folks like Magic Johnson who were brought in for the Dodger purchase. The Fortune profile is one of the few times that the Guggenheim people have sat down to talk.

These days Boehly is most excited about the potential of live events. Sports, concerts, awards shows -- these primetime happenings, he believes, will continue to draw huge viewership and ad revenue despite splintered TV audiences. "As the world becomes more and more fragmented, and content becomes more and more commoditized, that premium content is only going to be become more valuable," says Boehly. The Dodgers hit Boehly's sweet spot: a live events business that Guggenheim could buy using its insurance assets and those of its clients. Boehly and Walter had been skeptical when former Braves president Stan Kasten first floated the idea of buying a baseball team. But when news broke in 2011 that the Dodgers would go on the block, Guggenheim zeroed in on a crucial detail: The team's TV deal was expiring after the 2013 season. Many people believed a new contract might bring in $3.5 billion over its lifetime. Boehly thought that figure was ludicrously low.

Time Warner Cable wound up cutting a partnership deal with the Dodgers that is said to be worth around $7 billion. Guggenheim also had been mentioned as a possible bidder for Anschutz Entertainment Group, but the Fortune piece says that the firm has backed off because of the rich $8 billion to $10 billion price tag. One more intriguing nugget: The SEC has been investigating Michael Milken's dealings with Guggenheim and whether they violate the former junk bond king's ban from the securities industry. Milken is a Guggenheim client.

The question is: Does Milken provide advice in exchange for some form of compensation? The SEC is looking at a number of transactions that Milken has done with Guggenheim, including the Milagro deal. Boehly has been subpoenaed by the SEC, and the firm has provided thousands of trading records and e-mails to investigators. The agency has contacted Guggenheim clients about Milken. SEC investigators are in regular communication with Guggenheim, but so far the probe -- which has continued for two years -- hasn't resulted in any formal action. Walter says, "Mike doesn't have an ownership or managerial role in the firm in any way, shape, or form." A spokesperson for Milken provided a statement noting that with regard to the advice he gave that led to his 1998 settlement with the SEC, Milken had been advised by his attorney that he was permitted to engage in those specific consulting transactions.

February 18, 2013

How Jerry Buss changed the face of sports in LA*

buss.jpgHe made L.A. a legitimate NBA town and helped turn pro basketball into a multi-billion dollar industry. Along the way, he brought the city 10 league championships. You can also argue that the arrival of the Buss era marked a turning point in the Dodger era. Some of this was happenstance: The Dodgers, even with a World Series in 1988, couldn't match the fast-moving, show-stomping, Lakers. Then came the O'Malleys' decision to sell, followed by a series of ineffective owners who were no match for Buss and his front office (the team has not won a series since 88). Of course, we might be in for another turnabout: While the Buss family remains in charge, it's certainly not the same franchise it was when Jerry was running the place. Buss was a classic L.A. success story: A regular guy lacking family pedigree who took advantage of business opportunities at a time when the city was rapidly expanding. He started in the late 1950s with the purchase of a West L.A. apartment building, and from there he capitalized on Socal's periodic real estate booms, cleaning up on apartments, hotels, and office buildings. When Jack Kent Cooke was looking to unload his Southern California sports portfolio (the Lakers, Kings, and the Forum), Buss swooped in. Looking back on the 1979 sale, he got quite the deal: $67.5 million. Today, the Lakers are valued at about $1 billion (Buss sold the Kings in 1987). "A person doesn't go into sports to make money," Buss told the Boston Globe, "but it's still a business." One of his first orders of business was bumping up courtside seats from $15 to $45. Buss ran into serious financial trouble in the 1980s, and there were reports that his lenders were considering seizing the Lakers and Kings. But selling off the Kings and selling naming rights for the Forum (renamed the Great Western Forum) helped him along.

More backstory on his purchase of the team:

At the end of the 1979 season, the Lakers were once again on the sales block. Reasons for the sale were varied. Cooke was concerned about his health, and he had also lost a sizable chunk of his fortune when his wife was awarded nearly half of his net worth--some $100 million--in a divorce settlement. Most importantly, however, as owner of the Washington Redskins, Cooke was also confronted with an NFL rule obliging him to divest himself of any interests in other professional sporting teams. On May 18, 1979, Cooke sold the team to Jerry Buss, a chemist turned real estate tycoon. The deal, characterized by the New York Times as "the largest single financial transaction in the history of professional sports" and "the most confusing, complex transaction in the history of sports," was valued at $67.5 million and included not only the Lakers but also the L.A. Kings hockey franchise, the Forum, and, reportedly, a lease on New York City's Chrysler Building. The deal almost fell apart the day before it was to close when Buss realized that he was $2.7 million short of funds. The money was raised through last minute phone calls to Donald Sterling, the owner of the Los Angeles Clippers, and Sam Nassi, who would later purchase the Indiana Pacers.

*Updated post

February 5, 2013

Why weren't more people in SF watching the Super Bowl?

sf.jpgThe Bay Area, including SF, San Jose and Oakland, is the nation's sixth-largest TV market and yet it finished 28th among Nielsen's 56 local metered markets, reports Deadline's Patrick Hipes. The area's 46.5 local rating compares with Baltimore's 59.6, which is said to be the largest audience for any show on Baltimore TV since household meters were first used in the city more than 20 years ago. New Orleans was the next highest ratings market, followed by Washington, D.C., Norfolk, Virginia, and Dayton, Ohio (not many choices in Dayton, I guess). Here's the top 10. But what about SF? Part of the explanation might center on the less-than-exuberant interest among Oakland Raider fans, some of whom consider the 49er faithful to be soft, wine and cheese elites (doubt they would put it quite that way). Also remember that San Jose-area denizens view their community as separate and distinct from San Francisco (NBC has a separate affiliate in San Jose). All of which suggests fractured loyalties. So it's a strange market - and yet Sunday's low ratings are still weird.

February 3, 2013

Nate Silver predicts a 49ers win

This is dangerous terrain for a guy who got it so right in last November's election. I mean, what if he's wrong? This time out, the King of Stats doesn't have thousands of poll results to sort through - for the Super Bowl he's relying on the Simple Rating System, which evaluates each team's offense and defense. On that measure, SF apparently has the edge. His analysis is in the NYT magazine.

February 1, 2013

Report: As bids for AEG are prepared, new names emerge

Westfield, the Australian-based shopping center giant (with a huge U.S. presence), Steve Mnuchin, chief executive of Pasadena-based One West Bank, and Qatari Sports Investment, a fund linked to the Qatari royal family, are all taking a look at Philip Anschutz's sports and entertainment empire, reports the Financial Times. The list of potential bidders also includes Guggenheim Partners, the investment firm that bought the Dodgers last year, Colony Capital, the L.A. real estate firm, and billionaires Patrick Soon-Shiong and Larry Ellison. The expectation is that these and possibly other players will form investment groups in which to submit bids as early as next week. The FT says that those bids will be in the $5 billion to $8 billion range, below the $10 billion that Anschutz supposedly had been looking for.

AEG's size and mix of assets initially led to uncertainty about how many bidders could afford a $10bn offer. Two people close to potential bidders said their valuations were in a $5bn-$8bn range. AEG's annual earnings before interest, tax, depreciation and amortisation are about $300m, they said, which alone might support debt of about $2.5bn-$3bn. However, Mr Anschutz and his advisers at Blackstone are said to have steered bidders to look more widely at AEG's cash flow, hard assets, trophy properties and development potential when valuing the company. These factors could support a premium price and $5bn-$6bn of debt, some people in the process said.

Meanwhile, a story in Billboard has its sources conflicted on the status of the bidding. This is what often happens when you have many parties involved in a big sale. People claim to know what's going on when in fact they don't. You might recall that AEG CEO Tim Leiweke recently said that a deal could be completed in the first quarter, and if the FT story is correct, that would still be do-able. Finding a buyer would help clarify AEG's continued interest in bankrolling an NFL stadium - and perhaps franchise - in downtown L.A. From Billboard:

Leiweke did not seem concerned about the long-term future of the company no matter what shape AEG takes under new ownership. "I...understand I serve at the will and mercy of the new owners; some may want me as part of the management team, some may not, [and] I'm okay either way," he says. "The good news is we tied up all of our key management long term. Everyone is very committed here. I'm very committed to them, they're committed to me, we all have an enthusiasm for this business."

January 31, 2013

Time Warner Cable defends huge Dodger deal

CEO Glenn Britt tried to deflect any criticism of hosting a new Dodgers channel - and along with it raising cable fees - by emphasizing the potential cost savings of cutting a long-term agreement. The Dodgers deal runs 25 years and the ongoing contract to carry the Lakers is for 20 years. He's presuming that since the costs to carry sports will keep increasing, an extended deal makes economic sense. It's a huge bet. Meanwhile, look for low-rated channels to keep disappearing on TWC. From Multichannel News:

Time Warner Cable chief financial officer Irene Esteves added that the economics of the Dodger agreement are similar to its Lakers deal in that the MSO is guaranteed access to important sports programming over a long period of time. "Our objective here as it was with the Lakers is to is to ensure that access to programming at a certain cost," Esteves said. "We think over the long term this will be a lower cost alternative than if we had not guaranteed those rights for the 25 year period." She added that given the MSO's experience with the Lakers, given the net cost of that deal compared to where sports programming costs are headed, it was the right thing to do.

TWC had a weak fourth quarter, with a loss of 129,000 video subscribers. But the company gained some customers in Los Angeles, which it said was the result of the Laker channel - as well as the addition of the NFL Network and the Pac-12 channel. Overall, Time Warner Cable missed earnings estimates for the quarter, and executives warned that profit margins might be affected in the short term by sports-related programming costs. The stock is down this morning.

January 28, 2013

Dodgers formally announce new channel

Time Warner Cable will carry the all-Dodgers channel, to be called SportsNet LA, and become the main distributor in a long-term deal that is worth about $7 billion, according to news reports. Games will be televised beginning in the 2014 season. The agreement is a huge loss for Fox Sports, which has the TV rights through 2013, and it's already raising concerns among cable operators about the escalating costs of sports programming. Time Warner Cable subscribers are almost certain to see their bills increase as a result of the Dodger deal. From press release:

Time Warner Cable has agreed to be SportsNet LA's charter distributor, and will carry the new network for its customers throughout Southern California and Hawaii under a long-term affiliation deal. In addition, in return for agreeing to make payments over the life of the deal, TWC will be the exclusive advertising and affiliate sales agent for the new network and will have certain branding and programing rights with respect to the network. TWC will also provide certain non-game production and technical services to AMP.

January 22, 2013

Dodgers strike deal with Time Warner Cable

But TWC will not own the TV rights, Bloomberg is reporting. The games will be carried on a new regional sports network to be bankrolled by Guggenheim Partners, which owns the Dodgers. Sounds like TWC's partnership will involve administration and distribution rather than actual programming. In effect, this gives the Dodgers its own channel. An announcement is expected soon. The team owners had been negotiating with Fox, which has the TV rights through 2013, and the numbers that were thrown around - $6 billion according to one report - would have been unprecedented. But ownership of a sports channel had always been an option for the team.

January 21, 2013

Dodger owners looking for their own channel?

dodgers-kasten-right-lao.jpgSeems that way, at least based on an LAT story that has the team in advanced talks with Time Warner Cable. The idea is for a partnership that would give the Dodgers a channel separate from SportsNet, which TWC launched last year as a vehicle for the Lakers. The cable provider is prepared with pay upward of $7 billion for the Dodger rights. A contract could be announced as early as this week, the Times is reporting.

Although Time Warner Cable also has a Los Angeles sports outlet (SportsNet), which is home to the Lakers and has plenty of room to accommodate the boys in blue, the Dodgers are hot for their own channel that they would control. Given that Guggenheim spent $2.15 billion for the team, that's hardly a surprise. It is banking on TV money to justify that cost and if it can own the channel too, that's more potential gravy. If the Dodgers do end up with their own network, with either Time Warner Cable or News Corp. as a partner, it would add to the glut of so-called regional sports networks eating up space on televisions here. Besides Prime Ticket and SportsNet, there is also News Corp.'s Fox Sports West and Time Warner Cable's Spanish sports network Deportes. On top of that, there are also two cable channels devoted to the Pac-12 college conference.

As costs for sports programming have increased, cable operators are raising concerns about the willingness of their customers to pick up the tab. Yet sports is a much bigger audience draw (and therefore a bigger advertising draw) than low-rated channels like Ovation, which Time Warner dropped earlier this month. Also being dropped is Current, which is being turned into the U.S. channel for Al Jazeera. From the NYT:

"We are having to take a very hard look at our lineup, not unlike a network that takes a hard look at its lineup when deciding what shows it will put on the air," said Melinda Witmer, who oversees Time Warner Cable's negotiations with channel owners. She predicted more changes in the future that would "enable us to buy the stuff that we've really got to have, and let go of stuff that's not really moving the dial."

Dodgers president Stan Kasten at Dodger Stadium last fall. LA Observed photo

January 2, 2013

NFL owners showing no signs of interest in moving to L.A.

The period between January 1 and February 15 is when owners normally indicate their plans to sell or relocate their franchises - a key six-week stretch for any team moving to L.A. But Anschutz Entertainment Group's Tim Leiweke, who hopes to build a downtown football stadium, tells the Daily News that no one has come forward so far. One reason, he says, could be the possible sale of AEG. "What I would guess ... is that there is no club currently that's going to file for a transfer simply because they are waiting to see what happens with our ownership situation," Leiweke said. After AEG was put up for sale last fall, there's been little news on the bidding process, though Leiweke says that a deal could happen soon. From the Daily News:

Leiweke said Monday "a short list" of buyers has been narrowed down for AEG, a global company that owns Staples Center, the L.A. Kings and dozens of other music and sports properties. The company, which is expected to fetch more than $6 billion, was listed for sale by Anschutz Co. in September. "There are about a dozen individuals or companies that are now in the next stage," Leiweke said, declining to detail who was on the list or bid prices. Leiweke said he believes that if the company is sold, it could happen as soon as first quarter of 2013. "We need to finish this last piece, which is an ownership group committed to the deal that we have outlined, and committing financially to building Farmers Field, and I think that it's going to happen."

December 11, 2012

Tuesday morning headlines

Santa Claus rally?: More signs of progress in fiscal cliff talks and fewer investors trying to unload their stocks. Dow is up about 90 points.

U.S. sells rest of AIG holdings: The $182 billion bailout that was supposed to wreak havoc on the economy wound up resulting in a $23-billion profit for the government. From AP:

Treasury conducted six public offerings of AIG stock over the last 19 months selling a total of 1.66 billion shares of the company. At the start of the sales, Treasury had owned 92 percent of AIG's outstanding common stock. Since the financial crisis, AIG has undergone a significant restructuring which has cut the size of the company nearly in half aimed at focusing on its core insurance operations.

Fed Ex's busiest day in history: The delivery service estimates that it shipped 19 million packages on Monday, a 10 percent increase from its busiest day last year. (LAT)

More 787 snags: Failure of an electric generator on a recent flight and concerns by the FAA about the plane's fuel line connector has manufacturer Boeing in search of answers. From the NYT:

The company has so far delivered 38 of the jets to eight airlines, including United Airlines, All Nippon Airways of Japan and Poland's LOT. It has outlined ambitious plans to double its production rate to 10 planes a month by the end of 2013. It is also starting to build a stretched-out version and mulling an even larger one after that, to make the venture more profitable. But with the combination of the problem on the United flight and the F.A.A. directive, "This was too much news about the 787 in one day," said Addison Schonland, an aviation analyst and a partner at Airinsight.com. "But remember, it's a brand-new airplane. When you start flying it around, you start discovering things. Over all, the number of hiccups has been fantastic."

DirecTV adds sports surcharge: L.A. subscribers who want regional sports networks like Fox Sports West and SportsNet are being asked to pay an additional $3. That's on top of the costs that DirecTV passes on to all its customers. From the LAT:

The move is significant because even though it is only for new DirecTV subscribers and only used in areas where there are multiple local sports channels, it could be seen as a first step toward selling sports channels separately. Sports channels account for a large chunk of cable bills as the rights to games continue to skyrocket. DirecTV has also tested this approach with some current subscribers as well, the spokesman said.

Venice's Rose Avenue turning corner: As happened with nearby Abbott Kinney Boulevard, the down-and-out bohemian days are numbered. From the LAT:

Last February, police began enforcing a curfew at Venice Beach, forcing people who slept there to move to an encampment on 3rd Avenue near Rose. In May, they cleared the encampment too, although they allowed a few dozen people to return and sleep late at night, without leaving belongings. Today, shoppers and restaurant patrons far outnumber homeless people on Rose Avenue. Moon Juice opened last January, and a few months later a new development opened on the Pioneer Bakery site. Rents there for one of the 70 units range from $3,140 for a one-bedroom to $4,369 for a two-bedroom, said a spokesman with Archstone, the Englewood, Colo.-based owner.

December 7, 2012

Fox still favorite for Dodger deal, but Time Warner Cable hanging around

The team's exclusive negotiating window with Fox expired in November, so why not check out the cable operator? LAT reports that the Dodgers and TWC met to discuss TV rights, though the Dodgers have been talking about a supersized $6-billion, 25-year contract. TWC has shown a willingness to spend big bucks on sports programming - it cut a $3 billion deal with the Lakers - but this one might be over the top. Of course, the Dodgers could also form their own cable channel, but that carries risks as well. From the Times:

Now it up to the Dodgers to make an offer to Fox by today (Friday). Fox Sports then has a month to make up its mind. If the Dodgers go with Fox Sports, a stake in Prime Ticket is likely to be part of the agreement. That may not be something Time Warner Cable can provide since the Lakers do not have an ownership stake in SportsNet. If the Dodgers did go with Time Warner Cable and receive a piece of the channel, the Lakers may want a stake as well.

November 15, 2012

Report: DirecTV agrees on deal to carry Lakers

An announcement could come as early as this afternoon, reports the LAT. The El Segundo-based satellite service had been balking at the price being asked by Time Warner Cable, which has exclusive rights to the games through its new SportsNet and Deportes channels. No word on terms of the deal.

November 14, 2012

For those of you who missed it, Lakers lose again

lakers4.jpgThat would be DirecTV subscribers who still can't receive Time Warner Cable's SportsNet channel because the satellite company and the cable company haven't come to terms on a distribution deal. Time Warner is leveraging its TV rights contract with fee demands that DirecTV refuses to pay. Actually, both sides have pretty good arguments: Time Warner is shelling out lots of money to carry the Lakers and wants a decent return, while DirecTV is trying to rein in programming costs. From this week's Business Update on KPCC:

Lacter: DirecTV is not only worried about what it has to pay for the Lakers, which is pricey enough, but also what it might cost to carry the Dodgers once team owners decide on a new TV deal. The CEO of DirectTV says that programming costs, especially sports programming, have gotten way out of hand. He obviously doesn't want to lose Laker fans, but he also doesn't want to alienate the rest of his customer base by raising prices.


Steve Julian: My mom, who grew up walking distance from the Coliseum and watched every Rams and Trojans game in person, now can't watch her beloved USC football games for the same reason. She can't get the PAC 12 channel. She's in her 70s, and THAT's driving her crazy. This is more than just a Lakers issue.

Lacter: That's right, the new Pac 12 Network isn't available on all cable and satellite systems. You know, the TV market has become so fragmented that live sports is one of the few reliable sources of programming. And what we're seeing in the L.A. market Steve is the growth of regional sports channels. So far, you have Fox Sports, Prime Ticket, the Time Warner SportsNet Channel, and the Pac 12 channel. That adds up to almost $10 per subscriber per month that the cable and satellite services have to pay, according to Sports Business Journal. But it does not include the upcoming TV rights deal for the Dodgers, which is certain to be huge - whether the team decides to start its own TV channel (as the Yankees did), or possibly work out a deal with Fox or Time Warner.

Julian: Do cable companies work well as content providers?

Lacter: Usually not - that's a big part of the problem. And eventually, all roads lead back to the sports franchises themselves. The Lakers not only asked for a multi-billion-dollar deal, but wound up giving exclusive rights to a single cable service - Time Warner - that then would be free to charge its competitors whatever it wanted. It was kind of asking for trouble, which is what they have with the DirecTV situation.

November 7, 2012

DirecTV still balking at Laker channel

timewarner2.jpgOr perhaps it's Time Warner Cable balking at what DirecTV has offered to carry the Laker channel. Whatever the case, both sides have yet to reach a deal and that has many thousands of DirecTV customers unhappy. Cox Cable, meanwhile, will have the Laker game tonight as part of its new deal with TWC. From the LAT:

DirecTV has asked if it could offer SportsNet on a specialty tier with similar channels that subscribers would have to request and pay extra for, an offer Time Warner Cable rejected. Time Warner Cable is seeking as much as $3.95 per month, per subscriber for SportsNet, according to people familiar with the matter.

DirecTV CEO Michael White says the problem goes well beyond a dispute with Time Warner Cable. During a conference call with analysts, he cited rising programming costs as the big issue - and judging by his comments, an agreement on the sports channel isn't in sight. Remember how long it took TWC to cut a deal for the NFL Network?

In terms of Los Angeles, I think it's another example of how broken this system is. People take the same content, package it up, bid it up for 3x the national average on a per-game basis and then try and stick it back to the other distributors in the geography. And I think that's very unfortunate. We have a system of very carefully tracking churn by day to look at kind of what we think our customers will be most interested in. We are continuing to have active discussions about the Lakers Network. We hope to have a deal on that content. But all of these new channels that -- everybody wants a new channel and they want to stick it into the bundle is not right. I mean, we are taxing most of our customers who wouldn't be willing to pay for that content. And I've said before, I think the regional sports network's structure in the industry is broken, and it is, but I'm probably not going to be able to change that overnight. But adding other stuff to the bundle that the average consumer can't pay for without allowing it to be sold to those that want to pay for it is just not right. So we'll continue to stand strong for our customers. I got to represent the majority of our customers, not just the few that want to send me an e-mail, and I'm trying very hard to do that in a disciplined way.

November 6, 2012

Totaling up the cost to watch sports in L.A.

timewarner2.jpgUntil a few months ago, Fox Sports and Prime Ticket were the only regional sports networks in town. But with the addition of the Time Warner channels and the Pac-12 Networks, cable and satellite operators are paying close to $10 per subscriber per month, an increase of more than 90 percent, according to an article in Sports Business Journal. It's just slightly below the amount operators pay in the NY market - and that doesn't include a new TV deal for the Dodgers (you know that won't come cheap). The costs aren't going down well, as seen by the continued impasse on distribution deals between Time Warner Cable and satellite operators DirecTV and the Dish Network. This is what happens when the numbers get out of hand.

Time Warner Cable's biggest business is as a distributor itself, where it has gained a reputation for conducting tough carriage negotiations with sports channels such as NFL Network and MSG Network. Now, Time Warner Cable is the one with high-cost sports channels, and other distributors are the ones complaining about them. DirecTV and Cox went public last month with complaints about the high cost of the Lakers channels. [Bob Wilson, the top programming executive at Cox Communications], worries that the strategies being used by Comcast and Time Warner Cable could threaten the entire pay-TV business if their business plan is used in other markets. "This has been a really good business model for a long time," Wilson said. "You intuitively have to have some understanding that as we go forward more people will be increasingly priced out of the product."

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The rising cost of sports rights is one of the reasons why Cox decided to shutter its own RSNs earlier this year. Cox opted not to bid on the New Orleans Hornets or San Diego Padres rights this year in an attempt to prevent a bidding war that could cause those rights to climb too high. Fox Sports' RSNs eventually gained rights to those two teams, and Cox signed long-term carriage deals with the networks. Cox was the dominant cable operator in both of those markets. But Wilson said the cost of sports rights had been increasing so rapidly that it stopped making financial sense for Cox to keep those rights. "We didn't control the entire marketplace in those areas," Wilson said, adding that negotiations with other distributors were becoming problematic as rights fees rose. "And we feel that more bidders has the effect of driving rights fees up disproportionately. I'm not saying that's right. That's the path we chose. Others have chosen different routes."

November 5, 2012

Monday morning headlines

Stocks edge lower: Not much action is expected on the day before the election. Dow is down a few points.

Gas nears $4: An average gallon of regular in the L.A. area is $4.023, according to the Auto Club, down almost 70 cents from its record high in early October.

Arizona group turns over records: Americans for Responsible Leadership had been battling to keep secret the source of an $11 million contribution aimed at influencing two California ballot measures. Names of donors are expected to be revealed. From News 10:

Following Saturday filings from both sides, the state's high court ruled unanimously on Sunday afternoon that the Fair Political Practices Commission must be allowed to review confidential donor records now... even as the appeals process was underway. The Arizona group then asked for more time -- until Monday morning -- so as to appeal the state ruling to the U.S. Supreme Court. But California's justices denied that request, which came hours after the documents were supposed to have been turned over.

Time Warner Cable cuts deal: Subscribers to Cox Cable will be watching the Lakers on Time Warner's new sports channel after a distribution deal was cut over the weekend. That still leaves DirecTV and the Dish network without the Lakers. (LAT)

First Dreamliner lands at LAX; Actual commercial service for the Boeing 787 began with the arrival of a United flight from Houston. United is the first North American customer for the 787. From the Daily News:

Boeing estimates the new airframe will save airlines roughly 20 percent in fuel compared with similar-sized planes. The plane is also supposed to be more comfortable for passengers: It is pressurized to 6,000 feet above sea level, rather than 8,000 on typical jets, according to Boeing. United's 787 has 36 seats in business class and 183 in coach.

County assessor asks for bail money: An email sent from John Noguez's personal account says that he "needs our support more than ever." Noguez was arrested last month on corruption charges. (LAT)

Weekend box office: Disney's "Wreck-It Ralph" steals the show with $49.1 million in its opening weekend, followed by "Flight" ($25 million) and "Argo" ($10.2 million). (Entertainment Weekly)

October 30, 2012

Tuesday morning headlines

Markets closed a second day: Not since 1888 have the exchanges been shut down two consecutive sessions because of the weather. Markets will almost certainly be open on Wednesday. From DealBook:

Over all, a second day of closed markets could have a relatively limited effect on trading when business resumes, according to Larry Tabb, the founder and chief executive of the Tabb Group, a financial research firm. An extended halt in trading could create some pent-up demand among traders that might lead to some higher volatility, he said. That could mean stocks of companies like insurers could see swings in their prices. But he predicted a short-lived effect on the markets.

Home retailers preparing: Chains like Home Depot and Lowe's are expecting stepped-up business as post-storm rebuilding gets underway. From the NYT:

Some 441 Home Depot locations from North Carolina to Bangor, Me., are expected to be in areas that will sustain storm-force winds, Mr. Spiron said. And those stores need to be ready for the onslaught of customers whose numbers are bound to rise. As of 5 p.m. Monday, 55 of Home Depot's 2,200 stores -- those directly in the storm's path -- were closed. The company expected to reopen them as soon as possible. "As we close, those days are going to be tough -- that's a big hole when you're not ringing cash registers," Mr. Spiron said. Once the storm passes, though, "there's a lot of business being done. It's a big deal in terms of the amount of goods we're going to move through."

Still no flights: Airlines report more than 200 storm-related cancellations to and from LAX and even when operations resume - perhaps in the next day or so - it will be several more days before passengers are re-booked.

Apple shakeup: Scott Forstall, who handled the company's mobile software efforts, and John Browett, who was in charge of retail operations, have been fired. From the NYT:

Mr. Forstall was an important executive at the company and the one who, in many respects, seemed to most closely embody the technology vision of Steven P. Jobs, the former chief executive of Apple who died a year ago. But Mr. Forstall was also known as ambitious and divisive, qualities that generated more friction within Apple after the death of Mr. Jobs, who had kept the dueling egos of his senior executives largely in check. Mr. Forstall's responsibilities will be divided among a few other Apple executives.

L.A. housing market looking better: Home prices increased 1.3 percent from July to August and 2.1 percent from August 2011, according to the Case-Shiller index. Most all the cities surveyed showed a month-to-month gain. From press release:

"The sustained good news in home prices over the past five months makes us optimistic for continued recovery in the housing market," [says David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices].. "News on home prices confirms other good news about housing. Single family housing starts are 43% ahead of last year's pace, existing and new home sales are also up, the inventory of homes for sale continues to drop and consumer mortgage default rates are reaching new lows. Further consumer confidence continues to rise. Even as we end the seasonally strong home buying period, the statistics are positive."

Series a ratings bust: The Giants-Tigers matchup netted an average of 12.7 million viewers for Fox, down from 16.6 million last year. The last game on Sunday night lost out to football on NBC. (THR)

Calpers sues Compton: California's giant pension fund says the city has fallen behind on its payments to the tune of $2.7 million. The city manager says Compton is facing a short-term cash-flow problem. (Sacramento Bee)

October 24, 2012

Time Warner turns down Cox Cable's offer to carry Laker channel

lakers3.jpgJust a week to go before the first regular season game on the new SportsNet channel and Laker fans who don't have Time Warner are starting to sweat, Cox Cable, which has 1.2 million subscribers (mostly in OC and San Diego counties), proposed to carry the new channel on a specialty tier but Time Warner said no. Time Warner has also failed to sign deals with DirectTV and Dish Network. Don't be surprised if they can't come to terms before the start of the season (it's a long year). Time Warner's deal with the Lakers didn't come cheap - an estimated to run $3-billion over 20 years - and neither will its distribution contracts with other carriers. In the short term, Cox, DirecTV and the others have far more to lose by not running the Lakers. From the LAT:

Time Warner Cable is seeking as much as $3.95 per-month, per-subscriber for the two channels. The two channels launched Oct. 1. Besides the Lakers, SportsNet and Deportes also carry the Los Angeles Galaxy soccer team. Time Warner Cable is also expected to pursue rights to the Dodgers, whose contract with Fox's Prime Ticket regional sports channel expires after next season. "I think it is extremely expensive for basically a one-team channel," said Dave Bialis, senior vice president of Cox's California operations.

Wednesday morning headlines

Stocks inching higher: The earnings news is a little brighter, thanks to Boeing lifting its full-year outlook. Dow is up 30 points.

Facebook up sharply: As in almost 22 percent this morning (though the stock is still under $24 a share). The company did well in mobile ads last quarter and that has some analysts encouraged. (Reuters)

Gas update: L.A. area prices fell another four cents overnight. An average gallon is $4.403, according to the Auto Club, which is 30 cents lower than the record-high earlier this month.

Jump in new-home sales: The increase was 5.7 percent in September as sales reached their highest level in nearly 2-1/2 years. (Reuters)

Do voters know Proposition 30?: Gov. Brown says many do not, which is one of his big challenges in raising support for the tax-raising measure. From the San Jose Mercury News:

Brown said voters have never faced "such a stark choice" as they do with Proposition 30, which would provide $6 billion annually to the state and avert $5.4 billion in cuts to schools and community colleges and another $250 million each to the University of California and California State University. "If you vote yes, you get billions into schools, or you vote no and you can yank billions out of schools and jack up tuition," the governor said in a telephone interview with this newspaper. "It's an either/or simple matter of arithmetic with monumental consequences for the whole state."

Karmazin to step down: The resignation of the Sirius CEO comes as Liberty Media, the satellite radio company's largest shareholder, is about to take over. (LAT)

World Series: The Giants and Tigers square off tonight in Game 1. Ratings wise, Fox can only hope for close games - the SF and Detroit media markets are not huge.

October 17, 2012

Wednesday morning headlines

Stocks open lower: Market pulling back after Tuesday's sizable gains - perhaps the result of tepid earnings news. Dow is down a few points.

Gas price update: An average gallon of regular in the L.A. area fell another couple of pennies overnight, to $4.614, according to the Auto Club. That's about nine cents lower than its high on Oct. 9.

Smallish profit for B of A: That's after the banking giant paid out large amounts to settle legal claims that it misled shareholders in acquiring Merrill Lynch. From DealBook:

The results actually pointed to a small victory for the bank. The modest profit, padded by a $2.3 billion reduction in loan loss reserves, exceeded the estimates of analysts polled by Thomson Reuters, who had expected a loss of 6 cents a share. The bank also recorded improved investment banking income, which jumped 7 percent. Mortgage originations grew 18 percent, as interest rates remained at near record lows. And the bank's wealth management unit continued its strong gains.

SEC looking into San Bernardino: Federal investigators are calling it an "informal inquiry" and have requested that the city not alter or destroy financial documents. From the LAT:

City Atty. James Penman, to whom the letter was addressed, said he spoke with SEC attorneys Tuesday and assured them the city would cooperate. Penman said he was not told what triggered the inquiry or what, specifically, the federal agency planned to look into, although he said it would probably relate to the use of city bond funds, which falls under SEC regulatory authority.

State investigating CVS: California regulators are looking into complaints about the drugstore chain refilling prescriptions and billing insurance companies without patients' consent. From the LAT:

The state board is the third government body known to be looking into the company's refill practices. Late last week, the inspector general's office for the U.S. Department of Health and Human Services launched an investigation into allegations that CVS billed Medicare for medicine that patients hadn't ordered or picked up, according to a federal official who did not have authorization to discuss the matter and asked not to be identified. The inspector general's inquiry is the starting point for any case involving possible fraud involving Medicare, which provides health coverage for about 50 million Americans.

Nike severs ties with Lance Armstrong: The clothing and footwear company cited evidence that he participated in widespread doping. (AP)

NHL's latest offer: League owners are proposing a 50-50 split of hockey-related revenue with the players - the first significant movement in the talks since the lockout began on Sept. 15. The union is expected to respond in the next day or two. (NYT)

October 9, 2012

Report: Asking price for AEG is around $10 billion

AEG2.jpgThat's quite a bit higher than initial estimates of between $6 billion and $8 billion and will likely limit the field of potential candidates. It also suggests that AEG owner Philip Anschutz is not about to hold a fire sale of the company, whose assets include the Staples Center, the Lakers, and concert venues around the world. From Reuters, which has the scoop:

The initial, 25-page AEG information memorandum that describes the business but has no financial information was expected to go to "dozens" of potential buyers on Monday, the sources said. The initial group of recipients is expected to include rich individuals, rivals, sovereign wealth funds, real estate firms, and private equity firms, they said. Anschutz is likely to start signing non-disclosure agreements and send out the books with financial details by the end of the month, the sources said.

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A buyer would need to write a large check for the company, including their own cash and bank financing, which could make it necessary for bidders to form consortiums. There are no easy comparisons for potential buyers to draw on in valuing the company. What's more, Anschutz will need to get approvals from sports organizations such as the National Hockey League and the National Basketball Association to be able to transfer ownership of sports teams.

October 4, 2012

Business impact of NHL canceling first two weeks of season

lakings.jpgThe L.A. Kings no doubt wanted to quickly capitalize on being Stanley Cup champions (TV ad revenues, sales of merchandise, etc.), so the cancellation of the first five games (four of them at home) is less than ideal. But from an economic standpoint, it's not a huge event, especially if the dispute is settled soon and the league can reschedule some or all of the games. Even during last season's lengthy NBA lockout, Staples operator AEG managed to make up most of the lost nights. From the LAT:

In the 124 days of the shortened NBA season -- which started on Christmas -- Staples is scheduled to host 127 events, said Lee Zeidman, general manager of Staples as well as Nokia Theatre and the L.A. Live complex adjacent to the venues. "From a financial standpoint, the arena has a good chance of hitting its original budget" before the lockout, Zeidman said Thursday. "The restaurants at L.A. Live also will get close to hitting their original projections." Because some days have more than one event, the arena still has nine empty days, but many of them are likely to be filled as the Los Angeles company continues to reach out to concert promoters and event managers, Zeidman said.

The biggest challenge is trying to replace the cancelled games at the last minute. Last year Staples managed to land a boxing match and additional concert performances by Katy Perry, Jay-Z, and Kanye West. But most bookings are made many months in advance. As for other impacts, AEG employs between 2,000 and 4,000 part-time workers for each event, so there's the possibility of lost wages. Add in the possibility of lost business at L.A. Live and other downtown venues. Most of that cannot be made up. Of course, it can work the other way - advancing deep into the playoffs means more games and more fans. Such are the vagaries of running a restaurant, souvenir stand, or arena.

October 3, 2012

Wednesday morning headlines

Market still tentative: Mixed economic data and political uncertainty are keeping many investors on the sidelines. Even so, the Dow is up about 40 points.

Decent jobs report: U.S. businesses added 162,000 workers to the rolls in September, according to ADP, which is a bit higher than expected. The ADP data has not been a reliable indicator of the government's employment numbers, which come out on Friday. (AP)

T-Mobile parent buys MetroPCS Communications: The complex cash-and-stock deal could put pressure on Sprint Nextel, particularly in low-cost cellphone service. From DealBook:

"The T-Mobile and MetroPCS brands are a great strategic fit - both operationally and culturally," René Obermann, the chief executive of Deutsche Telekom, said in a statement. "The new company will be the value leader in wireless with the scale, spectrum and financial and other resources to expand its geographic coverage, broaden choice among all types of customers and continue to innovate."

Gas prices jump: All of a sudden, an average gallon of regular in the L.A. area is $4.259, according to the Auto Club, up more than a dime from last week. Exxon Mobil's Torrance refinery lost power on Monday and may suffer production problems for another week. That sent wholesale prices surging. From the Mercury News:

It's a combination of low inventories and multiple California refinery problems," said Tom Robinson, head of Robinson Oil Corp. "Really since the Chevron Richmond fire, inventories have been tight. As other refinery problems occur, there isn't much or any available inventory. "Retailers are not yet reflecting the wholesale price increases they have experienced, so unless supply problems improve quickly, retail prices will definitely be going up."

Dodgers done: Last night's 4-3 loss to the Giants puts L.A. out of the post-season. Not to worry, says Mark Walter, the team's chairman - he says his investment group has the money to make significant acquisitions. From the LAT:

Walter acknowledged he was frustrated when his high-priced lineup didn't immediately produce this summer. "But you just have to let it happen," he said. "You think you're going to keep this team down forever? We did not make this move for this year. Of course, we hoped it would help this year. But that's not why we did it. You noticed the guys we picked up, we think they're in the middle of a long number of years for us."

S&P raises L.A. County credit rating: The upgrade is from AA- to AA, with S&P citing the county's stable outlook and strong general fund reserves. A better credit rating means that the county can pay less to borrow money. (Reuters)

Food truck owners battle El Segundo: The SoCal Mobile Food Vendors Association says in a suit that the 10-minute limit on selling from parked vehicles conflicts with state law. From the Daily Breeze:

"It's our position it really is just a ban," said Kevin Behrendt, an attorney for the group whose members include dozens of the trendy trucks that roam in and around Los Angeles selling everything from lobster rolls and rice bowls to snowballs. El Segundo is one of six cities the association has sued within the past couple years because of disputes over ordinances, Behrendt said. But in other cases, he added, the group has worked with local governments as they've amended their laws.

Layoffs in San Diego: A total of 80 people will be let go at both the U-T and the North County Times (recently acquired by U-T owner Doug Manchester). The cuts involve one-third of the total North County Times' staff, including 24 from the newsroom. (North County Times)

September 27, 2012

Thursday morning headlines

Stocks edge higher: After five consecutive down days, the market is struggling to stay positive. Dow is up 10 points.

Second quarter really was a stinker: The economy grew at an anemic 1.3 percent, which is lower than the previous estimate of 1.7 percent. About half of the downward revision came from a decline in farm production. (AP)

Big drop in jobless claims: Weekly filings for unemployment benefits plunged 26,000 to 359,000, the lowest level of weekly applications in nine weeks. From AP:

Economists were mildly encouraged by the figures. Still, many still expect the government's employment report for September to show only modest job gains, perhaps about 100,000. That's about the same as in August. The September jobs report will be released next week.

Job growth underestimated: The government is raising total employment by about 386,000 for the year ended March 2012. That's an average of 32,000 additional jobs per month, which brings the average monthly job growth up to 194,000 from 162,000. (MarketWatch)

Mortgage rates hit record low: An average 30-year fixed fell to 3.40 percent. Could be that the Federal Reserve's stimulus efforts are beginning to have an effect. (AP)

NFL, refs have tentative deal: Pensions will remain in place for current officials through the 2016 season. New officials get a 401(k). From the NYT:

Early on Wednesday, they reached a compromise on the hiring of additional officials to create the so-called bench that the league wants to use to replace officials they believe are underperforming. The pension proved more complicated. Officials had hoped to retain a traditional pension while the league wanted to eliminate it in favor of a 401(k). The officials had offered a proposal to have current officials retain their pensions; new officials who are hired would be enrolled in a 401(k). That would allow the league to get rid of the pensions by attrition, as the existing officials retired.

AEG convention hall plan criticized: A group of architects advising Mayor Villaraigosa say that the proposal has many flaws, including having visitors enter the new hall through a dark, unsafe space. From the Daily News:

They believe this will so negatively impact Pico Boulevard and the Pico-Union neighborhood that an overhaul is required. "This is not good city design," Norman Millar, president of the Burbank-based Woodbury University School of Architecture, and one of the Vision Team members, said in an interview this week. "Plain and simple. It's a no-no." The Vision Team's recommendations, compiled in a formal report released this month, comes as the City Council is set to vote Friday on the project's environmental impact report - the crucial vote that will allow Anschutz Entertainment Group to move forward.

Tempur-Pedic buys Sealy: Mattress shoppers take note. Purchase price is $228.6 million. (DealBook)

September 26, 2012

Reports: NFL, referees reach tentative deal*

Sounds like an announcement might be made shortly, with the league trying to get them back to work for this weekend's games. Backstory from the NYT:

The lockout began in June and centered largely around the issue of referees' pensions, which the league sought to eliminate and replace with 401(k)'s. The league also sought more control over replacing officials it deems are underperforming during the season. N.F.L. Commissioner Roger Goodell has come under fire as the officiating became a bigger issue in the third week of the season. He has said all along that his main goal is to reduce the bad calls that regular officials make by holding them more accountable. But the result has been a raft of poorly officiated games.

*Update: A source within the NFL Referees Association tells the LAT that a deal has not been reached, though negotiations continue. You never know in these situations, but it's possible that the referees are trying to leverage this week's uproar over the replacement refs. I'd imagine that they're pretty close.

Wednesday morning headlines

Stocks slump: Dow is off 25 points - could be the fifth straight down day. From Reuters:

"Buyers have reached a point of exhaustion after FedEx and Caterpillar and the like, all of whom pointed to economic weakness," said James Dailey, portfolio manager at TEAM Asset Strategy Fund in Harrisburg, Pennsylvania. "People had been buying on the idea that the Fed would prop everything up, but if they can't, there's real potential for panic selling."

Greek protests turn violent: The clashes are over the government's austerity measures. About 50,000 people joined the union-organized march in central Athens. From AP:

Greece's politicians have struggled to come up with more austerity measures that would be acceptable to its rescue creditors, with disagreements arising between the three parties that make up the coalition government. The country has been dependent on international loans from other eurozone countries and the International Monetary Fund since mid-2010. Without them, Greece would be forced into a chaotic default on its debts and possibly into an exit from the 17-country bloc that uses the euro.

DWP rate hikes: On a 10-4 vote, the Council gave preliminary approval to an 11.1 percent increase - despite complaints about the utility's high salaries. (LAT)

Tesla struggles: The electric car company is selling five million more shares to raise cash. Also, the federal government has waived some conditions of a $465 million loan. From DealBook:

In recent months, Tesla has been ramping up production of its main vehicle, a high-performance sedan called the Model S that goes from zero to 60 miles per hour in 4.4 seconds. Tesla has started rolling out the first cars, but was four to five weeks behind on delivering the vehicles to customers. In the meantime, it is consuming cash at a rapid rate and cut its revenue forecast on Tuesday. "Tesla's story is starting to show some serious cracks," said Carter Driscoll, an analyst at CapStone Investments. "This shows that capital raising is a necessity, not a luxury, as the company had maintained."

Driverless car bill signed: The legislation requires the DMV to draft regulations for self-driving vehicles. That includes a separate operating permit for drivers. (Mercury News)

Jaime McCourt sues her ex-husband: She wants more money from the Dodger sale, alleging that Frank McCourt understated the value of the team as part of their divorce settlement. (LAT)

September 24, 2012

Guggenheim Partners, Patrick Soon-Shiong make bid for AEG

soon.jpgHere we go - the first of what are likely to be several bids for the sports-and-entertainment unit of Philip Anschutz's empire. Reuters reports that Soon-Shiong, who has a net worth of $7.2 billion, is joining up with Guggenheim, the investment firm that recently bought the Dodgers. Other investors may join the group as well. Also keep an eye on hedge fund billionaire Steve Cohen, who lost out on the Dodgers. Meanwhile, AEG Chief Executive Tim Leiweke says the sale should be completed before the NFL owners hold their March meeting - a quick turnaround for so complicated a deal. Is Anschutz several moves ahead of us or does it just seem that way?

September 22, 2012

Where to find the NFL Network on Time Warner Cable

It's channel 355 for those on the Variety or premium Sports Pass tier. The RedZone channel will be on channel 356 (only available on the Sports Tier). Programming will be available on Sunday, and this week's Thursday night game is the Browns-Ravens (let's not everyone jump to DVR). Time Warner has held out on the league's network for years because of differences over how much the channel is worth to the cable lineup. After the season, audiences tend to disappear. But the NFL has nearly doubled the number of Thursday night games to 13, and that would be hard to ignore.

Earlier: Report: Time Warner Cable agrees to carry NFL Network

September 21, 2012

Report: Time Warner Cable agrees to carry NFL Network

nflnet.jpgAn announcement could be made later today, Bloomberg is reporting, citing a source. No word yet on the particulars. Time Warner had been the last holdout among major cable companies - and not having coverage in TWC's L.A. and N.Y. markets had been a source of frustration among league officials. About a month ago, the NFL reached a deal with Cablevision. The contract would cover both the NFL Network and the RedZone Channel.

September 20, 2012

Why selling AEG will be difficult

AEG2.jpgIn retrospect, the Dodger sale was a piece of cake: One major league baseball team, one stadium, and a bunch of land. Where do we sign? Selling Anschutz Entertainment Group is something else entirely. Sports stadiums, arenas, soccer teams, basketball and hockey franchises, theaters, entertainment districts (L.A. Live among them), music festivals, museums - it's a sports-and-entertainment colossus. And the beauty part of the business model is that AEG can make its money in each sector in all sorts of ways - selling tickets, renting out halls, arranging sponsorship deals, and even collecting for parking and t-shirts. They call it a "virtuous circle." But in a way, that's the problem. While potential bidders might be interested in the soccer teams and others might want the real estate and still others might go after the music side, it's hard to imagine single entity wanting the whole shebang. Here's another problem: It's very hard to determine the value of the whole shebang because no company does precisely what AEG does. And the Anschutz people insist that the company will not be sold in pieces - that it's all or nothing. "The sale involves the platform in its entirety," said Lyndsey Estin, a spokeswoman for AEG, a subsidiary of Anschutz Co. Of course the new owners could sell off the assets they don't want, but that would be a difficult, time-consuming process - and might not fetch the kind of money they had planned. From the Denver Post:

Dan Steinberg, the founder of Square Peg Concerts in the Pacific Northwest who started his concert-promoting career in Denver, doubts the deal will close at all. "The things that would have to happen for it to go through are insane," Steinberg said. "The sports teams involved, each of the leagues would have to approve the sale and the new ownership. It would have to be cleared by antitrust, depending on who the buyer is."

Frankly, that's the bet a number of folks are taking: That Anschutz won't find the buyer or the price he's looking for and take the property off the market. He's done that sort of thing before. I guess it's also possible that an investment group will swoop in - as was the case with the Dodgers - but remember this is a far more complicated company. Think of the toxic mix of egos that would be involved, especially as it relates to asset sales and acquisitions? It's a disaster waiting to happen. And what about AEG Chief Executive Tim Leiweke? However you might feel about the guy, there's little question that he built this company from basically nothing to what it is today. Leiweke is said to have a long-term contract with Anschutz - one that could probably be voided under certain circumstances, such as a sale - but no buyer in their right mind would want to see Leiweke go. Matter of fact, it wouldn't be a stretch if Leiweke himself tried to form his own investment group. Which brings up the most important point: Nobody on the outside has the slightest idea of what's really going on - strategies, motivations, alliances, politics, any of it. That's why the city of L.A. has no business cutting a deal on the downtown football stadium until there's clarity on the AEG ownership situation. The city does not have to do this deal right now. Life will go on quite nicely. That the vote is happening at all is more about political legacies (Villaraigosa and several members of the council) than good sense. Could you imagine any business owner cutting a complicated deal with someone who might not be around in a few months? Crazy. And yet that's what city officials are about to do.

Thursday morning headlines

Stocks down a bit: Markets remain tight, with only limited economic and corporate news. Dow is down about 20 points.

Small drop in jobless claims: Weekly filings for unemployment benefits fell only 3,000, to 382,000, which indicates a relatively weak job market. (AP)

Falling oil prices: Trading is down to about $91 a barrel amid concerns about a slowing global economy. (AP) No change, however, in local gas prices, with an average gallon of regular at $4.157, according to the Auto Club.

Still sluggish economy: The state unemployment rate is expected to hover around the current 10.7 percent level through the end of the year, according to the UCLA Anderson Forecast. By 2014, the jobless rate will be about 8.5 percent. From report:

Both tech heavy and lower skilled sectors gained jobs with the only significant job loss being generated in the government sector and the lagging logistics industry. All of this adds up to a California that is on the mend and growing consistent with our forecast for the past year. Although the unemployment rate has stayed persistently high and there exist structural problems, unless there is a further slowing of the U.S. economy, the state's unemployment rate should be converging on the nation's unemployment rate over the next two years.

Angels moving to City of Industry?: Team officials have held preliminary talks about relocating, the Daily News reports. The lease at Angel Stadium in Anaheim is up in 2016.

While officials at Majestic Realty Co. are still working hard to bring a National Football League team to Industry, they are open to building a baseball stadium instead, according to the source. Billionaire developer and Majestic Realty Co. owner Ed Roski Jr. in 2008 announced plans to build a 75,000-seat National Football League stadium on 592 acres of publicly owned land on the east side of the city near Walnut and Diamond Bar. The Industry location is about 19 miles north of Angel Stadium.

More job cuts at B of A: The banking giant is expected to eliminate 16,000 positions by the end of the year, reports the WSJ.

Chief Executive Brian Moynihan is trying to speed the company's transformation into a smaller and more efficient operation as he tries to persuade investors that expenses can be adjusted to compensate for revenue lost to new regulations, an uneven economy and shaky markets. Since becoming CEO in 2010, he has shifted away from a nationwide expansion strategy embraced by his predecessors Hugh L. McColl Jr. and Kenneth D. Lewis, and shed many of the businesses that he considers to be nonessential. Those include several international credit-card units, private-equity holdings, an insurance unit and stakes in overseas banks.

Wrapping up baseball contract: Fox and Turner are expected to retain rights to both regular season and post-season games in a deal running through 2021 and valued at around $7 billion. From the WSJ:

The value of sports rights is continuing to grow because the programming draws the highly sought after young male demographic. Also, live sports broadcasts have remained largely immune from a media world that grows more reliant on digital recording devices and online video services that allow viewers to watch their favorite shows when they want to and skip commercials.

Brown's tax proposal losing ground: Only 51 percent of likely voters support Proposition 30, while 36 percent are opposed, according to the UC Berkeley-Field Poll. The competing Proposition 38 has 41 percent support, with 44 percent opposed. From the SF Chronicle:

Mark DiCamillo, director of the Field Poll, said the shift of people into the undecided category for both measures - an increase of 5 percentage points for Prop. 30 and 7 percentage points for Prop. 38 - shows voters are beginning to weigh the merits of the competing measures. "I think people are starting to hear campaign claims and they're getting the fact that there are two different things," he said. "If I'm for the schools, which one do I go with? I think that's really what's happening."

Poor people getting hit: Average earnings for the lowest fifth of households fell 12 percent in L.A. County between 2007 and 2012, according to an LAT analysis of Census data. In Riverside County, the decline was 27 percent.

Southwest taking a back seat: The nation's biggest airline (based on passengers) ranks only sixth in overall performance, according Airfarewatchdog.com. The rankings are based on the percentage of canceled flights and the rate that bags are mishandled, among other factors. (USA Today)

September 19, 2012

How AEG sale could make mess of stadium deal*

villaraigosa.jpgSo let's start with the obvious: If Mayor Villaraigosa was aware of plans to sell Anschutz Entertainment Group, why didn't he mention it to anybody, especially the folks who are negotiating the stadium/convention center deal with AEG? From the LAT:

"I'm not going to tell everybody everything we're doing," Villaraigosa said at a City Hall news conference. "Because we want a football team, and a lot of what happens here has got to be negotiated quietly."

Just in case you forgot, Villaraigosa is mayor of the city of Los Angeles - and as such has a fiduciary responsibility to help craft a contract that's in the city's best interest. And wouldn't it be helpful to those who are negotiating said contract if they knew what the mayor knew? More from the Times:

The City Council is nine days from a key vote on the stadium deal, which also includes major renovation of the city-owned Convention Center. When asked whether City Administrative Officer Miguel Santana, the top city negotiator, should have learned about the potential sale of the company sooner, Villaraigosa shook his head no. "I'm the mayor, and I knew," he said.

Here's what Councilman Paul Krekorian said this afternoon:

"Reports that Anschutz Entertainment Group may be sold have validated my insistence that the city slow down the express train of stadium enthusiasm and require ironclad financial safety measures to protect taxpayers. At my urging, fortunately, those protections are now included in the proposal, and the City will not be left holding the bag regardless of any changes in AEG's ownership or financial condition.

Anschutz has assured Villaraigosa that any buyer would have to agree to the terms worked out with the city. But agree how? In writing? With a handshake? What if the buyer doesn't like parts of the deal that AEG cut? Here's another question: What happens about getting an NFL team to L.A.? Last year, AEG CEO Tim Leiweke said it was important to have the stadium deal completed before the beginning of next year because that's when NFL owners need to inform the league of any sale or relocation. That provides enough time to prepare for the following season. But is it realistic to believe that the sale would be done by then? With Anschutz out of the picture, the process might be delayed. And if there's no team for at least another season, does the stadium deal pencil out? The sensible solution is to hold off on the stadium agreement until the AEG situation is resolved. Know who you're dealing with - don't take the word of the guy getting out.

*One more point: Several readers have speculated that the real reason Anschutz wants to sell is that it provides him with the cash to purchase an NFL team - along with having the stadium. There's no indication that this is the plan - and frankly, it seems unlikely considering that Anschutz was reluctant to pursue a stadium deal in the first place. Later, he made all sorts of financial demands in the event that a team became available. In other words, you just don't get the sense he's gung-ho about NFL football. Maybe he's reconsidered, but I wouldn't bet on it.

Wednesday morning headlines

Stocks still sluggish: Slow week continues, though the Dow is up around 40 points.

Patrick Soon-Shiong possible AEG bidder: The L.A. billionaire is making it known that he'd be interested in acquiring the sport-and-entertainment giant (he was part of an investment group that tried to buy the Dodgers). From the LAT:

Other bidders could include Madison Square Garden Co., which owns the iconic New York sports arena and the Knicks basketball team, sports consultant [Marc] Ganis said. The New York company has already pushed westward. This year it paid $23.5 million to buy the Inglewood-based Forum, and it has embarked on a $50-million renovation of the Lakers former home. AEG also is expected to attract intense interest from private-equity firms, which could purchase the company intact and sell it off in pieces.

Fox well positioned for MLB renewal: CBS is no longer interested and NBC's bid has come up short, the NY Post reports. That leaves the league's current partners, Fox and Turner, to work out new deals. ESPN has a separate contract.

Better to buy than rent: That's according to a study of metro areas by online property tracker Trulia, though affordability depends on location. SF and L.A., for example, have only a small buying advantage while Detroit and Oklahoma City has large advantages. (OC Register)

Brown signs workers comp bill: The legislation promises an increase in benefits to permanently injured workers and procedural improvements that are supposed to reduce insurance costs. From Capitol Alert:

The legislation, Senate Bill 863, was hammered out in months of private negotiations between employer and labor union representatives. It was formally carried by Sen. Kevin de Leon, D-Los Angeles, and passed the Legislature in the final hours of the 2012 session despite late-blooming opposition from lawyers who represent injured workers and some medical care and rehabilitation groups.

Early review of iPhone 5: WSJ tech columnist Walt Mossberg likes Apple's smartphone.

The world's most popular smartphone becomes significantly faster, thinner and lighter this week, while gaining a larger, 4-inch screen--all without giving up battery life, comfort in the hand and high-quality construction. That's my quick take on Apple's new iPhone 5, the sixth generation of the iconic device, which goes on sale on Friday. I've been testing the new iPhone for nearly a week and I like it a lot and can recommend it, despite a few negatives, such as a new maps app that has one big plus, but other big minuses. On balance, I still consider the iPhone the best smartphone on the market, especially with its staggering 700,000 third-party apps and a wealth of available content.

September 18, 2012

Report: Anschutz considers selling AEG*

anschutz.jpgThat would be Anschutz Entertainment Group, the L.A.-based sports-and-entertainment empire whose properties include the Kings hockey team (50 percent holding), the Galaxy soccer team, Staples Center, the Home Depot Center, L.A. Live, and many others. The WSJ, citing sources, says that deliberations are at an early stage and that it's possible Denver billionaire Philip Anschutz might decide not to sell the operation. AEG has become a huge force, but Anschutz made his big money in oil and gas. Who knows how this will play out but any sale might complicate efforts to build a downtown football stadium and purchase an NFL team.

*Update: Anschutz has just put out a press release announcing that AEG is on the block. Blackstone Advisory Partners, which handled the Dodgers sale, is being brought on as a financial advisor. As these things go, it's a pretty elaborate release, reading like a long for-sale listing.

The Anschutz Company will undertake the sale to the qualified party best able to reflect the full value of AEG and fully committed to working with AEG's management team as it pursues its long-term business objectives. With this unique international platform, the new owner of AEG will be able to capitalize on the growing global demand and value of live sports and entertainment content linked to important real estate developments on a worldwide basis. AEG's exceptional network of strategically integrated real estate, sports and entertainment assets in key world markets has transformed the business model of live entertainment and sports - and positively impacted whole cities in the process. AEG delivers growth and profitability through its unique combination of venues, content, distribution and services, covering all aspects of production, including content development and ownership, talent management, promotion, ticketing, marketing, and distribution.

**Update: This from Mayor Villaraigosa's office:

"I have worked with both Philip Anschutz and Tim Leiweke for years to bring a football team to Los Angeles. I speak to both of them on a regular basis and I have known about this potential sale for some time. I have the commitment from both of them that this sale will not affect plans for an NFL team to return to Los Angeles in the near future and will not affect my support for moving ahead with Farmers Field and the Convention Center site."

September 17, 2012

Monday morning headlines

Stocks dip: Markets are generally muted in early trading (could be a slow day because of the Jewish holiday). Dow is down 25 points.

Gas update: L.A. area prices actually dropped a couple of pennies over the weekend, with an average gallon of regular at $4.153, according to the Auto Club.

Look for drop in earnings: Corporations are finally feeling the pinch of a sluggish global economy. From the NYT:

After reducing spending and eliminating jobs during the recession, American companies reaped huge gains by keeping expenses down and putting off aggressively hiring new workers as growth slowly returned. Strong profits have also propelled the stock market higher, reassuring investors whose other assets, like real estate, have declined in value over the same period. But while the Standard & Poor's 500-stock index on Friday reached its highest close since 2007 -- after the Federal Reserve's announcement of its latest stimulus effort -- the cycle of steady earnings increases appears to have run its course.

Big demand for iPhone 5: Preorders topped 2 million in 24 hours, with demand exceeding the initial supply. (AP)

Brown's legacy on the line: So says LAT columnist George Skelton about the governor's tax hike initiative.

Prop. 30 actually has a decent chance of passing. Then Brown would be riding tall and living up to all his billing and promise. He'd indeed be the astute old pro we'd hoped for, the rescuer. He would have stabilized the budget and preserved the schools. Meanwhile, remember, he also pushed through overhauls of public employee pensions and workers' compensation insurance. He abolished wasteful redevelopment agencies. And he potentially saved billions by shifting custody of low-level felons from state prisons to less expensive local law enforcement. He'd be in position to focus next year on education reform, a business-friendly loosening of the California Environmental Quality Act and development of renewable energy. But first Prop. 30 must pass.

Romney in town: The Republican candidate speaks to the U.S. Hispanic Chamber of Commerce annual meeting. (KPCC)

Magic talks Dodger chemistry: The team's minority owner says that the summer trades were necessary, even if the early results have been disappointing, From the Daily News:

In basketball, you might make one subtle move and that'll put you to the top. That can happen here if you're on the cusp of winning a title. For us, this team wasn't there, even close to being there. So we had to make the trade to get the nine players. And we're happy. Now, you're right. We do lack the team chemistry. But for the long-term plan, everything's been the right move. We've made the right decisions. We didn't make the trades for this season. We made the trades for next season on, and we feel we're really going to be a good baseball team.

Box office: "Resident Evil: Retribution" claimed the top spot over the weekend, with $21.1 million. The 3D reissue of "Finding Nemo" collected $17.5 million. (THR)

Traffic picks up at Port of Long Beach: Inbound activity was up nearly 3 percent in August compared with a year earlier and outbound was up 5.7 percent. Traffic fell last month at the Port of Los Angeles.

September 13, 2012

Stadium deal could be in trouble, but for the wrong reason

farmers4.jpgI'm not a huge fan of the proposed complex, but I'm not especially fond of extortion either - and that's the kinda, sorta threat that a downtown coalition is throwing around. The Los Angeles Community Action Network wants deep-pocket developer AEG to hand over $2 million a year for 30 years, roughly the life of the stadium. The money would be placed into a housing trust fund for the purpose of somehow mitigating any gentrification-related increase in rents near the stadium. Now, you can conjure up all sorts of reasons for opposing this project - L.A. doesn't need or want it, the city might end up footing part of the bill at a time when it can't afford a pair of shoelaces (even though everyone denies any financial exposure), AEG is a money-grubbing, take-no-prisoners organization that has way too much influence at City Hall. They're all fine reasons. But fears of gentrification? I don't think so. From the Daily News:

Ted Fikre, AEG's chief legal and development officer, said the $60 million figure is "significantly higher" than the $20 million amount sought by the coalition at the start of negotiations. He was unaware of the LACAN's new demands until told by the Daily News on Thursday. The stadium doesn't displace residents, so AEG shouldn't have to pay for a housing trust, Fikre said. Nevertheless, he said, negotiations would continue with the coalition.

The housing activists are part of the coalition that filed suit challenging a state law that shortens the time frame in which developers can be brought to court over an environmental impact report. This lawsuit about lawsuits might seem like a joke, but it threatens to delay - or even kill - the $1.2-billion stadium. From the LAT:

[Natural Resources Defense Council senior attorney David Pettit] and his group support the stadium and are not involved in the case. But he warned that if the coalition prevails, AEG could lose the ability to show the National Football League it had resolved all of the legal issues surrounding its project by March -- just as critical talks on obtaining a possible team are expected to take place. "If that litigation is successful ... it could take down the entire project," said Pettit, who noted his group has been a backer of the stadium "from day one."

September 12, 2012

Red Sox deal looking worse by the day

dodgers9.jpgThree weeks after the blockbuster trade that brought Adrian Gonzalez to L.A., the Dodgers are 6-10 - not quite what the Guggenheim partners had in mind. Someday, Gonzalez and the others - Josh Beckett, Carl Crawford and Nick Punto - might turn out to be productive players, but someday is never the point of a late-season trade. The point is to shore up a team in preparation for the final stretch. And that's not happening, to put it mildly. The Dodgers are in a terrible batting slump, losing last night to the Diamondbacks, 1-0. They're pretty much out of the divisional race, though they could still limp into the wildcard game. Here was my take on this week's Business Update on KPCC:

Steve Julian: Let's also not forget Hanley Ramirez and the other guys picked up this summer. It's a lot of money!


Lacter: It is a lot of money, and it's also kind of a cautionary tale in spending so much over such a short amount of time, not only for pro sports teams but for your typical business owner and manager. Just because you have access to a fat checkbook doesn't mean you're going to use it wisely. It's hard to upsize - in some ways a lot harder than to downsize. Expectations are suddenly raised, the people you hire have to complement the folks already on staff, and of course they need to perform as advertised. You know, the Yankees are always cited as being successful because they have such a large payroll, but money does not guarantee success. Going back 20 years or so, the teams that increased their payrolls from one season to the next improve their record only 50 percent of the time.

Julian: The Detroit Tigers tried that a few years ago.

Lacter: That's right, they added more than $40 million to the payroll in 2008, and wound up winning 14 fewer games the following season. Meanwhile, the 2004 Texas Rangers cut almost $50 million off the books, and won 18 more games the next year. Now, it's entirely possible that the Dodger trades will turn out to be a big plus for the club. But, you do have to wonder about the huge amounts of money being spent by the new owners, Guggenheim Partners. And, you also have to wonder whether these expenses will eventually be felt by fans going to the ballgame.

Julian: But, aren't the new owners really focused on the money from TV rights?

Lacter: They are, and whatever deal they cut will certainly be higher than the $3 billion agreement that former owner Frank McCourt worked out with Fox Sports last year, and which was then nullified by Baseball Commissioner Bud Selig. The numbers now being thrown around over a 20-year period are $5 billion, $6 billion, $8 billion - numbers that a few years ago would have been considered unthinkable. I mean, we are talking about just one team. It's been reported that Fox and the Dodgers have begun preliminary talks about renewing their TV deal (they can't start real negotiating until next month).

Earlier: Bad vibes for rest of Dodger season

August 30, 2012

Dick Clark Productions going to Guggenheim?

dickclark.jpgThe new majority owner of the Dodgers is close to acquiring the Santa Monica-based production company for nearly $400 million, the LAT is reporting. That would be almost double what the current owner paid just five years ago. What's next, Variety for $500 million?

As was the case with the Dodgers deal, rival bidders are saying that the price Guggenheim is paying, if accurate, is out of whack with what the company is worth. Privately held DCP doesn't disclose financial information, but industry executives familiar with the company estimated its annual earnings before interest, taxes, depreciation and amortization (EBITDA) at between $35 million and $40 million, almost double from what it was prior to the Red Zone acquisition. The company also has about $165 million in debt and $18 million in cash. The valuation that Guggenheim is reportedly placing on the company -- 10 times EBITDA -- had other potential suitors shaking their heads. They said a more reasonable price was between $250 million and $300 million.

August 29, 2012

Wednesday morning headlines

Slow-motion stocks After several losing sessions, the Dow is bouncing around the line. Volume-wise, it's been a slow week.

Growth revised upward: The U.S. economy grew at an annual rate of 1.7 percent in the second quarter, slightly higher than the initial estimate of 1.5 percent. From Reuters:

While the composition of economic activity was fairly favorable, growth remains well below the 2-2.5 percent rate required every quarter to hold the unemployment rate steady, which could compel policymakers at the U.S. central bank to offer additional stimulus at their September 12-13 meeting. "It shows slightly better government spending and consumer spending but overall the data suggest the economy stays in slow growth mode and is not likely to change," said Peter Cardillo, chief market economist at Rockwell Global Capital in New York. "This certainly strengthens the hands of the Fed to aid the economy."

Gas update: Little movement in L.A. area prices these last few days, all of it on the upside. An average gallon of regular is $4.154, according to the Auto Club, three-and-a-half cents higher than last week.

Money pouring into state capital: More than $42 million in campaign contributions have been given out in the final weeks of the legislative session and Sacramento Bee columnist Dan Morain says it's hardly a coincidence:

The link between donations and legislative action is clearest at the end of a session. Politicians and the moneyed interests that enable them cannot help themselves. It will take an initiative to fix the problem, although Proposition 32, the bogus campaign finance overhaul on the Nov. 6 ballot, isn't the answer. The bulk of the money that has flowed this month, almost $37 million, has gone to ballot measures. But Gov. Jerry Brown and other politicians are so closely tied to some of those measures that many initiative donations also are made with a purpose, to curry favor.

Pot ordinance could be put off: Opponents of the city's pending ban on medical marijuana dispensaries say they have enough signatures to force a ballot referendum - and if that happens the ordinance, scheduled to take effect Sept. 6, could be temporarily suspended. From the LAT:

Activists say the ban violates a state law guaranteeing patients safe access to medical marijuana, because most people aren't able to grow medical-grade pot. That claim was the basis of a lawsuit filed against the city this month by a medical marijuana trade association that represents patients, dispensaries and growers. The referendum effort has been backed by other groups, including a newly formed labor union of dispensary workers. The groups are planning a news conference on the issue Wednesday morning -- and then to submit their signatures to the city.

ESPN extends baseball deal: The sports network agreed to a $5.6 billion extension of its TV rights agreement with Major League Baseball. That's roughly double what ESPN is now paying. From the NYT:

ESPN is paying a steep increase to hold on to baseball, much as it agreed last year to pay an average of $1.9 billion annually for "Monday Night Football," starting in 2014, up from $1.1 billion. "It is a lot of money," John Skipper, ESPN's president, said about the M.L.B. deal. "We don't do these deals without acutely understanding how to grow our business. In that context, it makes sense to us." He insisted that ESPN would not raise its monthly subscriber fee, now at $5.15, to finance the deal.

Wellpoint CEO resigns: Angela Braly stepped down after heavy pressure from major shareholders unhappy with the health insurer's performance. Wellpoint operates Anthem Blue Cross in California. (NYT)

Snag in Variety deal?: Hedge fund billionaire Marc Lasry was said to have been the likely buyer at between $30 million and $40 million, but the NY Post's Page 6 column says that he has lowered his bid. The paper also says that Ron Burkle has dropped out.

August 28, 2012

Bad vibes for rest of Dodger season

hanley.jpgIt's only two games in a long year, but watching the Dodgers on Sunday and Monday was painful. They had the look of a team that's out of sync, almost lost. On Sunday, 16 men were left on base against a not very good Marlins team, and Monday's 10-0 defeat at hitter-friendly Coor's Field was no better. I'm betting that this is the start of a frustrating month. I'm also betting that the addition of so many high-profile players so quickly might be counterproductive. Look, change has to be managed carefully in any business. It's not just having a fat checkbook - it's knowing how and when to spend the money. It's also gauging chemistry, personality, and drive. The new Dodger owners want a championship badly (it raises the value of the club just in time to negotiate a TV deal), but this group seems like a handful. Josh Beckett was practically thrown out of Boston for his belligerent manner and mediocre record, and Hanley Ramirez (pictured) wasn't exactly the most popular guy in Miami (don't be surprised if he's out of sorts for losing the spotlight to the Red Sox players acquired in the recent trade). Perhaps they were just misunderstood at their previous jobs, but a problem employee at one company often ends up being a problem employee at another. Personalities don't change on a dime. (Remember a guy named Manny Ramirez?) One other problem: spending sprees don't always result in victories. From the WSJ:

Since 1990, teams that increased opening-day payroll from one season to the next padded their win total only 49.5% of the time. In fact, the correlation between spending more and losing less was .06, which represents almost zero relationship whatsoever, according to a study by the Harvard Sports Analysis Collective, an organization of Harvard students and faculty. In this span, for instance, teams that took on more than $20 million extra in salary added just 0.89 win the next season, while the teams that shed more than $20 million added 1.89 wins. From 2003 to 2004, the Texas Rangers took $48.4 million off the books, including getting rid of Alex Rodriguez, Juan Gonzalez and Rafael Palmeiro--that's the biggest downgrade in this study. The Rangers won 18 more games the following year. Meanwhile, when the Detroit Tigers added $42.5 million in payroll from 2007-08, the biggest increase in this study, they lost 14 more games (See: Dontrelle Willis: 24 innings, 0 wins, $7 million).

Let's also not forget that Chad Billingsley, arguably the team's strongest pitcher in recent weeks, is on the disabled list for at least the next couple of weeks. That alone could turn out to be a season killer. Bad vibes.

August 27, 2012

Monday morning headlines

Mixed market: The Nasdaq is being pushed higher by Apple shares (investors reacting to Friday's verdict in the Samsung case). Dow is up a few points.

Hertz buying Dollar Thrifty: The $2.3 billion deal brings more consolidation to the car rental market and gives Hertz more ways to attract business and leisure travelers. (AP)

Diller's IAC buys About.com: The New York Times Co. is unloading the information website for $300 million in cash. From Bloomberg:

About.com, which relies on freelancers to produce stories and how-to videos on topics such as making a stir-fry or preventing a tattoo from stretching, has struggled to attract traffic and advertising dollars. By contrast, New York-based IAC saw revenue from Ask.com and its other search-related sites climb 46 percent to $348.8 million last quarter.

Last week in Sacto: State lawmakers have a lot on their agenda, including public pensions, workers comp, and corporate taxes. From the LAT:

Legislative leaders said they hoped to pass an ambitious agenda aimed at convincing voters that they are responsible stewards of Californians' money. The outcome is likely to set the stage for Gov. Jerry Brown's high-stakes campaign to raise billions of dollars in taxes to close the state's deficit. "The hope is that our work here lays the foundation," said Assembly Speaker John A. Pérez (D-Los Angeles).

Zev's decision on mayor's race: LAT columnist Jim Newton is reminded of Yaroslavky's previous brushes at running.

In the few interviews he gave last week, he emphasized that, although this was not the right time or the right job for him, he would remain civically involved. "I live in this city, care about this city," he said several times. Only when I looked up my story from 1999 did I realize that he used the exact same phrasing then, a reminder of how long he's been weighing this question. Yaroslavsky might have been a good mayor. I, for one, think he might even have been a great one. He certainly would have served with intelligence and independence.

Dodgers in preliminary talks with Fox: They can't formally start negotiating until October, but Reuters reports that any deal to extend the TV rights contract will likely top the 20-year, $3 billion agreement worked out with former owner Frank McCourt - a deal that was rejected by Major League Baseball.

Box office report: Very slow weekend, with "The Expendables 2" at the top of the charts at $13.5 million, An anti-Obama documentary opened at a strong $6.2 million. (LAT)

August 23, 2012

Sacramento Kings headed to Virginia?*

sactokings.jpgThe plan would be for the Maloof family to move to Virginia Beach, Virginia and for Comcast to help build a new sports arena. An announcement could be made as early as next week, according to the Hampton Roads Business Journal, citing sources. You might recall that a possible move to Anaheim fell through - as did a deal between the city of Sacramento and the Maloofs to build a $391 million entertainment complex.

To finance the arena, the Virginia Beach Hotel-Motel Association has indicated it would support a $1 hike in the lodging tax, sources said. In addition, the Atlantic Coast Conference has agreed to place Virginia Beach on its list as a future venue for college ACC conference tournaments. A well-known concert promoter - Live Nation - is associated with the deal for the new arena and the team's relocation to Virginia Beach, sources say. The new arena will be built across from the Virginia Beach Convention Center, adjacent to the former Norfolk Southern Corp. rail track and a proposed site for a light rail station.

Virginia Beach seems like an odd choice, considering how many larger metro areas - Seattle, Tampa, San Diego, St. Louis, Vegas, Kansas City, etc. - don't have an NBA team.

*Statement from the Kings spokesman Eric Rose:

The Kings organization over the last several years has been approached by numerous parties and cities interested in buying and relocating the franchise. The franchise is not going to discuss which cities have approached the organization and are not going to comment on every rumor.

August 10, 2012

Friday morning headlines

Stocks edge lower: Summer doldrums on Wall Street - Dow is down about 30 points.

Gas hits $4: L.A. area prices keep rising - an average gallon of regular rose by another nickel overnight, to $4.013, according to the Auto Club.

Big repair job: Monday's fire at a Chevron refinery in Richmond could keep one of the units shut down for up to three months, Reuters is reporting. All other units at the refinery are operating.

Economists worry about Washington: Growth could be hindered in the coming months by the so-called fiscal cliff of automatic tax increases and spending cuts, warns economists surveyed by the WSJ.

Lawmakers' "hesitation adds insult to injury to an economy already flirting with a stall rate," said Diane Swonk of Mesirow Financial, referring to the slow pace of economic growth so far this year. While the 47 economists surveyed--not all of whom answer every question--expect a slight pickup to 1.8% growth in the third quarter and 2.1% in the fourth--that pace isn't strong enough to bring down the unemployment rate substantially.

Amgen halts cancer study: An outside panel concluded that an experimental drug for pancreatic cancer was unlikely to improve the survival of patients. From the NYT:

The study was in Phase 3, the final stage of clinical trials before a drug maker applies for approval. [Thousand Oaks-based] Amgen said that no safety concerns were raised in the review of the trial -- there simply was not enough evidence that it worked. A separate study of patients with locally advanced pancreatic cancer, which was in Phase 2, will also be stopped. The drug, known as ganitumab and as AMG 479, targets a hormone called insulinlike growth factor 1, which has been linked to cancer.

Dwight Howard to the Lakers: As Kevin posted last night, the All-Star center is coming to L.A. in a blockbuster multi-team trade that sends Andrew Bynum to Philadelphia. (LAT)

Greater oversight of state budget urged: Lawmakers expressed outrage at parks officials under-reporting the size of two special funds by nearly $54 million. From AP:

The revelation of the hidden money has Democratic lawmakers nervous about their chances of passing a ballot measure in November that would increase taxes. On Thursday, Republican lawmakers drew links between the special fund inquiry and the proposed tax hike. "We're losing public trust; we're asking them for money, we're cutting programs, and we've lost trust," said Assemblywoman Diane Harkey.

Health care not being covered: Of the $16 billion in future costs being promised by 20 California cities, $12 billion remains unfunded, according to a study. From California Watch:

Eleven of 20 California cities with the biggest budgets do not set aside funds for future health care costs, the study by California Common Sense found. Those cities - San Francisco, Oakland, Sacramento, Redding, Santa Ana, Long Beach, Glendale, Fresno, Riverside, Pasadena and Santa Monica - work under pay-as-you-go systems, meaning they pay benefits from their current operating budgets and do not accumulate funds for future payments.

Putting squeeze on scalpers: City Attorney Carmen Trutanich wants to bar 17 ticket scalpers from being anywhere near Dodger Stadium, Staples Center, the Nokia Theatre, or other venues in L.A. From the LAT:

It is already a misdemeanor to sell tickets above face value or make such transactions on a public street. Police have tried aggressive enforcement during games and concerts, created special task forces and even used decoys to sniff out illicit sellers. Nothing, he said, seems to work. "These scalpers rip off unsuspecting fans, hurt legitimate businesses and deprive the city of taxes owed to it, which ultimately harms all city residents," Trutanich said Thursday. "They make it more costly for all of us to cheer for our favorite teams."

Carl's Jr. parent pulls IPO: Carpinteria-based CKE Restaurants cited market conditions for cancelling the initial public offering, which had been scheduled for today. Company officials had hoped to raise as much as $230 million. (Nation's Restaurant News)

Santa Anita gets Breeder's Cup: One of the major events on the horse racing calendar is returning to the Arcadia track in 2013 after a four-year absence. (Business Journal)

August 8, 2012

Peter O'Malley reappears at Dodger front office

dodgers8.jpg Now that he's part of a group that bought the San Diego Padres, the former Dodger owner might want to steer clear of Chavez Ravine. But in the weeks following the team's $2.15 billion sale, O'Malley was offering a little front-office advice, something that never would have happened during the Frank McCourt administration. THR's Daniel Miller, who profiles the new group in next week's edition of the Reporter magazine, reports on the O'Malley sighting:

On a hot, cloudless June afternoon, Dodgers president Stan Kasten stands in a chilly Dodger Stadium office having a lively conversation with Peter O'Malley, the team's much-loved former owner. At issue: the eight variations of Dodger blue that now adorn team merchandise. "The shade of blue has changed," notes O'Malley, 74, whose father, Walter, moved the team from Brooklyn to Los Angeles in 1958 and who remains for many fans the strongest link to the organization's storied history. "Wherever you can, you ought to try and make it the same." Kasten agrees it would be good to winnow the blue hues to one. The detail might seem small, but the fact that O'Malley, an infrequent visitor to Chavez Ravine during McCourt's rocky seven-season tenure, is now involved in these kinds of discussions says a lot about how much things have changed in the short time since Guggenheim Baseball Management took over the team.

The owners remain shy on their plans for Dodger Stadium or the land surrounding the facility.

During the off-season, the team is expected to upgrade the stadium's water and power systems and improve mobile phone service by adding WiFi to the notoriously technology-unfriendly ballpark. To that end, on Aug. 6, the Dodgers hired Janet Marie Smith, an executive who has worked for teams including the Baltimore Orioles and Boston Red Sox, to oversee upgrades to the stadium. Bigger changes include a potential $100 million-plus renovation that might add more kid-friendly amenities, new restaurants and a Dodgers museum. "I think more and more, fans expect, and fans are better served by, additional things in ballparks," says [Dodger president Stan] Kasten. But [minority investor Peter] Guber, CEO of Mandalay Entertainment Group, cautions that the new owners won't rush to jump into a redevelopment plan: "All of us made our money the old-fashioned way -- we've earned it hard, so we spend it carefully."

August 7, 2012

Tuesday morning headlines

Stocks on a roll: Fed official turns up the heat by calling for the central bank to begin pumping money into the system. Dow is up 80 points.

Steady job growth forecast: Look for a continuation of the statewide recovery, according to Chapman University. Its employment Indicator is 110.7 (anything above 100 indicates job growth) From the OC Register:

Statewide construction spending, which was in negative territory on the index for 4½ years, turned positive in the third quarter of last year and appears solidly in recovery. Spending increased 8.1% in the second quarter, up from 7.1% in the first three months. Despite worries about slowing growth oversees, California exports also rose -- up 4.3% in the second quarter compared to 4% in the first quarter.

DreamWorks Animation plans Chinese theme park: The Glendale-based company and a group of Chinese partners will develop a cultural and entertainment district in Shanghai. From the NYT:

The Dream Center, a riverfront complex that is expected to cover six large city blocks, has ambitions to rival the Broadway theater district in New York and the West End in London, with theaters, performance halls, restaurants, shops and an entertainment zone with a "Kung Fu Panda" theme. The entertainment district is expected to be completed in 2016, at the same time a $4.4 billion Disneyland theme park is set to open in Shanghai.

Bummed about helicopter noise: Valley residents packed an FAA hearing to complain. From the Daily News:

The power to restrict aircraft lies with the FAA. On Monday, its officials were listening. Acting upon a request by Berman, the federal transportation agency said it would accept testimony from residents and helicopter industry groups. A report on how to quell the noise is expected within a year. Regulations may be soon to follow. "We want to examine every remedy we can for (helicopter) noise," said FAA Regional Administrator Bill Withycombe, who was joined by a dozen other FAA officials. "We are here tonight to listen."

Final price for Occupy L.A.: City officials now say it cost $4.2 million in services and overtime, way more than the original estimate. (Daily News)

Padres sold to O'Malley group: Other investors include California beer distributor Ron Fowler and golfer Phil Mickelson. The purchase price of $800 million would include a 21 percent stake in Fox Sports San Diego. (Bloomberg)

August 1, 2012

Wednesday morning headlines

Stocks back up: Slow-motion week continues as investors wait for Fed announcement later today and employment numbers later this week. Dow is up 25 points.

Moderate hiring in July: Businesses added 163,000 jobs last month, according to payroll provider ADP, which is slightly below the June numbers. The Labor Department offers a more complete picture on Friday. (AP)

Moving back home: L.A. ranks among the top metro areas that had a proportionally large number of young adults living with their parents during the recession. From the LAT:

Nearly 1 in 3 25- to 29-year-olds in Southern California lived at home at some point between 2007 and 2009, according to the report released Wednesday by Ohio State sociologist Zhenchao Qian. That compares to 19% for that age group nationwide.

Mixed bag on car sales: Chrysler saw a 13 percent increase in July, but GM was down 6.4 percent and Ford was down 3.5 percent. Slower sales to rental fleets and other business customers were cited. (NYT)

Breaking even on Olympics: NBC had been expected to lose money, but the network is selling more ads and ratings are up. (AP)

Indictment of ex-union leader: Tyrone Ricky Freeman is being charged with embezzling tens of thousands of dollars from the union that represents home healthcare workers. (LA Observed)

Campaign coffers keep filling up: Councilman Eric Garcetti and City Controller Wendy Greuel have each raised more than $2.2 million in the mayor's race. Councilwoman Jan Perry has raised roughly half that amount. (LAT)

Changes at Academy: Hawk Koch, the son of former president Howard Koch, takes over as head of the Academy of Motion Picture Arts and Sciences. Koch replaces Tom Sherak, whose term was up after three years. From the LAT:

Sherak has left the academy in strong financial shape -- he recently led the organization's renegotiations for both the Oscar telecast rights with ABC and its 20-year deal with the CIM Group to keep the ceremony at the Hollywood & Highland Center. The president's primary role is to make sure that the chief executive, Dawn Hudson, and her staff are following the lead of the board. Although the position used to be mainly symbolic, under the tenure of Sherak, and his predecessor, Sid Ganis, the job has become much more active.

July 26, 2012

Thursday morning headlines

Stocks taking off: After several down days, the Dow jumped more than 200 points in the opening minutes and is now up about 175 points.

Facebook earnings day: The first post-IPO look at the social network company. Stock is trading at around $27. (Breakout)

Big drop in jobless claims: Weekly filings for unemployment benefits plunged 35,000 to 353,000, but economists warn that the figure may be distorted by seasonal factors. (AP)

Penney prices to come down: Another change in strategy for the struggling retailer. This one involves deep price cuts across much of its merchandise, the WSJ is reporting.

Under the new policy, which kicks off in August, Penney will get rid of monthlong specials that cut prices of select items by 20% to 29% and instead will permanently mark down a large amount of merchandise in stores by similar amounts, the people said. The move is an acknowledgment that the department store chain needs deeper price cuts to stem a dive in sales caused by the company ending its ceaseless sales and coupons. The strategy caused revenue in the company's fiscal first quarter to fall by one fifth.

NBC books $1 billion in Olympic ads: That covers television and digital sales and it will help recoup the $1.18 billion that was paid for media rights. From the FT:

NBC is planning its most extensive broadcast of the games to date. Kicking off with the opening ceremony on Friday night, NBC will present more than 5,535 hours of coverage across its television networks and digital properties. NBC will live stream every athletic competition - or 3,500 hours - to the web. For the 2008 Beijing Summer Olympics, NBC live streamed 2,200 hours online.

Underwater in downtown L.A.: Owners of nearly 80 percent of the condos and lofts in the 90014 ZIP code owe more on their properties than they're worth, according to Zillow. That compares with the nationwide figure of 31 percent. From the Weekly:

Downtown is having a harder time bouncing back than most areas because of the people who want to buy: mostly young, urban pioneers. They tend to have too-small down payments, making them high-risk. Combined with the fact that interest rates of late have sunk to record lows, lenders aren't interested. Now, downtown is filled with underwater owners who can't sell, and renters in former condos that didn't sell.

Support for separating LAX runways: A coalition of business and labor leaders say that the current layout on the north side of the field is obsolete because it doesn't accommodate larger aircraft. From the Daily Breeze:

For now, airplanes maneuvering LAX's airfield must use paths that crisscross the middle of two parallel runways that are separated by 700 feet. The Federal Aviation Administration has long stated that the runways need more separation to reduce the risk of collisions between arriving and departing aircraft. The airport's pending draft environmental impact report is expected to outline options that call for increasing the separation between the northern runways by 100, 260 and 350 feet to make room for a centerline taxiway.

Register sale is complete: An investment group led by Aaron Kushner is also purchasing the other six remaining papers in the Freedom Communications chain. The Freedom name will be kept. Terms were not disclosed. (OC Register)

Oxy earnings drop: Lower crude prices resulted in a 27.7 percent decline in second-quarter net income. But L.A.-based Occidental Petroleum reported a second straight quarter of record oil production. (LAT)

MGM considers going public: The parent company of the movie studio has hired JPMorgan Chase and Goldman Sachs to manage an IPO, Bloomberg is reporting. MGM filed for bankruptcy in 2010 after turning down a takeover bid from Lions Gate.

July 23, 2012

Despite NCAA penalties, Penn State games will still be on TV

pennstate.jpgIf the college football honchos are so intent on teaching the school a lesson, why allow games to be nationally or regionally televised? Looking at the first three games of the upcoming season, Penn State will be on either ESPN or ABC (rest of the schedule hasn't been announced). From ESPN:

There was speculation the Big Ten might try to hit Penn State where it hurts the most: TV revenue and opportunities. The league could have taken away some Big Ten Network shares or kept the Nittany Lions off television in its nonconference games. The Big Ten Network reportedly paid each school about $7.2 million last fiscal year. But ultimately, [Big Ten commissioner Jim Delany said], the league felt the school was being punished enough by the NCAA sanctions (which included a $60 million fine) and the $13 million loss of bowl proceeds. "We thought, all things taken together, that what had been done was sufficient," Delany said, "and that TV and the playing of actual games, along with other privileges of membership, should not be affected."

From 2005:

July 16, 2012

Dodgers not worth anywhere near the $2 billion that new owners paid

kemp.jpgWell, that's according to the new Forbes list of the world's 50 most valuable sports franchises. In the top spot - again - is Manchester United, which is worth $2.23 billion, according to the magazine. Another soccer dynasty, Real Madrid, is second, at $1.88 billion, followed by the NY Yankees, at $1.85 billion. The Dodgers are in sixth position, at $1.4 billion, below the Dallas Cowboys and Washington Redskins. In fact, the smart money seems to be with the NFL. From Forbes:

All 32 NFL teams made the cut, led by the Dallas Cowboys, worth $1.85 billion, tied with the New York Yankees for third overall. The Cowboys are the kings of the NFL thanks to their $1.2 billion stadium, which generates more than $100 million annually from premium seating and nearly $60 million from sponsors like AT&T, Bank of America, Ford Motor and PepsiCo. The future looks even brighter for NFL teams thanks to a new labor agreement, as well as a new round of TV contracts. The league and its players endured a four-month lockout last year, but no regular-season games were lost. The new collective bargaining agreement ensures labor peace for 10 years and gives owners a bigger piece of the pie, as players settled for a salary cap based on 48% of total revenues versus roughly 54% in previous years.

#1 Manchester United ($2.23 billion)

#2 Real Madrid ($1.88 billion)

#3 Dallas Cowboys ($1.85 billion)

#5 Washington Redskins ($1.56 billion)

#6 Los Angeles Dodgers ($1.4 billion)

#6 New England Patriots ($1.4 billion)

#8 Barcelona ($1.31 billion)

#9 New York Giants ($1.3 billion)

#10 Arsenal ($1.29 billion)

By the way, the Lakers are ranked only 35th, with a value of $900 million.

July 9, 2012

Possible O'Malley deal for S.D. Padres has historic Dodger angle

telethon.jpgAs several readers point out, this goes back to when Peter O'Malley's father Walter was negotiating with the city of L.A. to build Dodger Stadium. The city made a sweet offer: More than 300 acres in Chavez Ravine, $2 million to level the land, nearly $3 million in access roads to the freeways, and half interest in any oil that was discovered. In exchange, O'Malley would give the city Wrigley Field. The proposed agreement, which required voter approval, went on the ballot in June 1958. It was opposed by John Smith, who with his brother owned the San Diego Padres of the Pacific Coast League. Smith was concerned that bringing major league baseball to California would diminish the Pacific Coast's fan base and lead to additional MLB franchises, including one in San Diego. In his book, "The Giants and the Dodgers: Four Cities, Two Teams, One Rivalry," Andrew Goldblatt picks it up from there:

On the Sunday before the election, Dodger supporters sponsored a five-hour telethon hosted by Joe E. Brown and featuring, among others, comedians Jack Benny, George Burns, Jerry Lewis, and Danny Thomas; actresses Debbie Reynolds, Lorraine Day (Leo Durocher's ex-wife); former Dodgers Chuck Connors and Babe Herman; and retired umpire Beans Reardon. This would be privately financed and cost taxpayers nothing, they said, in contrast to San Francisco shelling out millions for the Giants' new digs. Dodger Stadium would generate $300,000 a year in tax revenues. The city would gain nine acres in South Central plus a new recreation area in Chavez Ravine worth $500,000.

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"I think we were saved by the power of television," [Dodgers General Manager Buzzie] Bavasi admitted as Proposition B passed by fewer than 25,000 votes (52 percent). Bavasi then crowed that the deal was a giveaway, likening it to the purchase of Manhattan from the Indians.

The further irony is that 10 years later Bavasi became president and part owner of the expansion San Diego Padres. As for the proposed sale, the O'Malley family continues to negotiate with Padres owner John Moores, with the window extended for at least 10 more days. From Reuters:

"The sale is advancing, but it's nowhere close to being completed," a source said. "Some details of the negotiations have slid backward. But overall, there continues to be progress toward an agreement in a very complicated transaction. Some of it is being renegotiated." The negotiations are complicated by Moores being out of the country on vacation.

Monday morning headlines

Stocks extend losses: Investors prepare for what could be a disappointing earnings season. Dow is down 60 points.

Long wait for bullet train?: Between lawsuits and funding, it could be a while before California's high-speed rail project takes shape. From the WSJ:

Actual construction of the line--which state officials have hoped would begin this year--could be delayed in part by farmers who object to the California High-Speed Rail Authority's plan for the construction of the first phase of the 800-mile route through their fields in the state's Central Valley. The farm bureaus in Merced and Madera counties in June filed suit in state Superior Court in Sacramento asking a judge to nullify an environmental-impact report the rail authority certified as one of the final steps toward breaking ground on a 60-mile stretch between Merced and Fresno.

L.A. firm cuts deal with Boeing: Air Lease is ordering 75 of the manufacturer's redesigned 737 aircraft called MAX. Contract is worth $7.2 billion. From AP:

Los Angeles-based Air Lease, which buys planes and leases them to airlines, also has the right to purchase an additional 25 of the planes. The order will take several years to deliver. ALC has ordered a total of 170 airplanes from Boeing. Although the order has a list price of $7.2 billion, purchasers rarely pay the full price for an order of this size. "The 737 MAX is an excellent addition to our portfolio and the ideal complement to our growing fleet of Next-Generation 737-800s," said Steven Udvar-Hazy, chairman and CEO of Air Lease. "The 737 MAX represents a step-change improvement that our airline clients need to compete in the future."

IndyMac lawsuit settled: The class-action suit alleges that executives of the former Pasadena-based lender engaged in securities fraud. From the WSJ:

In a settlement outlined in U.S. District Court in Los Angeles, IndyMac's insurers will pay $6.5 million in cash to investors who had sued the company's leaders for securities fraud as the nation's housing bubble collapsed in the spring of 2008. IndyMac shareholders sued [ex-Chief Executive Michael Perry] and former finance chief Scott Keys in June 2008 over allegations they had misled investors about the failed mortgage lender's deteriorating financial condition. The following month federal bank regulators seized and closed IndyMac's thrift, IndyMac Bank.

O'Malley family close to Padres deal: Purchase price, according to Fox Sports, is $800 million,including $200 million for a portion of the team's equity stake in FOX Sports San Diego.

Box office recap: "Amazing Spider-Man" was tops over the weekend, grossing $65 million. After that came "Ted" ($32.6 million), "Brave" ($20.2 million), and "Savages" ($16.2 million). (THR)

Dodger attendance is up: At the All-Star break, attendance is averaging 41,000, up about 5,000 from last season. (KPCC)

June 13, 2012

Does Kings championship get you in the mood for some football in downtown L.A.?

cup.jpgMe neither. Actually, the whole stadium thing is running into turbulence on several fronts, from the lack of an NFL owner willing to move to L.A. (and probably sell at least a portion of his team) to concerns by environmental groups about the number of cars that would be going to the stadium on game days. Last week, organizers of the E3 trade show threatened to leave L.A. unless it received some accommodations during the time it will take to construct the stadium - assuming the stadium gets constructed. (Anschutz Entertainment Group, which wants to build the facility, also plans to overhaul the convention center.) None of this will change enough minds on the council to block this risky project, but it probably should. Also in this week's update with Steve Julian is a look at the Kings' new TV deal. Available at kppc.org and on podcast (Business Update with Mark Lacter)

Lacter: The [Kings] agreement is worth at least $250 million, which is about the biggest local cable contract for a hockey franchise (even though the Kings have some of the lowest ratings for any team). And in case you're wondering, it didn't have anything to do with the Kings being in the Stanley Cup Final. It's more of an insurance policy for Fox Sports West.


Julian: They're about to get some competition...

Lacter: That's right - starting next fall, Time Warner Cable will be launching two cable sports channels that will feature the L.A. Galaxy soccer team, the L.A. Sparks woman's basketball team, and most importantly, the Lakers.

Julian: And this covers all Lakers games - KCAL Channel 9 is out of the picture?

Lacter: Yes - and the Time Warner channel could get even bigger if it cuts a long-term deal with the Dodgers. The Dodgers contract with Fox will be expiring at the end of next season, and the question is whether the team will renew its deal with Fox, move over to Time Warner, or maybe even start its own Dodger Channel. Sports remains the most lucrative type of programming, and by cutting long-term deals, such as the one with the Kings, cable channels are guaranteed both advertising revenues and subscription revenues. Of course, all this is going to cost the local sports fan. No specifics announced so far, but expect your cable bill to go up.

June 11, 2012

Monday morning headlines

Stocks slide into the red: So much for the Spanish bailout rally. Dow is down 40 points.

Skepticism over Spain: Investors are starting to question how the $125 billion bailout would work and how effective it would be. From AP:

Investors appear to be growing increasingly concerned that by taking on so much new debt via the rescue package Spain's ability to make interest payments on its debt could be strained dangerously. "As much as the perception of the situation in Europe may have changed, plenty of risk still remains in place, with question marks over the ability of Spain to repay the debt, especially, if the country fails to get back on the growth path, the outcome of the upcoming Greek elections and the perception of situation in Italy," Anita Paluch of Gekko Global Markets wrote.

Commerce Secretary involved in hit-and-run: John Bryson suffered a seizure in connection with two car crashes in the San Gabriel Valley over the weekend, a department spokeswoman told the LAT.

Bryson had no security detail with him during the crashes because he was driving his own vehicle on personal time, sources said. Bryson, 68, was cited for felony hit-and-run following the Saturday incidents but was not booked in jail because he was taken to an area hospital. Authorities said he was cooperative with detectives, and drugs or alcohol do not appear to have been a factor.

Deadline looms on state budget: Gov. Brown and Democratic lawmakers have yet to resolve differences on health and welfare programs. The two sides are looking to reach a deal by Friday. From the Sacramento Bee:

Democrats no longer need Republicans to pass the budget, thanks to a 2010 initiative allowing majority-vote approval. They do need Republican votes to approve tax increases, but have opted instead to go directly to voters for a November tax hike on sales and high-income earners to raise $8.5 billion. Brown and Democratic lawmakers are on the same page except for about $2 billion in cuts to programs for the poor, [Senate President Pro Tem Darrell Steinberg] told The Bee.

Getting tough on welfare: L.A. County officials want to make sure payments only go to those who meet residency and work requirements. From the LAT:

The controversy over the proposed measures follows months of internal debate among board aides and top county managers over the reasons for a dramatic increase in the welfare rolls. The county's monthly general relief caseload surged from an average of 58,599 in 2007 to more than 106,000 over the 12 months ending in June 2011, increasing the program's costs 85% to $275 million. Supervisor Don Knabe argues more needs to be done to "shore up program integrity." He cited a new report by county Auditor-Controller Wendy Watanabe that estimated $850,000 a year could be saved by identifying applicants who claim to be homeless when they are living outside the county, with relatives or in jail.

Bankruptcy judge holds off Tribune Co. decision: He'll be writing an opinion on the reorganization plan, delaying approval for several more weeks. The company has been in Chapter 11 protection for three-and-a-half years. (Chicago Tribune)

Box office report: "Madagascar 3: Europe's Most Wanted" was tops this weekend at $60.4 million, followed by Ridley Scott's sci-fi epic, "Prometheus," at $50 million. (THR)

Rose Bowl renovation over budget: Unexpected construction setbacks are blamed. Remodeling might not be finished until late 2014, about a year longer - and $35 million pricier - than planned. (LAT)

Metrolink fares going up: Average increase will be 7 percent, effective July 1. The amount will vary depending on the route and the type of ticket. (LAT)

June 4, 2012

Councilman wants more specifics on downtown stadium plan

This doesn't sound like a dealbreaker, but the draft environmental impact report prepared by developer Anschutz Entertainment Group didn't provide enough details for Councilman Bill Rosendahl on traffic congestion and the project's effects on nearby neighborhoods. From the LAT:

In a letter to Anschutz Entertainment Group on Monday, Councilman Bill Rosendahl asked the developer to make clear how it would minimize car trips to the stadium on game days and make firm commitments to create park-and-ride facilities and ticket bundling programs, which would include public transportation fares in game ticket packages. He complained in an interview that a draft environmental impact report commissioned by the developer "is too vague and doesn't get into the specifics" on those matters.

Rosendahl's letter comes after concerns were raised by the Natural Resources Defense Council, which had supported state legislation that gave AEG special treatment in the courts. The NRDC isn't happy with the lack of specifics on the impact of car trips to and from the stadium.

Monday morning headlines

Mixed market: The Dow was on the plus side for a bit, but now it's down about 10 points. There's just very little enthusiasm to buy stocks.

Why it's so hard to solve economic puzzle: The basic problem, says NYT columnist Floyd Norris, is that national governments are weak. Even stalwarts like China and Germany are showing vulnerabilities.

There is no doubt that some countries could not afford to bail out their banks again; some, in fact, now rely on those same banks for loans to keep the governments functioning at a time when private investors are unsure about their creditworthiness. The president of the European Central Bank, Mario Draghi, suggested last week some type of common European deposit insurance and bank regulation, but there seems to be no consensus. Nearly every major government in Europe has been thrown out by unhappy voters when an election rolled around, the latest being France. It is not a matter of left versus right.

Remaking Grand Avenue plan: Developer Related Cos., which had designs on turning the area near Disney Hall into an L.A. "Champs Elysees," is now thinking smaller. From the LAT:

Bill Witte, president of Related California, said that the firm was working to adjust its plans to better reflect market conditions, and that its "dimensions, scope and scale" could be adjusted. He did not reveal specific details but suggested the new plans would be aimed at getting the project off the ground. "We still believe we can create some of the highest values downtown....But do I think we have to be a little bit less ambitious? Yes, I would agree with that," Witte said. "The city's and the county's expectation is that they want something with vision and that is doable. I don't think anybody is interested in pie-in-the sky talk."

Temporary relief for local redevelopment: The California Department of Finance is providing $318 million to the city of L.A. through the end of the year for ongoing projects - including $6 million for a Grand Avenue mixed-use development and $8 million for billionaire Eli Broad's planned Grand Avenue art museum. (Business Journal)

Thumbs down on high-speed rail: Nearly six in 10 California voters said they oppose funding a bullet train between Northern and Southern California - a turnabout from the 2008 passage of a ballot proposition to borrow $9 billion for the project. From press release:

"California voters have clearly reconsidered their support for high-speed rail," said Dan Schnur, director of the USC Dornsife/Los Angeles Times Poll and director of the Unruh Institute of Politics at USC. "They want the chance to vote again -- and they want to vote no. The growing budget deficit is making Californians hesitant about spending so much money on a project like this one when they're seeing cuts to public education and law enforcement. But they also seem to be wary as to whether state government can run a big speed rail system effectively."

Kings reach TV deal with Fox Sports: The agreement guarantees the team about $250 million, the LAT is reporting, and keeps the Kings on Fox Sports West through 2024.

The Kings' television windfall has less to do with their Stanley Cup run than with the fractured cable sports landscape in Southern California. With Time Warner Cable swiping the Lakers from Fox and launching two sports channels, the Kings now have joined the Angels in leveraging the threat of jumping to TWC into a fat new deal to stay with Fox.

Stadium committee meets today: City Planning Department officials will review the proposed downtown football stadium and convention center revamp with the City Council's ad hoc panel..Session starts at 10:30.

George Lucas steps aside: Veteran producer Kathleen Kennedy has been named co-chair of Lucasfilm Ltd. and is expected to succeed Lucas at his Bay Area studio. Lucas plans to CEO for at least another year. (LAT)

Box office report: "Snow White and the Huntsman" topped the movie offerings with an opening weekend of $56.3 million. In second position domestically was "Men in Black 3," at $29.3 million. (THR)

More insurance rebates: Anthem Blue Cross, Blue Shield of California and Kaiser Permanente will be handing out more than $50 million to their policyholders in the state. From the LAT:

Not all of an insurer's policyholders will get rebates, and the amounts will vary widely. Lawmakers and consumer advocates pushed for the rebates as part of the 2010 Affordable Care Act to ensure that companies aren't raising rates to pay more for executive salaries, shareholder dividends and other expenses unrelated to customers' care. They also hoped these rules would hold down future rate increases and force insurers to squeeze out excess costs.

State lawmakers get back to the budget: They need to cut $8 billion in health and welfare programs, and state worker compensation, among other items. (KPCC)

May 30, 2012

Dodgers on track to make lots of money this year

kemp.jpgGood news for the new owners - the team's operating income is expected to be north of $20 million, up from just $1.2 million last season, reports Forbes sports writer Mike Ozanian, citing sources. Only the Cubs and Cardinals are likely to earn more without the aid of revenue-sharing. Attendance is way up this season - averaging over 39,000 per game - though it obviously doesn't hurt that the Dodgers have the best record in baseball. Last year's team was unimpressive almost from the start, and of course there was all the fallout from Frank McCourt's divorce. This season's profits don't even factor in the potential windfall from a pending media deal that will allow the new owners, Guggenheim Partners, to keep more money than other teams with regional sports networks.

Report: Feds launch criminal investigation into Frank McCourt

mccourt.jpgThey're looking at possible tax evasion and other financial misconduct when McCourt owned the Dodgers and associated companies, the Daily Journal is reporting, citing sources. The investigation, which is said to be in the early stages, has been turned over to prosecutors in the tax division of the Los Angeles U.S. attorney's office. They've been sending subpoena letters over the past several months. From the Daily Journal (no link):

Numerous questions involving Dodger-related finances arose during the McCourts' closely watched divorce proceedings. Testimony during the case revealed that companies controlled by the McCourts paid two adult sons, Travis and Drew, a combined $600,000 annually despite one son working at Goldman Sachs in New York and the other attending Stanford University full-time. Jeff Ingram, one of Frank McCourt's financial advisors, testified that the couple used the Dodgers and other businesses as a "credit card."

McCour has hired defense lawyer David Scheper, former chief of the criminal division in the U.S. attorney's office. Another McCourt attorney said that the former Dodger owner is "not a target, not a subject" of the ongoing investigation.

May 29, 2012

How football stadiums can turn into financial disasters

farmers2.jpgThey're getting more expensive to build and operate - and increasingly, local and state governments around the country are being asked to pony up. It's often not in the form of a direct taxpayer subsidy (you can't get away with that in these fiscally challenging times), but rather hotel taxes and other incentives that eventually funnel back to the developer or team owner. Let's also not forget sky-high ticket prices. All of which is another reason why the proposed downtown stadium needs a close and unhurried look. The Atlanta Journal-Constitution has a good explainer on what's going on. Some snippets:

Experts say unrealistic revenue projections and the skyrocketing construction cost of sports stadiums, especially football behemoths, is making it increasingly hard for the facilities to generate enough cash to keep pace with expenses, namely debt service. That has spelled trouble for some cities where the new facilities have been paid for with a blend of public and private dollars. Indianapolis has hiked tourism-related taxes and Cincinnati is selling a public hospital to pay for flashy new arenas years after they were built.

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Even the Super Bowl, which the NFL has used recently as a carrot to convince cities to build new stadiums, has come with a price tag rather than a profit. Indianapolis, which hosted the nation's most-watched sporting event in February at Lucas Oil Stadium, had expected to spend $450,000 more on the game than it made in revenue, mostly because of public safety expenses. The city revealed earlier this month that figure was closer to $1.3 million. "The cost of big stadiums have gone up exponentially in the last two decades," said Robert Boland, a professor of sports management at New York University's Tisch Center for Hospitality, Tourism and Sports Management. "That has created a challenge for officials to make revenue projections, which are getting harder and harder to meet."

[CUT]

Despite the economic realities, cities continue to pursue new stadiums because of an industry "arms race," the experts said. Owners don't want to be last on the Forbes list of "most valuable teams" and elected leaders don't want to be the one who loses a team to another city while in office. They will work to convince the public that the benefits outweigh the risks and that they have the formula for success. "In part, it reflects the import some people put on having a major league sports team," said Heywood Sanders, a professor of public administration at the University of Texas at San Antonio. "Los Angeles has not died because it does not have the Rams."

May 23, 2012

Wednesday morning headlines

Stocks resume slide: Attention is focused on what will happen with Greece (and Spain) and how it might impact the euro zone. Dow is down 155 points.

Facebook stock is up: Well, it wasn't going to keep falling forever. Pickup this morning is 2.7 percent, to $31.81 a share.

Facebook, banks sued over IPO: A group of shareholders claims that the company's discouraging growth forecasts had been hidden from many investors. From Reuters:

Shareholders said research analysts at several underwriters had lowered their business forecasts for Facebook during the IPO process, but that these changes were "selectively disclosed by defendants to certain preferred investors" rather than to the public generally. "The value of Facebook common stock has declined substantially and plaintiffs and the class have sustained damages as a result," the complaint said.

Prepping for a Greek exit: Euro zone officials have told their members to develop contingency plans in case Greece decides to bail - an increasingly likely prospect. From Reuters:

Despite fears Greeks could open the exit door if they vote for anti-bailout parties at a June 17 election, Spain, where the economy is in recession and the banking system is in need of restructuring, is at the frontline of the crisis, with concerns growing that it too could need bailing out.

Congressional Budget Office warns of recession risk: The combination of big tax increases and spending cuts could lead to another downturn in 2013, according to the nonpartisan office. From the NYT:

Avoiding that danger in the short run, by extending tax cuts and repealing automatic spending cuts, would hold its own economic perils for the long term by adding to annual deficits, the budget office said. It suggested a combination of higher deficits in the short term with adoption of tax and spending policies meant to gradually reduce annual deficits later in the decade.

New rules on prepaid debit cards: They've been lightly regulated, which is one reason the cards are popular with banks. Under the proposal, companies would be required to reimburse consumers for unauthorized charges. (DealBook)

Brown's three-pronged dilemma: In trying to solve the budget crisis, the governor faces challenges on several fronts, says Sacramento Bee columnist Dan Walters:

He must not only persuade voters to pass his sales and income tax package, but, implicitly, persuade them to reject a rival tax measure just for schools. Meanwhile, Brown is pressing liberal Democratic legislators to ignore their political DNA by making deeper cuts in health and welfare programs, not only to close the deficit but to bolster appeals to voters for new taxes. "It's not easy," Brown told hundreds of business and civic figures gathered Tuesday in Sacramento for the annual Host Breakfast.

Environmental group not happy with stadium plan: The Natural Resources Defense Council, which supported legislation to expedite construction of Farmers Field, now says that the environmental impact report failed to fully analyze health risks created by cars that would travel to and from the 72,000-seat facility. From the LAT:

Other organizations offered their own complaints. In a 77-page letter, the advocacy groups Public Counsel and Legal Aid Foundation of Los Angeles said the stadium analysis falls "far short" of requirements in the state's environmental law. They said the report does not back up AEG's claim that the stadium would "provide economic development opportunities" to residents of Pico-Union and South Los Angeles. Because of the expedited timeline for court challenges, AEG will not feel as much pressure to address the issues now being raised by the public, said Kathryn Phillips, director of Sierra Club California.

Jump in new-vehicle registrations: Industry group reports an 18 percent increase in the first quarter compared with a year earlier. (Sacramento Bee)

Government loses big portion of its IndyMac case: A a federal judge threw out many of the fraud allegations against the CEO of the onetime Pasadena mortgage lender. From the LAT:

The SEC alleged that [Michael] Perry allowed false or misleading statements to be made to investors about the company's financial condition, including the omission of material information about the bank's deteriorating condition as the real estate market crashed. But [U.S. District Judge Manuel Real] ruled that in five instances, the company's regulatory filings didn't contain any false or misleading statements to investors and didn't omit pertinent information.

All Olympics, all the time: NBC plans more than 5,000 hours of coverage on its networks this summer, more than twice the number during the 2008 Beijing games. (The Wrap)

May 22, 2012

Golden State Warriors returning to SF

warriors.jpgTeam owners Peter Guber and Joe Lacob are announcing plans to build an arena on Piers 30-32, near the foot of the Bay Bridge (piers, by the way, that are literally crumbling). It will be privately financed and should be ready in time for the 2017-18 season - assuming the owners get through all the SF political hassles. The Warriors have been playing in Oakland for the past 41 years. From the SF Chronicle:

Call them crazy or incredibly courageous, but Warriors owners Joe Lacob and Peter Guber - and team President and CEO Rick Welts - are certainly quick moving, big spending, risk taking, enamored with San Francisco and filled with big ideas. They're perhaps the counterpoint to the more conservative and careful York family, who own the San Francisco 49ers football team and are moving it to Santa Clara. "You don't achieve success by standing still," Lacob said in an interview with The Chronicle in his corner office at Warriors headquarters in downtown Oakland. "You really have to place a few bets." What the Warriors lack in success and swagger on the court, their owners and president make up in spades.

Guber, of course, is the Hollywood producer and former CEO of Sony Entertainment. But he's increasingly known as a sports mogul, especially after taking a minority stake in the Dodgers.

May 18, 2012

GM drops out of Super Bowl advertising

silverado.jpgThis is a surprise considering that event-type advertising is considered so beneficial - and there's no bigger television event than the Super Bowl. But GM's marketing chief says that the costs are just too high. Next year a 30-second spot is expected to sell for $3.8 million. In another surprise earlier this week, GM said it would no longer buy ads on Facebook, and instead rely on the site's free content. From the WSJ:

Helping fuel rising costs has been Advertisers' willingness to pay higher rates to secure time on sports programming is adding fuel to those rising costs. With audiences fragmenting among hundreds of channels and alternative entertainment options such as social media and online viewing, football particularly is one of the few programs that still draws tens of millions of viewers who watch live. That gives the networks much-needed leverage with advertisers. GM's withdrawal suggests however that there could be a limit to what marketers are willing to pay.

From Reuters:

One of GM's four TV ads during this year's game depicted an apocalyptic scene in which some Silverado owners escape death and make it to a prearranged meeting point. But a friend who drives a Ford pickup fails to arrive. The ad, which played off the Mayan culture's prediction that the world would end in 2012, rankled No. 2 automaker Ford, which called on GM to pull the ad. GM refused.

Of course, just because GM isn't advertising next year doesn't mean it won't advertise the year after. The company pulled out of the Super Bowl in 2009 because of its financial troubles, but then returned two years later.

May 17, 2012

Thursday morning headlines

Stocks still falling: They've been down all but one day this month and today is looking like more of the same. Dow is off 40 points.

Jobless claims steady: Weekly filings were unchanged at 370,000, another sign that for whatever reason employment growth has slowed. (Reuters)

Mortgage rates fall to 3.79 percent: That's a record low for a 30-year fixed rate. Rates have been below 4 percent since early December. (AP)

Facebook insiders are cashing out: That's why so many more shares have been added to Friday's IPO. Among the sellers: Goldman Sachs, Tiger Global Management, and Facebook director Peter Thiel. From the WSJ:

The planned large sales by Facebook holders send mixed messages to potential investors just before the company prices its shares, expected on Thursday. Some investors welcomed the idea that more shares would be for sale. But others sounded a note of caution, saying the willingness to shed so much stock could indicate sellers think now is a good time to take gains.

L.A. foreclosures fall: April filings were down 28.2 percent from a year earlier and 10.8 percent from March, according to RealtyTrac. That's one foreclosure filing per 412 housing units. In Riverside/San Bernardino, it's one per 213.

JPMorgan's trading loss keeps rising: The original estimate of $2 billion has been topped by at least $1 billion, reports the NYT, citing sources.

The underlying problem is that while these sharp swings are expected at a big hedge fund, they should not be occurring at a bank whose deposits are government-backed and which has access to ultralow cost capital from the Federal Reserve, experts said. "JPMorgan Chase has a big hedge fund inside a commercial bank," said Mark Williams, a professor of finance at Boston University, who also served as a Federal Reserve bank examiner. "They should be taking in deposits and making loans, not taking large speculative bets."

Big payday for Dodger owners?: By purchasing the team through former owner Frank McCourt - and not Major League Baseball - the Guggenheim investment group apparently can avoid sharing millions of revenue dollars with other teams. From the LAT:

The Dodgers are expected to pursue a regional sports network, on their own or in partnership with Fox, Time Warner Cable] or another television outlet. Guggenheim could establish a media company separate from the Dodgers, then have the company pay the team in accordance with the proposed Fox contract and keep the remaining revenue. The difference could be tens of millions each year, according to media analysts. With broadcast outlets fighting fiercely over rights to live sporting events, the annual value of the Dodgers' next television contract is expected to start well above $84 million.

Split over medical marijuana: Councilman Paul Koretz wants some dispensaries to keep operating, while Councilman Jose Huizar is pushing for a total ban (though allowing patients to grow their own marijuana or share it through collectives). From the Daily News:

"Two weeks ago, in closed session, we had a very level-headed discussion and a good decision on the direction our city attorney should take," Huizar said. "Now, they jumped hoops and waved out this new proposal that is an aggressive attempt to undo the direction we were going in." The new proposal from Councilman Paul Koretz would allow some dispensaries to continue to operate if they agreed to a set of city regulations. "They might call it a gentle ban, but I call it a vicious, heartless ban," Koretz said of Huizar's proposal.

Activision, EA settle: The two videogame giants came to terms in a dispute involving EA's funding of a new studio headed by the two co-creators of "Call of Duty." Activision's lawsuit against the two is set to go to trial this month. (LAT)

Downtown Long Beach goes upscale: Average household income is $50,472, significantly higher than the $30,048 in 2000, according to a new report. (Press-Telegram)

May 16, 2012

Haven't we had enough of Andrew Bynum?

bynum.jpgI pretty much gave up on the Laker center - and on the Lakers in general - after he was caught on camera parking in handicap spots around town. Fans put up with a lot, but that was my breaking point. (Didn't he figure that eventually someone would notice?) His enablers kept insisting that the kid would learn from his mistakes, but he really hasn't and most likely never will. His latest infraction - skipping out on a session with reporters - is relatively tame, but it's telling. From the LAT:

Bynum took the rare step of talking to reporters after the team's Wednesday morning shoot-around, when player interviews aren't mandatory, but it wasn't enough to save a financial hit. "As soon as the coach said we could go [Tuesday], I bonked out on you guys," Bynum told The Times on Wednesday, suggesting that he simply forgot to talk to reporters.

He's a jerk. Haven't we had enough?

May 15, 2012

Tuesday morning headlines

Stocks open higher: No obvious reason, other than the fact that Wall Street has been through an extended losing streak and eventually investors start buying. Dow is up 40 points.

JPMorgan executives ignored red flags: An increased appetite for riskier trades had the approval of senior level managers, including CEO Jamie Dimon, the NYT reported.

"There was a lopsided situation, between really risky positions and relatively weaker risk managers," said a former trader with the chief investment office, the JPMorgan unit that suffered the recent loss. The trader and other former employees spoke on the condition of anonymity because of the nature of the investigations into the trading losses.

JPMorgan's annual meeting: Talk about lousy timing. As the bank's shareholders gather today in Tampa, attention will be focused on how risk is being managed. From AP:

Shareholders will vote on whether to separate the bank's chairman and CEO positions, both held by Dimon. They will also vote their approval or disapproval of Dimon's $23 million pay package from last year. Analysts say Dimon is unlikely to lose those votes.

Retail sales slow down: A 0.1 percent increase in April is weaker than the numbers for February and March. (AP)

Inflation falls flat: L.A. area prices were unchanged in April and up only 1.5 percent year over year, in part due to falling gas prices (which have since gone back up). (OC Register)

Gas increases slowing down: But an average gallon of regular in the L.A. area is up to $4.398, according to the Auto Club, which is 17 cents higher than a week ago. Refinery problems are keeping West Coast supplies on the low side.

Why were budget estimates so wrong? The big jump in the state's deficit has less to do with the economy and more with overly optimistic revenue forecasts. From the Sacramento Bee:

Gabriel Petek, an analyst with Standard & Poor's, said state leaders last year "were kind of taking a little bit of a gamble." He said he would not expect lawmakers to use an aggressive revenue estimate of the same sort again. "When we did look at the state's cash flow, we took the $4 billion off the table and assumed it wouldn't come in," Petek said. "A lot of people even at that point viewed it skeptically."

Softening proposed cuts?: Democratic legislators said they would come up with alternatives to Gov. Brown's painful budget revisions, especially in social service programs, the courts, and university funding. (LAT)

Coliseum Commission approves lease deal: Day-to-day control will be taken over by USC. From the LAT:

USC would put $70 million into stadium upgrades under the deal, and take control of the Coliseum's revenue. The university would also assume the $1-million annual rent payment to the state, which owns the land under the stadium and the companion Sports Arena. A state report in 2005 valued the complex at $240 million to $400 million. Sports industry experts have said the lease gives USC all the benefits of owning the stadium without forcing it to buy the facility.

Facebook a passing fad? That's what half of Americans believe, according to an AP-CNBC poll. Also, half of those surveyed say they think Facebook is a good bet, while 31 percent do not. (AP)

Construction begins on port project: A 40-year, $4.6 billion lease deal between the Port of Long Beach and Orient Overseas Container Line is expected to double cargo movement and create at least 14,000 permanent jobs. From the Press-Telegram:

The long-term lease gives the company and its subsidiary, Long Beach Container Terminal, LLC, exclusive use of the 330-acre Middle Harbor. That will triple the size of the company's footprint, making it the biggest agreement of its kind in the history of container terminals in the United States and perhaps worldwide. It will expand LBCT's 90-acre facility to a 304-acre terminal. Projected for completion in 2019, the $1.2 billion Middle Harbor project will connect and upgrade two old shipping terminals.

No severance for fired CEO: Scott Thompson was forced out after admitting that he had lied about his academic record. He will be paid a $1.5 million "make whole" cash bonus he received on arriving at Yahoo. (DealBook)

May 11, 2012

Friday morning headlines

Stocks edge higher: So much for a freefall. Financials are taking a hit due to the JPMorgan news, but the overall market could be doing a lot worse (solid consumer confidence numbers might be helping). Dow is up about 50 points.

Renewed calls for bank reform: The JPMorgan mess will be used by supporters of tighter industry regulation, though time is running out. From the NYT:

The centerpiece of the new regulations, the so-called Volcker Rule, forbids banks from making bets with their own money, and a final version is expected to be issued by federal officials in the coming months. With the financial crisis fading from view, banks have successfully pushed for some exceptions that critics say will allow them to simply make proprietary trades under a different name, in this case for the purposes of hedging and market-making. The missteps by JPMorgan could highlight that murky line between proprietary trading and hedging. The bank unit responsible for losses takes positions to hedge activities in other parts of the bank.

Regulators looking into trades: Both U.S. and British officials want to know more about the bank's London-based trader who has been dubbed the "London Whale." (DealBook)

Consumer sentiment moving on up: Preliminary May reading by Thomson Reuters and the University of Michigan is at 77.8 from 76.4 in April. That's the highest level since January 2008. From Reuters:

Despite the recent slowdown in job growth, nearly twice as many consumers reported hearing about new job gains than said they had heard about recent job losses, the survey said. The data suggests that either more positive numbers on the labor market will be seen soon, or that consumers have ratcheted up their expectations too high, survey director Richard Curtin said in a statement.

Get ready for more budget cuts: Gov. Brown, who will announce his revised budget plan on Monday, says he'll need far more than the $4.2 billion in spending reductions he asked for in January. From the LAT:

Tax revenue has lagged by $3.5 billion and the state has shelled out $2.1 billion more than expected so far in the current budget, according to the state controller. Brown said Thursday that his new spending plan will fall between $85 billion and $90 billion, down from the $92.6 billion proposal he released in January.

Big jump in L.A. gas prices: They're up more than four cents a gallon in just one day, according to the Auto Club. Average price is now $4.276, but further increases are expected.

Metrolink raises fares: Faced with a $13-million deficit, the commuter rail service is proposing a 5 percent to 9 percent increase. The typical round-trip fare between downtown and Fullerton is now $15 and between L.A. and Riverside is $23. (LAT)

Betsey Johnson to liquidate: The boutique retailer with several stores in the L.A. area is holding a going-out-of-business sale after a last-ditch auction to save the chain was unsuccessful. (Bloomberg)

Hot property near Dodger Stadium: The ownership change has increased real estate activity in a one-mile radius of the stadium, the L.A. Business Journal reports. Brokers say that nearby property is likely to increase in value.

May 10, 2012

So much for the Vikings coming to L.A.

The Minnesota state Senate all but sealed the construction of a $975 million football stadium that will rely heavily on public financing. Gov. Mark Dayton says he'll sign the measure. Under the bill, the Vikings agree to a 30-year lease on the stadium, which will be built on the site of the Metrodome. The team would also pay about $13 million annually in operating fees. From AP:

The team chased a new stadium for more than a decade but had little leverage until its lease expired this past year on the 30-year-old Metrodome. Dayton led a newly urgent charge for the team, arguing that without a new building the state could lose its most beloved franchise. The deal guarantees the Vikings' future in Minnesota for three decades. The team would pay 49 percent of construction costs: $477 million, which is $50 million more than owners initially committed. But the public expense is still high: $348 million for the state and $150 million for the city of Minneapolis.

Most of the state's share would come through expanded gambling revenue. Some months back there had been speculation that the Vikings would consider relocating to L.A. if the stadium deal wasn't cut. Who knows whether the owners were serious or bluffing, but at this point it doesn't much matter.

May 7, 2012

Did Magic Johnson lie about Frank McCourt's involvement with Dodgers?

magic-mccourt-jsh.jpgNot to belabor, but I did point out several weeks ago that despite his investment success, Magic Johnson has had little experience actually running a business. And it's already starting to show. Based on Saturday's LAT story about how McCourt will benefit from parking lot revenue at Dodger Stadium, it appears as if Johnson either lied during last week's press conference or has been kept in the dark about the the team's financing. As The Weekly's Gene Maddaus explains:

Johnson, the front man for the team's new ownership group, said that ex-owner Frank McCourt was "not involved in any shape or fashion" with the team. He also said McCourt would not get any of the parking revenues. "He doesn't get a dime from the parking," Johnson said. False. In fact, as the Times' Bill Shaikin reported Friday night, the Dodgers will pay $14 million a year to a company half-owned by McCourt for the privilege of parking cars at the stadium. Magic Johnson simply lied about that, as he continues to obfuscate about his partnership with the most hated man in Los Angeles.

Controlling owner Mark Walter said during the press conference that McCourt has an interest in future real estate development, but that he wouldn't have any connection with parking or other day-to-day operations. Two days later, he acknowledged that McCourt will get some portion of the $14 million in parking lot lease payments. I can only guess that in their haste to distance themselves from McCourt, the new owners left a little something out: the truth.

Dodgers photo by Jon SooHoo

Monday morning headlines

Stocks still down: Predictably negative reaction to Sunday's election results in France and Greece. But early losses have been pared. Dow is down about 25 points.

So much for austerity? France's newly elected president, François Hollande, could be headed for a collision course with German Chancellor Angela Merkel on the European debt problems. From the NYT:

In broad terms, the French vote unsettled center-right governments across Europe, while their center-left adversaries felt emboldened, hoping that the triumph of one socialist leader presaged a wider resurgence. But the nub of the ideological and fiscal contest lay in the continent's traditional driving axis between Berlin and Paris, with Mr. Hollande promising to rewrite the austerity-driven pact struck between Mr. Sarkozy and Ms. Merkel.

Gas update: L.A. area prices are up about a nickel a gallon from last week, with regular now at $4.232, according to the Auto Club. Oil is trading at $98 a barrel, which is about $10 cheaper than several weeks ago.

California's Facebook windfall: CEO Mark Zuckerberg will be cutting the state a check for roughly $189 million. From the LAT:

And that's just the payout from Zuckerberg. The windfall for California from the rest of the IPO could net California hundreds of millions more, [said Sam Hamadeh, CEO of research firm PrivCo.]. "More taxes will come due as more shares are sold beginning in December and well into 2013 after the traditional 180-day post-IPO 'lock-up' period expires and employees can sell even more shares, resulting in new capital gains taxes to California -- and the IRS -- with each new stock sale," he said.

Who gets what out of Dodger Stadium parking lots?: LAT reports that the new owners will pay $14 million a year to rent the lots from an entity half-owned by Frank McCourt.

Guggenheim Baseball agreed to a 99-year lease with the company that owns the parking lots, a joint venture between McCourt and an entity affiliated with the new team owners. Walter said McCourt would get some portion of the annual $14-million rent, after accounting for expenses and return on investment. The $10 Dodger Stadium parking fee will be collected by Guggenheim. Aside from the annual lease payment, [Mark Walter, the team's controlling owner], said McCourt would not share in any team revenue, including parking fees.

Huge weekend for "The Avengers": The Disney blockbuster took in $200.3 million at North American theaters - what could be the biiggest opening weekend of all time. Worldwide box office is likely to top $1 billion. From the NYT:

It marks an important win for Disney, which has struggled mightily at the box office in recent months. The studio's last major release was "John Carter," a failed science-fiction epic that prompted Disney to take a $200 million write-down. The company fired its movie chairman last month and has not yet announced a successor. Hollywood will now try to keep the "Avengers" momentum going by releasing blockbusters every weekend until Labor Day, a season that typically accounts for 40 percent of the industry's annual ticket sales.

ABC and Univision team up: The two media giants are planning a 24-hour English-language cable channel for Hispanics. The channel is expected to start sometime in the first half of 2013. (NYT)

May 2, 2012

All smiles and promises at Dodger news conference

Really more of a coming out party for the new owners, complete with Vin Scully as MC and a cast of former Dodger greats. About the only significant news was that the new management would reduce general parking to $10 from $15 (the raising of parking fees by McCourt generated lots of backlash). In addition, Mark Walter, chairman of Guggenheim Baseball Management, the investment group that is taking over the franchise, confirmed earlier reports that former owner Frank McCourt will receive no revenue from any team operations, including parking. "The rumors - we're quashing them now," said Magic Johnson, who has a minority stake in the team and is expected to be a front man for the franchise. "One hundred percent of all operations... is controlled by us," said Walter. McCourt, the partners said, does have an economic interest in the land surrounding Dodger Stadium (they didn't specify what it was), but only if the property is developed by the Guggenheim people. Walter brushed back questions about the eye-popping $2.15-billion price tag, saying that "the value will take care of itself." Also on hand was longtime baseball executive Stan Kasten, who will really be managing the franchise and, like the others on hand, kept talking about being committed to "a culture of winning."

Best line came from an unlikely source: Mayor Villaraigosa. Looking at Johnson, the mayor said, "I have just one piece of advice: Win. A lot."

Wednesday morning headlines

Stocks slumping: A weak jobs report from ADP, more worries out of Europe, and the market's relatively high levels could be the culprits. Dow is down 55 points.

Hiring slowdown?: Only 119,000 private sector jobs were added to the rolls last month, according to ADP, which is down sharply from March's 201,000. From AP:

The survey covers hiring only in the private sector. And it has been known to deviate sharply from the government's figures, which will be released on Friday. For example, the government said employers added just 120,000 jobs in March - much lower than ADP's estimate.

S&P worried about California: A larger-than-expected deficit and a court ruling that bars the state from withholding lawmakers' pay has the ratings agency talking about a revision to its positive outlook on California debt. (AP)

Pep Boys purchase in trouble?: The L.A. private equity firm Gores Group has asked for a 30-day delay in completing its planned $1-billion purchase of the auto parts chain. Gores executives are worried about Pep Boys' first-quarter loss of $4.4 million (what could be considered a "material adverse change"). From DealBook:

It is an escape hatch usually built into takeover agreements, allowing a would-be buyer to end a deal if the company being bought has experienced a previously undisclosed weakness in its operations. Different deals have different conditions that must be fulfilled to meet the standard of a MAC, which is also known as a material adverse event. MACs were the root of many contentious battles in the last five years, as buyout firms sought to end deals as the financial crisis began to set in.

Herbalife tries to bounce back: Shares of the L.A.-based maker of nutritional supplements are up about 2 percent this morning after Tuesday's 20 percent drubbing. The drop came after a hedge fund manager - and prominent short seller - raised questions about the way Herbalife distributors are calculated in the company's finances. (DealBook)

More rich Americans giving up their citizenship: Almost 1,800 expatriates turned in their passports last year, up from 235 in 2008. It seems like they don't want to pay taxes. From Bloomberg:

The U.S., the only nation in the Organization for Economic Cooperation and Development that taxes citizens wherever they reside, is searching for tax cheats in offshore centers, including Switzerland, as the government tries to curb the budget deficit. Shunned by Swiss and German banks and facing tougher asset-disclosure rules under the Foreign Account Tax Compliance Act, more of the estimated 6 million Americans living overseas are weighing the cost of holding a U.S. passport.

Lasorda pitches for Ontario Airport: The former Dodgers manager, appearing in a two-minute online commercial, is pushing for local control of the struggling facility. From the WSJ:

The city paid $78,000 to film the commercial, including a $10,000 fee for Mr. Lasorda. The fee is less than the $40,000 or so he usually charges for speaking engagements. Mr. Lasorda says he has occasionally flown out of the Ontario airport, though he lives in Fullerton, about 25 miles away--and slightly closer to Orange County's John Wayne Airport.

Dodger press conference: New owners will be at the stadium this morning to take questions.

May 1, 2012

Dodger sale closes; McCourt era is over

Finally. From the LAT:

The new owners wired the final payment on the record $2.15-billion purchase price on Tuesday, closing the transaction that ended the McCourt era and ushering in Guggenheim Baseball as the Dodgers' third owner since the O'Malley family sold the team in 1998, individuals close to the negotiations confirmed. The new ownership group, fronted by Magic Johnson and incoming Dodgers President Stan Kasten, is expected to hold its first news conference on Wednesday. Dodgers controlling owner Mark Walter, who arranged the financing as chief executive of Chicago-based Guggenheim Financial, is expected to make a rare public appearance at the news conference.

Tuesday morning headlines

Stocks open higher: Strong reading on manufacturing and another solid month for auto sales. Dow is up 75 points.

Good month for Chrysler: April sales were up 20 percent, the 25th-straight month of year-over-year sales gains. But Ford reported a 5 percent drop. Results from the other carmakers are due out later today. (AP)

May Day protests: More than a dozen street and intersection closures are expected. Also, look out for a planned protest outside LAX. (LAT)

British panel blasts Murdoch: The News Corp. CEO is "not a fit person" to run a huge international company, according to the final report of a UK parliamentary committee looking into the company's phone hacking scandal. From the NYT:

The startling conclusion about the world's most influential media tycoon went much further in criticizing Mr. Murdoch than had been expected from Parliament's select committee on culture, media and sport, which has conducted several inquiries into press standards, the most recent starting last year. But the impact of the report by the all-party committee was blunted by divisions within the panel itself. The committee said it had split, 6 to 4 ,on party lines in the assessment of Mr. Murdoch, with the dominant Conservatives opposing the criticism while the Liberal Democrats, the junior coalition partner in Prime Minister David Cameron's government, and the Labor opposition supporting it.

Dodger sale not a done deal: But it's expected to be today, reports the LAT's Bill Shaikin. The delay involves the approval of documents that had not been cleared by the court-appointed mediator supervising the sale.

McCourt did meet a Monday deadline to pay a $131-million divorce settlement to his ex-wife, Jamie, according to a person familiar with the matter but not authorized to comment, eliminating the possibility that she could intervene in the sale process. Frank McCourt, who agreed to sell the Dodgers for a record $2.15 billion, could clear close to $1 billion in net profit. However, according to the divorce settlement, Jamie McCourt need not pay taxes on the $131 million and Frank McCourt cannot deduct the amount from his taxes.

Gas prices inch higher: It's slight, but it's the first overnight increase I've seen in the last few weeks. An average gallon of regular in the L.A. area is $4.181, according to the Auto Club, one-tenth of a penny higher than on Monday.

Calpers takes aim at Vernon: The city improperly boosted the benefits of nearly two dozen employees, according to findings by the California pension fund. The pensions of some city officials are expected to be cut. (LAT)

More new bank branches in wealthier areas: Affluent neighborhoods have seen an 8.4 percent increase in the number of banks and thrift offices since 2006, according to a study. Lower-income areas saw a 1 percent decline. From the LAT:

"We are very concerned that regular folks who may not happen to have a lot of money are being pushed methodically out of mainstream banking," said Alan Fisher, executive director of the California Reinvestment Coalition in San Francisco. "The regulators allowed subprime and expensive credit card lending, and now they are standing by while the financial divide widens through the methodical efforts of the big banks to serve the wealthy and exclude those who are not," Fisher said.

Dick Clark Productions wins suit: A federal judge ruled that the production company had the right to license the Golden Globes show to NBC. The Hollywood Foreign Press Association had been challenging the license agreement. (Bloomberg)

New funding for the Sahara: L.A. night club impresario Sam Nazarian and his partners have secured a $300 million loan to revamp the casino and hotel on the Vegas Strip. It's the first big construction loan for Las Vegas in years. From the WSJ:

That loan provides much of the funding Mr. Nazarian's SBE Entertainment Group and Stockbridge Real Estate Funds will need to start construction on redeveloping the 1,700-room Sahara, which was closed last year as room rates there sank as low as $26 a night. They hope to reopen the casino in 2014 as a swanky casino hotel branded SLS, Mr. Nazarian says.

Union proposal to avoid city layoffs: The plan includes voluntary subscription fees to pay for ambulance service and the collection of unpaid foreclosure fees owed by banks. From the Daily News:

In past budget years, layoffs have been avoided by shuffling around employees, finding new sources of funding to pay for staff and reaching concessions with unions. This year the unions refused to reopen their contracts. They made concessions last year, including paying more for their retirement benefits and delaying pay raises that are now scheduled to go into effect later this year. "We think there are other options the council should explore," [said Cheryl Parisi, head of the Coalition of L.A. City Unions].

Personal income tax revenue falls short: April receipts were running about $2 billion behind projections. That could signal a higher-than-expected budget deficit. (California Capitol Network)

Rail car contract awarded to Japanese firm: MTA officials went with Kinkisharyo International in a $890 million deal. The new cars will be used for the Crenshaw Line,Expo Line, and extensions of the Gold Line. Labor unions opposed the Kinkisharyo bid. (LAT)

April 30, 2012

Monday morning headlines

Stocks edge lower: Some concerns about Spain, but the market will probably be biding its time until the April job reports later in the week. The Dow is down 30 points.

Consumer spending slows: Perhaps a hiccup due to the run-up in gas prices, but March's increase was just 0.3 percent, following a 0.9 percent gain in February. Consumer spending accounts for 70 percent of economic growth. (AP)

Gas update: An average gallon of regular in the L.A. area is $4.180, according to the Auto Club. Price declines have been slowing in recent days.

Hollywood payday for Obama: George Clooney says the fundraiser he'll co-host for the president on May 10 will generate $10 million - what would be the largest amount ever for a single Obama campaign event. (WSJ)

Walmart opponents using Mexico scandal: Labor groups are using the bribery allegations in efforts to rescind a building permit for a store in Chinatown. From the NYT:

"There definitely is a pattern of giving campaign contributions to politicians who support what they want," [said Dorian T. Warren, a political science professor at Columbia who is writing a book about Wal-Mart's efforts to expand into Chicago and Los Angeles]. But because the Mexican accusations include bribing local officials, "when you take that to the context of New York or Los Angeles, it's going to make it harder for politicians to accept campaign contributions from Wal-Mart."

Microsoft buys into Nook: The $300 million investment gives the computer giant a 17.6 percent stake in a spinoff that will center on the Barnes & Noble e-reader. From DealBook:

Both companies are spending heavily to maintain a foothold in light of Apple's success with the iPad. The Nook division's growth has come at enormous financial cost, weighing down on Barnes & Noble's bottom line and prompting the strategic review. The retailer added on Monday that it was still weighing other options for the business. Through the deal, the two companies will settle their patent disputes, and Barnes & Noble will produce a Nook e-reading application for the forthcoming Windows 8 operating system, which will run on traditional computers and tablets.

At the movies: "Think Like a Man" stayed in the top spot for the second weekend in a row, while "The Five-Year Engagement" came in a disappointing fifth in its opening weekend. (THR)

Dodger sale expected to close today: Barring any last-minute snags, the team will have a new owner when it takes the field tonight in Colorado. (LAT)

L.A. billionaire nears big airplane purchase: Steven Udvar-Hazy's Air Lease Corp. is closing in on 60 Boeing 737 Max jetliners, the WSJ is reporting. Udvar-Hazy launched Air Lease in 2010.

Glendale Galleria begins makeover: Changes include the addition of a Bloomingdale's and an outdoor dining and gathering place. Project is set to be completed in the fall of 2013. (LAT)

Commercial real estate pickup in the Inland Empire: Industrial vacancies were falling during the first quarter and asking lease rates were climbing. (Daily Bulletin)

April 26, 2012

L.A. is home to largest number of NFL players

NFL.jpgA total of 114 players in the league, according to data cruncher Patrick Adler, followed by Miami (73), New York (55), Houston (44), and Chicago (39). Large metro areas, of course, will always have the largest numbers because they are the most populated. When it comes to NFL player production per 100,000 people, it's quite a different story. From the Atlantic's Richard Florida:

Jackson, Mississippi, comes out on top with roughly 35 players per 100,000, followed by Jacksonville, Florida (27); Monroe, Louisiana (20); Lexington, Kentucky (15); Canton, Ohio (11); Lafayette, Louisiana (6); Pine Bluff, Arkansas (4); Athens, Georgia (4); Midland, Texas (3); and Billings, Montana (3) round out the top 10. Of the large metro areas, New Orleans was 16th with 2.5 players per 100,000. Miami is 32nd in player production, Los Angeles is 47th and New York is even further back at 110th.

Quarterback production follows a similar pattern. L.A. leads the way with 10 (11 percent of the total share), followed by San Francisco with five (5 percent). But based on per 100,000 population, Mobile, Alabama, leads with 0.49 QBs per 100,000, followed by Knoxville (0.29), New Orleans (0.17), and Pittsburgh (0.17). L.A. is at 0.08, which seems mighty small. Tonight is the start of the NFL draft, when we might be hearing a lot of those hometowns.

April 20, 2012

Friday morning headlines

Stocks open higher: We're back to those sharp day-to-day swings. Dow is up 100 points.

Is economy stalling?: Recent numbers would seem to indicate as much, though to what degree is really guesswork. From the WSJ:

Separate reports this week suggested that the factory sector, a source of strength in the recovery, now is being hurt by weak growth overseas. However, recent signals have been mixed, with worrisome indicators following positive ones--such as consumer confidence and auto sales--that suggest the recovery remains on track. Economists generally believe total economic output in the first three months of the year grew at a rate a bit above 2%--slower than at the end of 2011 but significantly stronger than the same period a year ago. "It's been the weakest recovery in the post-World War II period, and that hasn't changed," said David Rosenberg, chief economist for investment firm Gluskin Sheff.

Gas update: L.A. area prices fell another half-penny from Thursday. An average gallon of regular is $4.222, according to the Auto Club.

L.A. budget day: The mayor lays out his plan for closing a $200 million-plus deficit. He says the budget will include layoffs in the hundreds.

New chatter about NFL team in L.A.: The Vikings have been unable to receive funding from the state to help build a new football stadium, and with time running out there's speculation about a move to L.A. From the Daily News:

The state now has 10 more days to either revive the bill and get a stadium deal passed or risk losing the Vikings, who intimated they will not wait until 2013 to finalize a new stadium plan in Minneapolis. "There is no next year," Vikings vice president Lester Bagley said. If no stadium deal is completed within this legislative session, Los Angeles becomes a viable relocation alternative for the Vikings - either downtown at AEG's proposed Farmers Field stadium or at Majestic Realty's proposed City of Industry project.

Baseball Commissioner wants details on Dodger deal: Bud Selig says the league doesn't intend to stop the sale, but he's unclear about the financial structure of the ownership group - as well as the joint venture the new owners have with Frank McCourt involving the Dodger Stadium parking lots. (LAT)

Region bucks trend on venture capital: First-quarter funding for Southern California firms totaled $924 million, up sharply from $602 million a year earlier. San Diego led the way, with $357 million in investments across 21 deals; L.A. was second with $$318 million in 48 deals. National numbers were down. (socaltech.com)

Pressure cited on assessor employees: A former county appraiser tells the LAT that he reduced the amount of tax owed by Westside property owners as a way of encouraging them to contribute to the campaign of his his boss, Assessor John Noguez.

Scott Schenter, the former employee at the center of a criminal investigation roiling the assessor's office, said Noguez had promised him a promotion in the summer of 2010 in the midst of Noguez's successful election campaign. After that, the pressure to raise money for the campaign was constant and "brutal," Schenter said in an interview with The Times. Although he contributed himself and got friends to contribute, Noguez "called me a few times just to say, 'Hey Scott, we need more people; we're way behind in donations.' "

CW relying more on the Web: Nearly a fifth of the network's viewers are watching online, double the amount from a year ago - and TV stations aren't happy. From the WSJ:

This shift is partly by the network's design. Conscious that its target audience of younger people is spending more time online than older viewers, the CW has moved more aggressively than many other networks to put all its shows on the Web, and has been pushing advertisers to buy its ads online and on TV in the same packages. The CW is walking a fine line, trying to get bigger online while not alienating the TV stations that pay tens of millions of dollars per year between them to broadcast the CW network. While the stations have exclusive agreements to carry the programming the night it airs, the CW recently starting putting the shows online the very next day--instead of waiting three days as in the past.

Variety receiving scant interest: Or so says the NY Post's Keith Kelly, who has heard that both Leon Black's Apollo Management and Bloomberg are taking a look at the trade (Bloomberg is considered a long shot). There's also the possibility of a vanity buyer.

Port of L.A.'s five-year plan: The idea is to stem competition from other facilities, especially with a major expansion of the Panama Canal that would allow Asian container ships to bypass Los Angeles and Long Beach. (Daily Breeze)

April 13, 2012

Dodger sale approved

Quite a bit of last-minute drama (see post below), but in the end U.S. Bankruptcy Judge Kevin Gross signed off on the sale of the team to a group led by Chicago-based Guggenheim Partners. The $2.15-billion sale is expected to close by the end of the month. The Frank McCourt era is over - well, mostly. He still has an ownership stake in those parking lots.

*LAT: MLB raising objections to Dodger deal

This afternoon's hearing in U.S. Bankruptcy Court has not been smooth sailing, according to tweets from the LAT's Bill Shaikin. Tom Lauria, an attorney for Major League Baseball, says the sale documents are not final and that the league constitution gives Baseball Commissioner Bud Selig final say. Lauria also says that MLB has issues with the debt financing being arranged by Guggenheim Partners, as well as provisions regarding the parking lots and land surrounding Dodger Stadium. According to a Shaikin tweet, Judge Kevin Gross said, "I'm surprised we are at this stage at the confirmation hearing... I thought this was going to be a celebration-type occasion." Dodger attorney Bruce Bennett has been turning aside Lauria's objections, especially the part about the sale agreement being subject to review and revocation. What a way to spend a Friday night in Delaware.

*Update: Reading Bill's tweets (they're pretty entertaining), it seems as if the parking lot deal between Guggenheim and Frank McCourt has become a particular sore spot.

*Gross has called for a 15-minute recess (have these guys eaten?)

*Gross says the sale agreement is in conformance with the bankruptcy code. He also says he'll retain jurisdiction over the parking lot issue.

*Shaikin tweets that Gross seems ready to approve the sale, as expected. Check that - Gross has approved the sale.

Friday morning headlines

Stocks slip: Where did the rally go? Slower growth in China is the apparent culprit. Dow is down about 100 points.

Gas update: L.A. area prices fell another penny from Thursday - an average gallon of regular is $4.258, according to the Auto Club, down a nickel from a week ago.

Why are gas prices falling?: A lot has to Iran's apparent willingness to hold talks on its nuclear program. From CNNMoney:

"All of the bad things we were really worried about don't look like they will happen," said Kevin Lindemer, an independent energy consultant that has worked for Irving Oil and Cambridge Energy Research Associates. "If we have an uneventful summer, there's nothing fundamental that should cause prices to go much higher." But having an uneventful summer is still a big if.

Local prices up sharply: Blame it on gas and groceries. L.A. area inflation was up 1 percent from February to March and 2 percent from March 2011. That's quite a bit higher than the nationwide Consumer Price Index. (OC Register)

Consumer sentiment dips: The Thomson Reuters/University of Michigan index for early April was 75.7 from 76.2 the previous month. From Reuters:

"Needless to say, the revival of confidence critically depends on the two economic events that consumers still expect to happen: that jobs will become more plentiful and that gasoline prices have ended their sharp run up," survey director Richard Curtin said in a statement. "Both are widely expected, and these expectations are anchored well enough to withstand temporary disappointments."

Good bank earnings: JPMorgan Chase reported better-than-expected first-quarter results. Among reasons cited: improving credit conditions among consumers and continued demand for new loans. (DealBook)

Time Warner Cable would consider Dodger stake: Such an investment would be aimed at securing a lucrative broadcast deal that's now held by Fox. Meanwhile, a bankruptcy court hearing is scheduled this morning on the the $2.15 billion sale. (DJ)

Coliseum officials squandered funds: The lack of basic financial controls is what city auditors found in a report. From the LAT:

The 70-page report says the commission, made up of three L.A. County supervisors and three appointees each from the city and state, freed [General Manager Patrick] Lynch to manage the taxpayer-owned stadium in a setting "void of essential formal policies, procedures and protocols." "The tone at the top was not suitable for a government entity," the report says.

Anaheim back on bullet train route: The state's High Speed Rail Authority eliminated OC as a cost-cutting measure, but the agency has reconsidered. (OC Register)

Port of L.A. has big month: March container traffic was up 8.1 percent compared with a year earlier. The boost was attributed to a surge in imports following Chinese New Year. (Daily Breeze)

April 12, 2012

Thursday morning headlines

Stocks keep moving up: Not-so-great job news isn't having much of an effect. Dow is up 150 points.

Jobless claims jump: After steady declines for much of the year, weekly filings jumped 13,000, to 380,000. The previous week's figures were also revised higher. (AP)

Mixed report on foreclosures: March filings were up 14 percent from a month earlier, according to RealtyTrac, despite a 4 percent drop nationwide.

Gas update: L.A. area prices fell almost a penny from Wednesday, with an average gallon now at $4.268, according to the Auto Club. That's down more than 12 cents from a month ago.

Amazon cuts e-book pricing: Soon after the government announced that it was going after Apple and several major publishers, the online retailer said it would reduce some major titles to $9.99 or less from $14.99. From the NYT:

But publishers and booksellers argue that any victory for consumers will be short-lived, and that the ultimate effect of the antitrust suit will be to exchange a perceived monopoly for a real one. Amazon, already the dominant force in the industry, will hold all the cards. "Amazon must be unbelievably happy today," said Michael Norris, a book publishing analyst with Simba Information. "Had they been puppeteering this whole play, it could not have worked out better for them."

MLB still not happy with Dodgers: League officials have discussed their concerns about the sale with a court-appointed mediator, though it doesn't intend to derail the $2.15-billion purchase, which is expected to be completed by the end of the month. From the LAT:

The league has asked for details about the source of the additional $505 million, and about the joint venture that McCourt and Guggenheim formed to own the Dodger Stadium parking lots. The Dodgers have declined, claiming the structure and financing of the deal remains the same as approved by MLB -- all cash plus debt assumption, with no new team debt and no new financial partners.

Workers comp overhaul?: Business and labor groups are working on a package of reforms that could provide more care to injured workers without raising premiums. From the LAT:

The negotiations are focused on squeezing waste from California's $15-billion system, which, while huge, often delays or denies compensation and medical care that could get injured workers back on the job. Average compensation paid to California workers in cases of permanent partial disability was $12,000 last year. That's down more than half from $25,000 in 2004, according to the UC Berkeley Survey and Research Center.

Slow start on Oaktree IPO: The L.A.-based investment firm sold fewer shares than expected, and the offering was priced at the bottom of the expected range. From DealBook:

Oaktree's underwriters also cut the size of the offering, to nine million shares from 10.3 million shares, said these person, who spoke on condition of anonymity. That means that the firm raised $387 million from its market debut. The pricing represents an inauspicious start for Oaktree's new life as a public company. It is following in the footsteps of rivals like the Blackstone Group, Kohlberg Kravis Roberts and Apollo Global Management.

April 11, 2012

Wednesday morning headlines

Stocks rebounding: After five straight down days, including Tuesday's 212-point drop, this could the time to buy. Dow is up about 100 points.

Gas update: Another price drop - an average gallon of regular in the L.A. area is $4.276, according to the Auto Club, down close to a penny from Tuesday and a nickel from a week ago. Oil prices have been slumping of late.

Dodger sale expected to be approved: Major League Baseball will not challenge the $2.15-billion purchase in U.S. Bankruptcy Court, despite ongoing questions about the deal's financing. Also not challenging is Fox Sports. (LAT)

County assessor gets grilled: Supervisors wanted to know how early estimates on property tax revenue could be so wrong ($5.1 billion instead of $18.7 billion). From the LAT:

Supervisors said they had never seen such a steep estimated drop in such a short time. [John] Noguez and another person from his office said the December estimate was based on information covering the first nine months of 2011, when the area's housing market was relatively steady. But the market went into decline the last three months of the year, leading to the new forecast, they said. Supervisors seemed incredulous, saying they were not aware of such a sudden decline in the housing market and questioning the assessor's calculations.

U.S. sues Apple:The government is accusing Apple and five major book publishers of conspiring to limit competition for the pricing of e-books. From the WSJ:

The lawsuit, filed in Manhattan federal court by the U.S. Department of Justice's Antitrust Division, alleges Apple and the publishers reached an agreement where retail price competition would cease, retail e-books prices would increase significantly and Apple would be guarantee a 30% "commission" on each e-book sold. A settlement involving some of the publishers is expected to be filed Wednesday, according to a person familiar with the matter. U.S. Attorney General Eric Holder is expected to discuss "a significant antitrust matter" at a press conference later Wednesday.

Disney deal in China: The company will help develop the country's animation industry. From the LAT:

China's government has identified animation as a key area for development to boost the country's global influence, or "soft power." The interest in animation is due in part to the success of DreamWorks Animation's "Kung Fu Panda" franchise, which sparked wide debate within China about why the country can't leverage its culture as effectively as Hollywood.

Pension gap widens: That's the gap between the assets of the California State Teachers' Retirement System and its obligations to retirees. The pension system can't impose higher contributions on taxpayers or employers without legislative approval - and without more cash, the fund will run out of money in 35 years. (Sacramento Bee)

April 10, 2012

More questions about how Dodger purchase is being financed

Still no official word on particulars, but NYT columnist Andrew Ross Sorkin says that Guggenheim Partners head Mark Walter, who is leading the investment group, plans to use money from Guggenheim's insurance companies. From Sorkin:

Using insurance money -- which is typically supposed to be invested in simple, safe assets -- to buy a baseball team, the ultimate toy for the ultrarich, seems like a lawsuit waiting to happen. Mr. Walter has been somewhat open in acknowledging that Guggenheim's companies will be tapped, but the investor group has not disclosed how much of the purchase price is coming from individuals.

The transaction seems even more questionable when considering Mr. Walter's own words to The New York Times two weeks ago: "I don't want to realize a return on investment on buying the Dodgers. I want to have a multigenerational relationship that changes my life, Magic's life, Magic's grandchildren's lives and all of our lives."

So let's get this straight: Mr. Walter, who has a fiduciary duty to the firm's policyholders, plans to pump their money into a baseball team, even though he says he's not seeking to realize a return on the investment. And he is seemingly wildly overpaying by some $500 million more than the next highest bidder -- he outbid Steven Cohen, the hedge fund manager, among others -- so that he can be the league-designated owner of the Dodgers.

Sorkin points out that insurance companies do use their premiums to make investments, and sometimes they can be speculative. But rarely do those investments include a sports franchise, especially at such a huge premium.

People involved in the process who are close to Guggenheim said that while the company was using its insurance companies to pay for the Dodgers, it was a very good, prudent deal for its investors and policyholders. As long-term investors, these people said, the new owners could afford to be patient to see a return. One person involved in the deal, as a point of comparison, noted that MetLife had paid $400 million for the naming rights to Giants Stadium. "This is a much better deal," this person said. As for MetLife, "They don't own anything."

Meanwhile, there's this from the LAT's Bill Shaikin:

The Dodgers should not be required to reveal the conditions that govern use of the land surrounding Dodger Stadium, the team argued in a court filing Monday. Those restrictions include "sensitive non-public commercial information" that should remain sealed, the team claimed. U.S. Bankruptcy Judge Kevin Gross is set to hear the matter Friday, as part of a hearing in which he is expected to approve the sale of the team. Frank McCourt has agreed to sell the Dodgers to Guggenheim Baseball Management for $2.15 billion, with the parties jointly owning the parking lots that circle the stadium. The lots are owned by a McCourt entity that was not part of the bankruptcy filing, and so Dodgers attorneys have said details of the joint venture need not be disclosed in Bankruptcy Court.

Let's reiterate that since these entities are privately held, they're under little obligation to disclose anything. But clearly, it looks bad, especially coming after the McCourt disaster.

April 6, 2012

New Dodger owners supply a few more details *

magic-mccourt-jsh.jpgPurchase price is $1.6 billion, plus the assumption of $412 million in debt, reports the LAT. (That doesn't include the parking lot side deal, which is another $150 million.) This is at odds with early reports that it was an all-cash deal. We'll wait to see what else the court documents reveal, but for now Major League Baseball officials are concerned that the prospective owners have been slow to produce details of the bid and the structure of the management team, SI is reporting.

Several individual owners have joined baseball officials in questioning why the Guggenheim group, led by Mark Walter, Stan Kasten and Magic Johnson, has not filed a more detailed Purchase and Sale Agreement more than a week after the group was selected from among three finalists by Frank McCourt, the outgoing owner who is selling the club through U.S. Bankruptcy Court.

The group was expected to file a Purchase and Sale Agreement with MLB earlier this week, but postponed the filing for two days before submitting a short form agreement that lacked what MLB regards as most of the necessary details. Of particular interest to MLB is a breakdown of where the money is coming from to cover the $2.15 billion sale price and what role McCourt has in the ownership, control and profit-sharing of the Dodger Stadium parking lots. Until MLB knows and reviews those details, according to sources, concern mounts about how the deal is financed and especially if McCourt stands to continue to profit from Dodger-related operations under the new ownership.

Here's another wrinkle: SI, citing sources not involved in the sale, says that the Guggenheim group has reached out to wealthy Angelenos as potential investors - apparently in response to questions about the amount of local money that's involved in the purchase. Of course, let's remember that this information is coming from unnamed sources who may or may not have the full picture of what's going on. Still it's intriguing - Guggenheim needs to open up.

*Forbes writer Mike Ozanian offers another explanation for the buyers offering so much:

When a sports franchise is bought, the purchaser receives a number of different types of assets. In the case of a Major League Baseball team, only a small portion of the assets are tangible (i.e. equipment and supplies). The vast majority of assets being acquired are intangible assets (i.e. player contracts, the right to share in league television and licensing income, the right to be a team in the league, to play the schedule, etc.). The depreciation of those assets for accounting purposes is going to save the team's new owners tens of millions of dollars on taxes they would have paid on their non-baseball businesses.

Any comment, Magic?

**From MLB.com:

According to the documents, Guggenheim Partners CEO Mark Walter will be the controlling partner, while longtime baseball executive Stan Kasten will be the president and chief executive officer. Former Lakers legend Magic Johnson is not listed in the documents, but he will have a small ownership stake and a large presence in the club's operations. Ned Colletti is listed as general manager, and Peter Wilhelm remains as treasurer and chief financial officer.

Magic Johnson and Frank McCourt at Dodgers' opening game in San Diego, April 5. Jon SooHoo/Dodgers

Friday morning headlines

Markets closed: No trading today for Good Friday.

Parsing job numbers: Economists are trying to get a handle on a March employment report that was weaker than expected. One figure stands out: Private payrolls came in at only 121,000, compared with expectations of 215,000. From Bill McBride at Calculated Risk:

The number of payroll jobs added in March was disappointing, and this is reminding many observers of the slowdown in 2011. But we also have to remember that this is just one month, and that there were clear reasons for the slowdown last year. In 2011, the economy was negatively impacted by the tsunami, bad weather, high oil prices and the debt ceiling debate. Of course oil prices are high again, but hopefully there will be no natural disasters, and also no threats of defaulting on the debt.

Question on jobless claims?: Those weekly filings keep getting revised upward, which suggests that the downward pattern of recent months is not quite as strong as initially reported. From the WSJ:

While the consistent need for upward revisions doesn't undermine the overall trend of an improving job market, it does suggest that the government's methodology for its initial estimate might not properly take into account factors such as seasonal adjustments or under-counting by states. Economists have already cautioned that claims data should be viewed over time to detect a trend, but most economists contacted by Dow Jones as well as Labor Department officials said they were unaware of the nearly uniform upward revisions in the data over the past year.

Another drop in gas prices: An average gallon of regular in the L.A. area is $4.305, according to the Auto Club, down a penny from Thursday and about a nickel from a week ago.

AEG betting on mass transit: Specifically, that 1 in 4 fans will come to the proposed downtown stadium by some other means than a car. And that might be possible. From the LAT:

Transportation planning consultant Ryan Snyder, who serves as a lecturer at UCLA, said he would like to see AEG focus less on freeway improvements for cars and more on the creation of bus-only lanes on corridors leading to the stadium. But he also said the transit assumptions made by AEG are achievable. "I'm willing to believe those numbers," he said.

State calls Aetna rate hikes "excessive": The increases average 8 percent a year for 77,000 small business employees, though in some cases they're as high as 21 percent. For now, there's not much state officials can do about it. From the LAT:

[Insurance Commissioner Dave Jones] used the opportunity to also restate his support for a proposed statewide ballot initiative that would give him the same power to approve or reject changes in health insurance rates that he has for automobile, homeowners and other types of property and casualty insurance. "I am disappointed that Aetna has decided to reject my request to refrain from its latest health insurance rate increases on small employers, which are unreasonable and not justified by the company's claims experiences," Jones said.

April 5, 2012

Traffic likely to be major hangup in AEG's stadium proposal

The environmental impact report talks of "unavoidable significant impacts" at a number of downtown freeway off ramps, though what do you expect when fans in 20,000 cars arrive at nearly the same time - and all in search of a parking space. Developer AEG proposes a number of mitigations, including widening streets, re-striping lanes and perhaps adding a mile's worth of additional freeway lane, but when that many people descend on a smallish area there's only so much that can be done. From the LAT:

The spike in traffic caused by such events as NFL games, international soccer matches or college football championship games would generate significant and "unavoidable" impacts at 20 intersections in the hour after Sunday events and at 42 intersections after an event on Saturdays. That would occur even after AEG adds traffic control measures to those intersections, according to the document. On weekdays, there would be significant and unavoidable effects at 72 intersections in the hour leading up to an event.

Not that there's much doubt where this thing is headed. City Councilman Bill Rosendahl, appearing on Larry Mantle's "Airtalk" this morning, went on (and on and on) about what a swell guy AEG head Tim Leiweke was and what a great company AEG was, and gosh, darn, aren't we all lucky that they want to bring football back to L.A.? And Rosendahl was supposed to be among the clear-thinking council members!

Anschutz group releases report on downtown stadium

Here it is, all 10,000 some odd pages, broken out into 17 volumes (14 of them technical appendices). The summary alone runs 183 pages. Inquiring minds will learn about how AEG intends to deal with traffic, the environment, and a host of other concerns. Members of the public will be given 45 days to comment, and AEG is looking for final approvals by the end of the year.

Thursday morning headlines

Stocks inching back up: Economic news is quite strong this morning. Dow is up a few points.

Good month for retailers: March sales were better than expected for many chains, from Target to Macy's. From AP:

Credit warm weather and high demand for spring fashions boosted revenue for the month, but analysts say there's much more than higher temperatures at play. Americans initially cut back on spending during the recession and have continued to hold back in the slow recovery, but in recent months they've been feeling better about the economy as the stock market rises and unemployment falls. "Retailers are benefiting from an improving employment and consumer confidence picture," said Ken Perkins, president of Retail Metrics, a research firm.

Jobless claims keep falling: Weekly applications dropped 6,000 to 357,000, a four-year low. That would suggest stronger job growth. (AP)

Gas update: Prices fell a penny from Wednesday, with an average gallon of regular in the L.A. area at $4.314, according to the Auto Club. They're down almost a nickel from a week ago.

Paper bag ban moves on: A City Council committee signed off on a measure that would study the phasing out of all single-use bags over an 18-month period. It would apply primarily to grocery stores, convenience stores, and drug stores. (Daily News)

Early word on stadium plan: In its environmental impact statement being announced today, developer AEG is proposing to widen freeway ramps, encourage the use of public transit, and possibly add a lane to the 101 from downtown to the Glendale Boulevard exit. (Daily News)

DirecTV, Tribune reach agreement: The owner of KTLA and other TV stations cut a five-year deal with the El Segundo-based satellite service. The Tribune stations have not been available on DirecTV since the weekend. From the LAT:

That the fight was resolved on the opening day of the baseball season is probably not a coincidence. Many of Tribune's stations, including WGN-TV Chicago and WPHL-TV Philadelphia, have rights to local teams, and sports fans can be very vocal when denied their home team's games.

Playa Vista gets its downtown: Developers released the design of a shopping and apartment complex that they will begin building in June. From the LAT:

Runway will be next to Jefferson Boulevard and house a premium grocery store, 10-screen movie theater, "chef-driven" restaurants and shops. Apartments and office spaces will rise above ground-floor retail shops and top out at four stories. The complex -- about the size of four city blocks -- will be mostly completed in about two years, but it is intended to look as if it evolved more slowly over time. Building materials similar to those used on well-known Los Angeles shopping streets such as Abbot Kinney Boulevard and Melrose Avenue will be incorporated, and full-grown native California trees will be brought in to add a sense of permanence.

April 4, 2012

Leiweke tries to re-establish timetable on downtown stadium

If all goes according to plan - that is if city officials sign off on AEG's environmental impact report by the end of the year - the stadium project could be shovel ready by March 2013, Leiweke told ESPNLosAngeles.com. (The EIR will be released on Thursday.) He spoke about the next couple of Februarys being important dates. That's when the NFL commissioner must receive written notice from a team wishing to relocate for the following season. "So February 2013 is going to be a moment in time for this city and then February 2014 is going to be another moment," Leiweke told ESPN. "We won't be sitting here in February 2016 still chasing Farmers Field." Now to be clear, Leiweke has thrown around deadlines throughout this process, and they've tended to come and go. But he did seem to stress that billionaire Phil Anschutz, who would be bankrolling construction of the stadium and perhaps the purchase of the team, has only limited patience in making this thing happen. "Phil has made it clear to me it is not his lifelong ambition to own an NFL team so we're going to do the best we can to try and get this done in the next year or two," he said. Think of the different constituencies Leiweke has to deal with: Anschutz, of course, and the NFL, and L.A. lawmakers, and last - and definitely least - the public at large. I wouldn't trust anything this guy says, but it's interesting to watch the dance.

There are multiple reasons why AEG has set a deadline for acquiring a team and beginning construction on Farmers Field. First, there is a sunset clause on the senate bill and the assembly bill passed last year to expedite legal challenges to Farmers Field that expires in January 2015. Also, if construction on Farmers Field doesn't begin by that time, Farmers Insurance Exchange could back out of their naming rights deal which is reportedly worth $700 million to $1 billion over 30 years. "We have clauses in our agreement with Farmers that if we don't have a team playing in the stadium by a certain date, they are no longer obligated on that naming right deal," Leiweke said. "More importantly, with (AEG head) Mr. (Philip) Anschutz, when you tie up that kind of capital and resources that we're tying up, when you spend $27 million on the environment report and another $45 million in design drawings, what you're not going to do is chase this for the next two years. It distracts from our organization and it distracts this city and everything we're doing here."

Four days of corporate discomfort and hypocrisy

That, of course, would be the Masters, and the exclusionary policies of the Augusta National Golf Club. Not much has changed in the 10 years since activist Martha Burk put up a stink over the males-only membership policy, but the matter has been raised once again in 2012 because IBM, one of the tournament's primary sponsors, had the audacity to select a woman as its CEO (the nerve!). At least four of the company's previous chief executives have been Augusta members, though it's unclear whether the woman in question, Virginia Rometty, is even interested in belonging to any club that would reluctantly have her as a member. As usual, the neanderthals who run the place insist that membership to the private club is a private matter. But IBM is a big, visible company and its logo will be all over the course this week. LAT columnist Mike Hiltzik takes a swing:

Augusta has maintained its indefensible men-only stance long past the point at which it should have joined the modern world. And even an abrupt about-face by the club wouldn't cleanse the hands of the public corporations that have chosen to play the role of enablers of Augusta's discrimination, such as IBM and tournament co-sponsors AT&T and Exxon Mobil, for all those years. All three companies pay lip service (at least) to diversity and corporate citizenship. How can they justify promoting an enterprise that flouts those same principles? Compare their behavior to the 1986 decree by Arco, then the largest corporation in Southern California, that it would no longer pay dues for executives at clubs that discriminated against women and minorities. The two downtown clubs that were most affected, the California and Jonathan clubs, altered their behavior pretty promptly.

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Augusta's claim of principle would be more convincing, if marginally so, if its record of discrimination were not so lengthy and contemptible. The club opened in 1933 and didn't admit its first black member until 1990 (the honor went to a Virginia television executive). One can only hope that Augusta didn't pat itself on the back too strongly then for standing up for the principle of equality set forth by Martin Luther King Jr., since King had been dead for 22 years at the time. This is what made Johnson's claim in 2002 that Augusta provides an opportunity "for men of all backgrounds to seek a place and time for camaraderie with other men" reek of hypocrisy, for it hadn't been so long before then that a man's "background" had counted for a lot at Augusta.

Keep that backstory in mind this weekend when you hear the CBS announcers whisper in reverential tones about what a swell place Augusta National is. Check out this nonsense from a network promo:

Business Update on KPCC: All quiet on the Dodger front

The new owners have said nothing this week about their big purchase, which is too bad because there's a lot that we still don't know about the deal, especially ownership percentages and financing. That's a big deal because it would indicate the projected return, which in turn could tell us how much money the team would have to make. Also this week is the environmental impact report on AEG's proposed football stadium. Available at kpcc.org and podcast (Business Update with Mark Lacter). Transcript is after jump

Continue reading "Business Update on KPCC: All quiet on the Dodger front" »

Wednesday morning headlines

Stocks fall sharply: Investors are choosing to go with the not-so-great news this morning in what could be an ugly session. Dow is down 175 points.

Private sector adds 209,000 jobs: The ADP numbers for March were slightly above expectations. The government's more comprehensive report is due out Friday. (Reuters)

Gas update: L.A. area prices fell a half-penny from Tuesday, with an average gallon of regular now at $4.324, according to the Auto Club. That's about a nickel lower than a month ago, but 30+ cents higher than a year ago.

Dallas storms still delaying L.A. flights: Service between the two cities has pretty much resumed, but it could take much of today to catch up from Tuesday's cancellations. Check your airline.

Still more tax breaks for hotels?: City Council is considering incentives to encourage modernization projects and better pay for workers. From the LAT:

In a motion introduced on Tuesday, the council agreed to ask several city departments for reports on how "public benefits" and other incentives could be used to help strengthen the local tourism industry, which the motion said is "lagging behind where it can be." Hotels, the measure said, are aging and falling behind in energy efficiency, and hotel workers are largely "underpaid and overworked." Councilman Bill Rosendahl, who helped write the proposal, said he wants to know what the city can do to create better wages for workers.

USC takeover of Coliseum in sight: Under a lease that could extend for 42 years, the school would be responsible for staffing, day-to-day operations, and event scheduling. From the LAT:

The confidential lease draft, which The Times obtained, states that the school would receive lucrative naming and advertising rights to the Coliseum. USC could restrict use of the stadium for "public interest" events, such as a community Fourth of July celebration, to eight per year. The [Coliseum] commission has also proposed including its parking lot, its roadside sign on the 110 Freeway and even the companion Sports Arena in the package.

Cutting back on doctor visits: The 4.7 percent decline in 2011 pairs with a 7.4 percent increase in ER visits - both the result of lost health coverage, according to a study. From the NYT:

Michael Kleinrock, director of research development at the institute, which consults for the drug industry, said his research showed that some people with health insurance at the start of the recession actually increased their visits to the doctor out of fear they were about to lose it. But as the economy has failed to strongly recover, "we're now seeing more people reset their expectations about how often they will use medicine."

April 3, 2012

Tuesday morning headlines

Stocks open lower: Investors are still being tentative, despite recent gains. Dow is down about 10 points.

Gas prices keep falling - slowly: An average gallon of regular in the L.A. area dropped another half penny from Monday, to $4.329, according to the Auto Club. That's down about a nickel from a month ago.

March car sales looking good: Chrysler was up 34 percent from a year earlier, while Ford was up 5 percent. Numbers from the other automakers are due out later today. From the NYT:

Over all, analysts said they expected automakers to sell more than 1.4 million vehicles in March, about 15 percent more than a year ago and the most since 2007. Unseasonably warm weather across much of the country helped draw shoppers to dealerships, as did declining unemployment, new models like smaller version of the Toyota Prius hybrid car, and wider availability of auto financing.

Anschutz ups his offer: The Denver billionaire is now willing to buy an entire NFL franchise, not just the minority stake of an existing club, AEG head Tim Leiweke tells the LAT. Up to now, Anschutz and the league had been squabbling over revenue. From the Times:

Leiweke said Anschutz instructed him to get the project clear of city approvals before beginning serious negotiations with a team. "Get past your obstacles," he recalled Anschutz telling him. "And if you get clear of that, I'll get in a room and make a deal with the NFL." Anschutz is willing to be flexible on a deal structure to address league concerns about AEG attempting to strip coveted assets, including marketing deals and relations with premium customers, from the control of the principal team owner, Leiweke said.

"Slime" blamed for bankruptcy: Ground beef processor AFA Foods, which has two plants in Vernon, is seeking protection from creditors. Company cites bad publicity in connection with its use of beef trimmings that have been dubbed "pink slime." From the LAT:

The Southern California plants have been operating "well below capacity" and one will be closed indefinitely this week, the company said. It did not provide details about likely layoffs among its 850 employees. The company said it supplies beef to major retailers, such as Safeway and Wal-Mart Stores, and fast-food outlets, including Burger King, Jack in the Box, Carl's Jr. and Wendy's.

Northrop workers urged to protest cuts: Republican Congressman Buck McKeon, a big supporter of the aerospace industry, says that the budget reductions being considered will result in layoffs. From the LAT:

"Stage an insurrection in this country," he told the cheering crowd. "When you leave here today call ... your loved ones" to help support the industry. The $487 billion in cuts are what the Pentagon and White House agreed on last summer, but there are nagging worries in the aerospace industry that Congress will cut as much as $600 billion more. In such a scenario, the Aerospace Industries Assn., an Arlington, Va., trade group, estimated 1 million jobs of all kinds would be lost nationwide, including 126,000 in California.

Feds raid pot advocate's home: No word on why agents raided the home of Richard Lee, along with the nation's first marijuana trade school and a popular dispensary. From the LAT:

A paraplegic who has used a wheelchair since a severe spinal injury in 1990, Lee has said he uses marijuana to treat muscle spasticity. He opened his dispensary Coffeeshop Blue Sky in 1999, worked with city officials to regulate the industry and founded Oaksterdam in 2007 to try to legitimize it. Lee used his marijuana earnings to put the legalization measure Proposition 19 on the ballot in 2010.

James Murdoch to leave British broadcaster: The son of Rupert is resigning as chairman of BSkyB to shield the company from the phone hacking scandal. The Murdoch family has a roughly 40 per cent stake in BSkyB. (NYT)

April 2, 2012

Monday morning headlines

Stocks turn upward: Wall Street is waiting for the March employment numbers that come out later in the week. For now, the Dow is up 30 points.

Gas prices edge lower: An average gallon of regular in the L.A. area is $4.335, about three cents lower than last week, according to the Auto Club. Prices have been gradually falling for the last several days.

Best airline performance: The low-cost carrier AirTran gets the top grade in 2011, followed by Hawaiian Airlines and JetBlue. From AP:

Overall, the report shows flying is getting better even through passengers grappling with fare increases, canceled routes and a seemingly endless parade of new fees may not feel that way, said Dean Headley, a business professor at Wichita State University who has co-written the annual report for 22 years. Airlines are slowly, steadily recovering from their meltdown five years ago, when, under the strain of near-record consumer travel demand, their performance tanked, he said. Industry performance for all four measurements was slightly better in 2011 compared with 2010.

"Hunger Games" still tops: The teen adventure made another $61 million at the domestic box office in its second weekend. That brings its worldwide total to $365 million. (Reuters)

No Tribune stations on DirecTV: The two companies failed to reach a retransmission deal over the weekend, leaving local satellite customers without KTLA, which is owned by Tribune. DirecTV said Tribune had reneged on a "handshake deal" and was behaving in "bad faith." (LAT)

True Religion wins suit: A NY federal judge ruled in favor of the Vernon-based jeans maker in a lawsuit against online Chinese counterfeiters. But good luck getting any of the $864 million that was awarded. From the LAT:

The defendants were a no-show in court, so the New York federal judge handed down a default judgment this month. The websites were shut down. Each defendant was also ordered to pay $8.15 million and any similar websites they created in the future will also be closed.

AEG caving on NFL demands?: Billionaire Phil Anschutz is prepared to buy a majority stake in a pro football team, his chief lieutenant Tim Leiweke tells LAT columnist T.J. Simers. Perhaps it's an effort to move along the downtown stadium plans, but here's the thing: There is no team for sale.

Oprah's woes: She's on CBS this morning taking softballs from pals Gayle King and Charlie Rose about her struggling network. "It's just press," she kept saying about the spate of negative stories. From the LAT:

Interviews with numerous executives who have been associated with the network paint a portrait of a channel that was dysfunctional from Day 1. Consumed with ending her long-running daytime talk show in Chicago with a bang, Winfrey was disengaged during crucial planning stages. Across the country, her staff in L.A. struggled to figure out how to translate Winfrey's personality or essence, what they called the "Oprah DNA," into compelling programming.

March 30, 2012

Friday morning headlines

Stocks stay on the plus side: Market is set to post its biggest quarterly advance in more than a decade. Dow is up about 50 points.

NFL stadium deal may be in jeopardy: See post below.

Consumer sentiment improves: Yes, that's despite higher pump prices. The Thomson Reuters/University of Michigan's Index rose to 76.2, the highest since February 2011, and above forecasts. (Reuters)

Gas update: L.A. area prices fell another half-penny from Thursday. An average gallon of regular is at $4.353, slightly below what it was a month ago, according to the Auto Club.

Apple supplier promises changes: Chinese manufacturing giant Foxconn pledged to sharply curtail working hours and increase wages. The move follows a wide-reaching audit workplace violations. From the NYT:

"There's this lingering sense among workers that they're in a dangerous place," Auret van Heerden, president and chief executive of the Fair Labor Association, said in an interview. But Foxconn has "reached a tipping point," he added. "They have publicly promised to make changes in a manner that they will have to deliver on it." Apple, which recently joined the Fair Labor Association, had asked the group to investigate plants manufacturing iPhones, iPads and other devices. In past months, a growing outcry over conditions at such factories has drawn protests and petitions, and several labor rights organizations started independently scrutinizing Apple's suppliers.

Villaraigosa wants retirement age raised: And the mayor says he might seek a ballot measure if the City Council doesn't go along. From the LAT:

Labor leaders said their members already had agreed to pension reforms and other concessions over the last three years, saving the city $800 million. They argued that Villaraigosa has done too little to find other revenue sources, such as collecting hundreds of millions of dollars owed to the city. "I think it's just a real failure of leadership," said Cheryl Parisi, chairwoman for the Coalition of L.A. City Unions. "How many more services is the mayor going to cut instead of trying to manage the city proactively?"

Jump in Dodger ticket sales: Opening Day is sold out, of course, but there's been an increase in season-ticket sales as well. Prices were reduced in December. (ESPN)

THQ layoffs: The Agoura Hills-based videogame publisher is scaling back its plans for the online version of the Warhammer 40,000 tabletop game. A total of 118 employees will be let go. (LAT)

Report: Downtown stadium deal may be in jeopardy

Billionaire Phil Anschutz refuses to budge on the financial terms that would return the NFL to L.A., Yahoo! Sports is reporting. Anschutz, who met with Commissioner Roger Goodell in December at the request of L.A. Mayor Antonio Villaraigosa, apparently wants to purchase a minority stake in a team - but only at a discounted rate. He also wants to essentially rent out the proposed stadium. From Yahoo's Jason Cole:

As a source explained: "It was friendly, but boiled down to the view that no NFL owner would accept the terms proposed. If [AEG] wanted to get that much control over an NFL franchise, their only option would be to buy a team. If they were willing to back off the control and buy a [limited partnership] stake for a reasonable price, then a shared interest in selling suites/clubs/sponsorships could be worked out."

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The bottom line is that because of that, politicians in Los Angeles may be shifting focus from the stadium project to simply enlarging the Los Angeles Convention Center. The stadium was supposed to be built on part of where the center currently sits and would serve as convention space when not being used for the NFL."The end game for this plan was the convention center all along," a Los Angeles-based source said Thursday. "That's what AEG wants to improve because the convention business is going to drive the whole area."

Of course, all this may be a negotiating dance among the various parties. You might recall that overhauling the convention center had been the carrot that AEG was waving to city officials in return for their support of a stadium. AEG, by the way, is supposed to release its environmental impact report on the project next week.

March 29, 2012

Thursday morning headlines

Stocks down again: For the third straight session, it's a seller's market. Dow is off 75 points.

Best Buy blues: The electronics retailer will close 50 big box stores as part of a cost-cutting effort. It also projected disappointing revenues for the year. From AP:

Best Buy, which has 1,450 locations nationwide and 2,900 globally, is focusing on closing some of its hulking stores to concentrate on smaller Best Buy Mobile outlets because of two emerging trends. Sales of TVs, digital cameras and videogame consoles have weakened, while sales of tablet computers, smartphones and e-readers have increased. And with the rise of competition from Internet rivals like Amazon.com, shoppers aren't flocking to big-box stores like they used to.

Jobless claims fall to 4-year low: Weekly filings for unemployment benefits were down 5,000, to 359,000. When applications are consistently below 375,000, it usually signals a drop in the jobless rate. (AP)

No change in U.S. growth: The economy grew at an annual rate of 3 percent in the final three months of 2011, unchanged from a previous estimate. (AP)

Gas update: L.A. area prices keep slipping ever so slightly, with an average gallon of regular at $4.358, down almost 3 cents from a week ago and about level from a month ago, according to the Auto Club.

Angered over Dodger deal: LAT columnist Steve Lopez wonders how (and why) owner Frank McCourt made out like a thief:

It's unbelievable and thoroughly unacceptable that Frank McCourt ends up flush, with close to $1 billion in his pocket once the sale is complete, along with a continued role in the operation. This is the guy who bought the team with other people's money, drove fans away, had to repay $100,000 to the team's charity after a state investigation and led the team into bankruptcy while draining its resources and living like a king.

Not yet a done deal: Sports law attorney Michael McCann points out that a federal bankruptcy judge will want to make sure where the $2.15 billion purchase price is coming from and whether creditors are assured of getting their money. From SI.com:

The proposed sale must also gain approval from Judge [Kevin] Gross, who is overseeing the Dodgers' sale as part of the team's Chapter 11 bankruptcy. He will conduct a hearing on April 13 in Delaware. Parties impacted by the sale, such as MLB, McCourt's creditors and his ex-wife Jamie McCourt, could submit briefs to Gross for his review. Although it is likely that Gross will approve the sale, he won't rubber stamp it. He will need to be satisfied that the sale addresses a core concern: McCourt's creditors will be paid back. Gross will want assurances, such as through financial records and testimony, that would corroborate the prospective owners' ability to pay this staggering amount.

News Corp. mulls sports channel: The move could provide higher affiliate fees and gives Disney-owned ESPN some competition. From Bloomberg:

In addition to Fox Sports Net regional channels and Fuel, News Corp. owns motor-sport network Speed, available in 78 million homes, the Fox Soccer Channel, the Big Ten Network, a partnership with the college sports conference, and Fox College Sports, consisting of Pacific, Central and Atlantic regional networks. News Corp. also shows games on broadcast television through Fox Sports.

Pay raise for B of A CEO: Brian Moynihan's compensation of $7.5 million in 2011 was up from $1.2 million the year before. But he did not receive a cash bonus for the third straight year, and his $950,000 salary was unchanged from 2010. (Charlotte Observer)

$7 million worth of fuel is missing: Turns out that millions of gallons of gas have been pumped at dozens of city fueling sites without any record of where it went, according to an audit by the City Controller. Some of the fuel may have been used for personal vehicles. (LAT)

Jump in LAX traffic: More than 4.4 million travelers passed through the airport in February, an 8.1 percent increase from a year earlier. The number of domestic passengers was up 10.1 percent. (Daily Breeze)

March 28, 2012

Magic facing a new kind of pressure to perform

Yes, the guy is a sports icon, an inspiration, a success in many facets of business. In 2009, Forbes estimated his net worth to be $500 million, much of that coming from his holding company, Magic Johnson Enterprises. And that's the point: Up to now most all of Johnson's success has been based on real estate and franchise investments that don't really involve day-to-day operations - and which don't come close to having the visibility of the Dodgers. Here's some backstory from Forbes:

The company currently oversees 16 business partnerships, ranging from public speaking deals with electronics retailer Best Buy and Aon Enterprises, to franchise deals with TGI Fridays and a 51/49 partnership with catering giant Sodexo for SodexoMagic LLC. Johnson and his staff have never publicly divulged financial terms of the relationships. The relationships include public appearances or co-branding efforts, such as Johnson's 12 signature 24-Hour Fitness Clubs. Magic Johnson Enterprises is also involved in a real estate partnership, Canyon Johnson Urban Funds, alongside Canyon Capital Realty. The partnership oversees a series of private equity real estate funds whose investors are public and private pensions and family foundations. The company currently oversees 50 residential and commercial properties, and claims it has overseen $4 billion in building, including projects in Brooklyn and Washington DC.

Nothing wrong with any of these ventures, but they're not the same as owning a piece of the Dodgers - and actually participating in the franchise. This time, he'll be effectively fronting a business whose customer base is passionate about its product - and he will quickly discover that there's a big difference between smiling for the cameras at ribbon cutting ceremonies and dealing with complaints about stadium security or Dodger dogs or some unsuccessful trade. Now obviously, the guy has a massive amount of goodwill going for him. That's what makes this deal so enticing. But at some point, it still comes down to winning and providing a good fan experience - and that's a tall order for any executive.

On another front, ESPN is reporting that the Dodger sale includes a 50 percent stake in the parking lots, which are said to have a value of $300 million. Current owner Frank McCourt will keep the other half.

[Controlling owner Mark] Walter said he understood the concerns, but insisted that McCourt will only have an "economic interest" in the land and not any control or influence over it. "Frank's not involved in the team, baseball, any of that," Walter said. "What Frank does have is an economic interest in land, but we control the parking and all the fan experience and that's of the utmost importance to us."

Earlier today, I was on KPCC's "Airtalk" with Larry Mantle and discussed the deal. Other guests were KPCC business blogger Matt DeBord, the LAT's David Wharton and Nick Roman, managing editor KPCC.

Early word from new Dodger owners

Mark Walter, who will be controlling the purse strings, tells the LAT's Bill Plaschke that he will remain in the background when it comes to day-to-day operations. That will be the bailiwick of Stan Kasten, who was an executive with the Atlanta Braves for many years. Magic Johnson will be the front-man. From the Times:

"I'm a baseball fan, but I'm not qualified to make baseball decisions, and I don't want to pretend to be,'' said Walter. ''I'm here to support and help my people as much as I can. I'm here to cheer as loud as I can.'' But since he still controls the purse strings, the bucks still stop with him, no? Will he give Kasten the freedom to spend them? How does he view the idea of paying the sort of big money for the sort of big free agents that the Dodgers have avoided signing during most of their 14-year championship drought? ''Stan has a very proven formula for building a team that doesn't win one year, but wins 12 years in a row [Atlanta Braves], so for me to tell him how you build that is completely inappropriate,'' said Walter. ''But having said that, we really want to win, and it's OK if, while we're producing the best players in the world, we also have the best players in the world on our field.''

Plaschke only had 20 minutes on the phone with Johnson, Walter and Kasten. An L.A. press conference is being planned. By the way, Walter, who is based in Chicago, plans to purchase a home in L.A.

Earlier: What's the skinny on the new controlling owner of the Dodgers?

Hollywood's Peter Guber part of the new Dodger ownership

Here's one of the nifty sidebars to the big sale: Guber, the movie producer best known for "Rain Man," "Batman," and "The Color Purple," joined the Magic Johnson investment group a few weeks ago and will have a minority stake (probably a small minority) in the storied franchise. Guber is not only a sports nut, but he runs a sports marketing and operating company that owns several minor league clubs. He also has a minority stake in the Golden State Warriors. The LAT's Bill Shaikin reported that Guber would help develop marketing strategies. I'm betting that we can expect a far different approach than that of Frank McCourt.


March 27, 2012

How much will Frank McCourt make on Dodger sale?

If you're having breakfast you might want to skip over this item. The Dodgers owner is likely to pocket more than $400 million, according to Forbes writer Mike Ozanian. Here's his math:

Let's say the Dodgers sell for $1.4 billion, though as I have written it is quite possible the price could be higher. McCourt's expenses associated with the sale of the team, such hiring Blackstone Group to be his investment banker, will run about $70 million. Subtotal profit: $1,330 million. McCourt will have to pay off the team's debt, which is $573 million. Subtotal profit: $757 million.

Subtract taxes ($190 million), the divorce settlement with Jamie ($131 million), and divorce attorney fees ($25 million), and McCourt is left with $411 million. Ugh.

March 26, 2012

Monday morning headlines

Stocks open strong: Fed Chairman Ben Bernanke presented a somewhat pessimistic picture on jobs this morning, but Wall Street is looking at the bright side. Dow is up 125 points.

What about long-term unemployed?: Despite recent job gains, the average unemployed worker has been out of work for 40 weeks. From the WSJ:

The diverging fortunes of the long and short-term unemployed worry many economists because it suggests the emergence of deeper, structural problems that could persist long after the rest of the economy recovers. Rather than returning to work as the economy recovers, as they have after past U.S. recessions, the long-term unemployed could effectively break off from the normal job market, ultimately forming an underclass of the more or less permanently unemployed. "It's really as though you just take a certain number of workers and just chop them off, throw them away and the rest of the economy behaves just fine," said Laurence Ball, an economics professor at Johns Hopkins University. "I've been surprised that this isn't viewed as more of a crisis."

Health care arguments under way: Pretty boring stuff this morning - Tuesday's session before the Supreme Court gets to the meat of the case: Arguments over the constitutionality of the insurance mandate. (NYT)

Public still confused about health care: That's unfortunate because as LAT columnist Mike Hiltzig writes, the legislation has already done plenty of good:

The effects of many such regulations are already visible in California, which has been ground zero of the insurance crisis. California's uninsured rate runs four to five percentage points higher than the national rate, in part because of its preponderance of small employers and big-box retailers such as Wal-Mart, which traditionally stick government and other coverage providers with the burden of insuring its workers. The state's individual insurance market is the nation's biggest, encompassing more than 2 million people whose lives have been at particular risk from insurance practices such as cancellation of coverage for sick or injured customers.

Gas update: Prices still flat - an average gallon of regular in the L.A. area is $4.366, basically unchanged from Sunday but down a couple of pennies in the past week, according to the Auto Club. Oil is still trading in the $105-$107 a barrel range.

Huge weekend for "Hunger Games": The action thriller about teenagers battling to the death generated $155 million, the third-biggest opening ever - and higher than even the most optimistic expectations. From the NYT:

The Hunger Games," rated PG-13, represents the kind of out-of-the-park successes that can transform a studio. The release represents a stunning reversal for Lionsgate, which has been struggling mightily of late, with flops over the last two years like "Killers," "Conan the Barbarian" and "Warrior." Lionsgate, until now mostly known for the defunct "Saw" franchise and for distributing Tyler Perry's movies, pursued "The Hunger Games" as part of a strategy -- set by its former movie chief, Joe Drake -- of taking on more ambitious films for bigger box-office payoffs. Mr. Drake, who was replaced at the studio in January but has remained to see "The Hunger Games" to fruition, was understandably ebullient over the weekend as ticket results trickled in.

Support for Brown's tax hike plan: Nearly two-thirds of those surveyed in an LAT-USC poll favor increasing the sales tax and raising taxes on the rich. The poll shows that taxing high earners is overwhelmingly popular. (LAT)

Dodger bidding down to three: After Major League Baseball signs off on the reamining players, which include investment groups led by hedge fund billionaire Steve Cohen and Magic Johnson, owner Frank McCourt and his advisors will pick a winner, possibly this week. (LAT)

Cable ratings sink: The average audience for 11 of the 15 most-watched cable channels has fallen from a year earlier. The biggest losers include Nickelodeon, TNT, and FX. Meanwhile, several channels have seen sharp growth. From the WSJ:

The big swings highlight a volatile new world, where viewers' taste and behavior are especially fickle. The on-demand availability of shows on the Web and cable services may damp the appetite for repeats of featured programs, as well as the syndicated reruns that have long been a mainstay of many cable channels. Increased investment in original programs--such as AMC's "Mad Men," whose new season debuted Sunday night--is making many cable channels more competitive with one another. Digital video recorders also make it easier for people to follow only hit shows and ignore others. That means a network's fortunes can rocket up one season, and crash down the next.

March 23, 2012

Obama's comment about Trayvon Martin rings true

martin.jpg "If I had a son, he'd look like Trayvon," the president said this morning, and the line is likely to resonate for months to come, maybe even years. James Fallows, who posted this juxtaposed shot of Martin and Obama, has an early take:

I don't know anything about Trayvon Martin's real character or potential, and I am not meaning to romanticize him. On the other hand, he was only 17 -- who knows what he might have become? The truth is that virtually no one in the United States actually does "grow up to be president." But a similarly important truth in America is the ideal that almost anyone could realize that dream. (And boy have we seen the "anyone" category broaden out in this latest primary season -- just a little joke.) As a conceptual and symbolic matter, Obama's election has forever opened a realm of possibilities for people who could "grow up to be president" -- and whose potential for such a future you can see in a photo like this.

Meanwhile LeBron James has posted this picture of himself and his Miami Heat teammates in support of Trayvon. Sometimes, moments like this take on a life of their own - and sometimes not, as in the shooting of Rep. Gabrielle Giffords. Who knows where this horrible story will lead, but there's no denying its resonance.

heat.jpg

March 21, 2012

Forget cash? Vegas gaming firm now accepting credit/debit cards

Well, kind of. Cantor Gaming is the first operator of race and sports books to accept plastic for funding an account, which is similar to getting a cash advance on your credit card and transferring money into an account. That's different from charging for individual race of sports bets, which remains prohibited. The change coincided with the NCAA Tournament. From the Las Vegas Review-Journal

"I see it more as an evolution of the gaming business," said David G, Schwartz, director of the Center for Gaming Research at the University of Nevada, Las Vegas. "You can already use your credit card to get a cash advance at a casino." Schwartz said in a society that is moving away from cash in general, the next step for the gaming industry is to offer slot machines and other games that accept credit and debit cards. He said the casino industry has trailed society at large when it comes to accepting credit cards.

March 20, 2012

Tuesday morning headlines

Stocks dip:After several sluggish sessions, this could be the day for a noticeable pullback. Dow is down almost 100 points.

Oil prices drop: New worries about China's economy has NY crude trading at about $107, down a buck or so. From the WSJ:

Oil prices also have been under pressure after Saudi Arabia, the world's largest oil exporter, said Monday it will work to ensure adequate global crude supplies, market stability and fair prices, analysts said. "Saudi Arabia is the central bank of oil markets," and its moves in preparation for the European Union embargo against Iran, another major oil producer, have significant influence on oil prices, said Bjarne Schieldrop, chief commodities analyst at SEB Commodity Research.

Little change in gas prices: An average gallon of regular in the L.A. is $4.385, virtually unchanged from Monday and down about a penny from a week ago, according to the Auto Club.

Dodger update: The Stanley Gold investment group is back in the mix of bidders after a mediator overturned Major League Baseball's rejection of Gold. That leaves five parties in contention to buy the team. (LAT)

OWN restructures: Oprah Winfrey's struggling cable channel laid off about 30 people (20 percent of the staff) and rejiggered its operations in L.A. and NY. Discovery Communications, which is a major investor, is expected to take a more active role in the channel. (Bloomberg)

Small pickup in Latino population: Other parts of the country saw declines in 2010, but L.A. grew by 1.5 percent. NY was up 2.4 percent. From the LAT:

The reason is that many Latinos who had left the big metropolitan areas to find jobs and cheaper housing in smaller cities earlier in the decade returned to those big cities during the tough economic times, [said William Frey, a Brookings Institution demographer]. Those gateway cities are "the anchors for new minorities, places where friends and relatives are ready to take in kids, provide social and financial support when times are bad," he said. He said it was unclear whether the broad distribution of Latinos across the country that occurred through much of the last decade would resume in coming years.

Appealing court cuts: California's chief justice warned of dangerous delays in the administration of justice if planned budget cuts take effect. More than $650 million in spending reductions have led to closed courtrooms, staff layoffs, and reduced hours. From AP:

In what she termed a "cruel irony," [Chief Justice Tani Cantil-Sakauye] said the same economic forces that have led to cuts at nearly all levels of state government are the same ones helping drive an increase in court activity. Those include cases for evictions, debt collections and child support modifications. The cutbacks have compounded problems in the courts, which she said already needed to add judicial positions in some fast-growing areas of the state such as the Central Valley.

Cal State plans enrollment freeze: University officials will not accept new admissions in the spring of 2013 (with a few exceptions), and pending next November's proposed tax initiative, the 2013 fall class has been put on hold. From the SF Chronicle:

Failure of the tax measure would trigger an automatic funding cut of $200 million for CSU under a scenario proposed by Gov. Jerry Brown. That loss would come on top of a $750 million budget hit that CSU already took this year. The uncertainty has university planners guessing how many students they can afford to admit, and how many employees they can afford to pay.

Subway stop stays near Bev Hills High: The Century City station is not what school officials had in mind (they were proposing Santa Monica Blvd.) From Patch:

The decision routes the subway under Beverly Hills High School, an alignment opposed by the Beverly Hills Unified School District, which argues that subway tunneling would interfere with major renovations planned for the high school. BHUSD contends Metro's seismic studies on the three Century City station options are flawed and that the decision was made in the interest of politics--not safety.

Fading interest in law school?: The numbers of admission tests fell 16 percent this year, the largest decline in more than a decade. From the NYT:

The decline reflects a spreading view that the legal market in the United States is in terrible shape and will have a hard time absorbing the roughly 45,000 students who are expected to graduate from law school in each of the next three years. And the problem may be deep and systemic. Many lawyers and law professors have argued in recent years that the legal market will either stagnate or shrink as technology allows more low-end legal work to be handled overseas, and as corporations demand more cost-efficient fee arrangements from their firms.

Changes to NYT paywall: Effective April 1, non-subscribers will only be able to read 10 free articles instead of 20. (All Things Digital)

L.A. bankruptcies keep dropping: Individual and business filings were down 10.6 percent in February compared with a year earlier. (OC Register)

March 19, 2012

Monday morning headlines

Stocks sliding a bit: Market is trading flat to start the week. Apple shares are up about 1 percent after the company announced that it would issue a quarterly dividend.

Apple to pay dividend: The world's most valuable company will also buy back $10 billion worth of stock. Both moves are aimed at whittling down a cash hoard of nearly $100 billion. From the NYT:

The company, which recently released the newest version of its iPad, was widely expected to announce a dividend. As its cash has piled up, Wall Street analysts and investors had begun to call more loudly for Apple to return some of it to shareholders. Although having too much cash is rarely seen as a burden for a company, Apple earns less than 1 percent in interest on the cash, which many investors view as wasteful.

Gas update: Pump prices remain basically unchanged - an average gallon of regular in the L.A. area is $4.385, down about a penny from last week, according to the Auto Club. Oil prices have also been flattish.

BP downplays Arco news: A spokesman said the decision to sell the Carson refinery, as well as its Arco retail outlets, was announced more than a year ago, and that the new owner is likely to retain the Arco name. From the Press Telegram:

BP spokesman Scott Dean said on Saturday that Arco will allow leases on 130 Arco branded sites to expire in the next two years and revert back to the Thrifty Oil Co., which owns the properties. Thrifty has a contract with Texas refiner Tesoro Corp. to operate those sites under the USA Gasoline brand. But 790 Southern California Arco stations will remain.

Patrick Soon-Shiong enters Dodger auction: The L.A. billionaire has joined an investment group that's being led by hedge-fund billionaire Steven Cohen. This is a bit of a surprise, since Soon-Shiong had been expected to join a competing bidding group that's led by Magic Johnson. From the LAT:

Cohen and Johnson lead two of the four bid groups whose structure and financing have been approved by Major League Baseball. The other two finalists, as of Sunday: St. Louis Rams owner Stan Kroenke; and a partnership between Memphis Grizzlies owner Michael Heisley and Tony Ressler, co-founder of Los Angeles-based Ares Capital.

Non-legacy airlines get high marks: Southwest, JetBlue and Virgin America are customer service champions, according to J.D. Power & Associates. Not cited: American, Delta or United. (LAT)

March 15, 2012

How on earth did anyone believe Josh Macciello?

Confession: The first thing that occurred to me while reading the LA Weekly's entertaining take-down of would-be Dodger bidder Josh Macciello was, Who the heck is Josh Macciello? I've been following the Dodger sale with some regularity and the name hadn't come up in the LAT, WSJ, or Forbes - three of the news outlets that are following the story most closely. So just to be sure, I did a Google news search under "Dodgers and Macciello" and the only thing I saw was this morning's Gene Maddaus piece (as well as the follow-up in LAO). So let's be clear: Sports radio aside, the real business media was ignoring this guy. Why? Well, probably because he comes off as such an obvious fake. From the Weekly

The financing for Macciello's bid appears to be a work in progress. Sitting at a long, dark wood dining room table, he explains that he is no longer using the gold mines, which he has touted in previous interviews. Instead, he has partnered with two gentlemen -- Myung Ho Lee and Fred Furrow -- who will put up the equity for the deal. They will take a 49 percent stake in the team, and Macciello will keep 51 percent. But Macciello makes it clear he is not using the gold to secure his 51 percent stake in the bid. So what is backing it? "There is no backing of the 51 percent," he says. "I can't get into the deal too much. The profit sharing will be in their favor." Asked why these two guys would agree to buy Macciello a baseball team, he has a ready answer: "They saw my business plan. All these up-front costs I'm paying for."

Gold mines? Mysterious Asian partner? Hard to believe anyone would have taken this stuff seriously - and yet guys like Macciello are pretty common in L.A.: Big talk, big ideas, and more often than not sketchy explanations about money. They're typically looking for an entree into Hollywood, which is the promised land for many a huckster (that appears to be how Macciello got started). All they need is a publicist and press packet and they can say pretty much anything they want - until it eventually comes apart, which it always does.

March 14, 2012

Wednesday morning headlines

Stocks nudging higher: Following up on Tuesday's big gain. Dow is up about 15 points.

Stinging exit from Goldman Sachs: Greg Smith is leaving the banking giant because of what he says is a drastic change in culture - and he laid out his feelings in a NYT oped piece that's getting lots of attention (and which Goldman is trying to refute):

It might sound surprising to a skeptical public, but culture was always a vital part of Goldman Sachs's success. It revolved around teamwork, integrity, a spirit of humility, and always doing right by our clients. The culture was the secret sauce that made this place great and allowed us to earn our clients' trust for 143 years. It wasn't just about making money; this alone will not sustain a firm for so long. It had something to do with pride and belief in the organization. I am sad to say that I look around today and see virtually no trace of the culture that made me love working for this firm for many years. I no longer have the pride, or the belief.

Gas, oil update: Pump prices are about where they have been - an average gallon of regular in the L.A. area rose two-tenths of a cent from Tuesday, to $4.398, according to the Auto Club. Prices are up just two pennies from a week ago. Oil is pretty much unchanged, at $106.71 a barrel.

Two more Dodger bidders turned down: Investment groups led by Stanley Gold and Leo Hindery didn't make the Major League Baseball grade, which leaves only four. The top bidder, according to the LAT and Forbes, is led by Stan Kasten and Magic Johnson, at $1.6 billion.

Brown to rewrite tax initiative: The revised measure would contain a smaller sales tax increase than what the governor had in mind and would require upper income earners to pay more than the tax increase Brown had called for. A deal could be announced as early as today. (LAT)

Big aerospace deals: Boeing and Hawthorne-based SpaceX will build and launch four communication satellites for companies in Mexico and Hong Kong. From the LAT:

The first satellite will take Boeing about three years to make at the company's complex in El Segundo, where about 5,200 employees work. Boeing did not disclose the price of the contract. Jay Gullish, a space and telecommunications analyst at Futron Corp., a Bethesda, Md., firm that tracks the industry, estimates that the deals should result in about $1 billion in new work.

Construction employment is up: California added the most jobs of any state in January - 8,900, or a 1.6 percent increase. Mild weather might be playing a role. (LAT)

Disney shareholders approve executive pay: CEO Bob Iger adds the post of chairman, and the company's directors are reelected. An activist shareholder and proxy-advisory firm had raised objections about compensation and corporate governance. (DJ).

American Apparel gets backing from George Soros: Well, sort of. The L.A.-based retailer/manufacturer has secured an $80 million credit line from Crystal Financial, a firm backed by the billionaire investor. (NY Post)

March 13, 2012

Tuesday morning headlines

Stocks extend gains: Dow is back over the 13,000 mark on some good economic news, but trading remains sluggish.

Pickup in retail sales: February's increase was 1.1 percent compared with a year earlier, helped along by autos, clothes and appliances. (AP)

Gas, oil update: Little change - an average gallon of regular in the L.A. area is $4.396, just two-tenths of a penny higher than Monday, according to the Auto Club. Prices have been flattish for more than a week. Crude is hovering around the $106-$107 mark, no big change.

Banks ignored errors in foreclosure process: Managers were aware of the problems and did nothing to correct them, according to federal investigators. From the NYT:

At Bank of America, which until late last year was the nation's largest mortgage servicer, two employees testified that they had raised concerns about whether documents were being properly notarized, but managers told them to proceed. One vice president said documents in her department were checked only for "formatting and spelling errors," not the underlying figures or facts in the case. "Bank of America did not establish effective control over its foreclosure process," according to the report, to be released Tuesday. And as foreclosure cases multiplied, Bank of America's management turned up the pressure on employees to move faster.

Fire Department provided inaccurate data: Instead of arriving at an emergency scene within five minutes 80 percent of the time, the actual percentage was 64 percent in 2008 and less than that the following two years. The inaccurate numbers were used in making deep cuts to the department. From the LAT:

Fire officials told The Times the department had traditionally used a six-minute time frame to calculate response statistics -- even though their reports used a five-minute time frame. The department also only counted responses to the most critical emergencies, which also improved the performance figures. Two years ago, officials began adjusting their calculations to bring them in line with the widely accepted five-minute standard of the National Fire Protection Assn., which says departments should hit that goal 90% of the time.

Alan Casden appears out of Dodgers bidding: The L.A. developer has been rejected by Major League Baseball, the LAT reports, reducing the field of potential buyers to six. Owner Frank McCourt can appeal Casden's rejection.

Fresno in financial trouble: Mayor Ashley Swearengin says more concessions are needed from city workers, warning that bankruptcy cannot be ruled out. But the presidents of the city's two public-safety unions said Swearengin is being overly dramatic for political reasons. (Fresno Bee)

Villaraigosa wary of tax initiatives: L.A.'s mayor says that raising taxes on the wealthy creates too much volatility in state revenue and will compound California's budget problems. Villaraigosa still may support one or more of the proposals. (LAT)

First Coda rolls off assembly line: The L.A.-based electric car company has faced numerous delays in getting its vehicles to market. Fewer than 5,000 cars are expected to be manufactured this year. (Contra Costa Times)

Disney holds annual meeting: Today's gathering in Kansas City could be a little messier than usual because of criticism about the company's corporate governance and the pay package for CEO Bob Iger. From the NY Post:

Iger's decision to assume the role of chairman in addition to CEO while lining up his successor riled some investors. The move has reignited a debate over the board's independence, with some shareholders accusing the company of backtracking on a commitment to keep the roles separate. In 2005, Eisner stepped down under pressure from shareholders, prompting Disney to split the CEO and chairman roles. Disney's board has come under fire from major shareholders, including Connecticut Treasurer Denise Nappier, who runs the state's pension fund, which owns 640,000 Disney shares.

February 29, 2012

Will Anaheim ever get an NBA team?

Now that the Kings seem determined to stay in Sacramento, OC billionaire Henry Samueli will need to scour the league for other candidates. Seems like a tough sell - before the Kings there were the Clippers and the former Vancouver Grizzlies that considered and then rejected Anaheim. One obvious possibility is the NBA-owned New Orleans Hornets, which is already being shopped around. Last week, the Times-Picayune reported that Newport Beach resident Raj Bhathal, who founded Tustin-based swimwear company Raj Manufacturing, "has emerged as a top candidate to purchase the Hornets from the NBA." But hold everything. From OC Register columnist Randy Youngman:

NBA commissioner David Stern said during his state-of-the-league address in Orlando over the weekend that the league was close to selling the Hornets and finalizing a renegotiated lease agreement with the state that would assure the team remains in New Orleans for the foreseeable future. The Times-Picayune reported that "any new owner or group must, as part of the sales agreement, sign off on a 10-year extension that would keep the team in New Orleans through 2024." And Stern says there will be no escape clauses in the new lease.

Other candidates for relocation: the Memphis Grizzlies and Charlotte Bobcats. But any relocation effort is likely to face strong opposition from Lakers owner Jerry Buss and Clippers owner Donald Sterling. Samueli would have to present a pretty compelling economic case to offset such pressure.

February 27, 2012

*Two more bidders eliminated from Dodger auction

Michael Heisley, owner of the Memphis Grizzlies; and Tony Ressler, a minority investor in the Milwaukee Brewers, are both out, according to the LAT. That leaves groups led by Magic Johnson, hedge fund billionaire Steven Cohen, investor Stanley Gold (and the family of the late Roy Disney), media executive Leo Hindery in partnership with Colony Capital's Tom Barrack, St. Louis Rams owner Stan Kroenke, Bev Hills-based developer Alan Casden, and Jared Kushner, owner and publisher of the New York Observer (and son-in-law of Donald Trump). From the Times:

The remaining bidders proceed to a multi-layered review by Major League Baseball, including consideration by two committees of owners. Each bidder then will be subject to a vote of all owners, with three-fourths approval required. If a bidder is not cleared to proceed to the ownership vote, McCourt can ask a court-appointed mediator to intervene. If a bidder is rejected in the ownership vote, McCourt has no recourse. MLB is expected to inform McCourt which bidders have been approved in mid- to late-March. McCourt is then expected to hold a final round of bidding before selecting the winner.

*WSJ reports that multiple bids have been received in the $1.2 billion to $1.5 billion range.

Kings owners pony up, expected to stay in Sacramento

The long-running saga between the Maloofs and the city of Sacramento appears to be ending, with co-owner Gavin Maloof announcing that his family was prepared to put up at least $75 million on a new sports arena. You might recall the negotiations last year about the Kings moving to Anaheim. From the Sacramento Bee:

George Maloof said the $75 million in additional payments, to be made over the course of the deal, will come partially from surcharges on arena tickets. He said the rest will come "definitely from us." Sacramento Mayor Kevin Johnson's initial description of the agreement differed from the Maloofs, in that he said the family would contribute $70 million to the project. He also said the team has made a long-term commitment to Sacramento. "It's game over," he said.

February 23, 2012

Caruso/Torre drop Dodgers bid

Rick Caruso cited owner Frank McCourt's refusal to include the Dodger Stadium parking lots in the sale, the LAT reports, citing sources. That has been one of the potential stumbling blocks to any sale because it would hamstring the new owner in operating the stadium. McCourt supposedly has at least one bid in which the buyer would let him keep the parking lots. From the Times:

Caruso and other bidders have believed the purchase of the parking lots would be negotiable. Caruso's decision to withdraw offers the clearest evidence yet that McCourt intends to keep the lots and try to build on them.

February 22, 2012

Private equity could play key role in Dodger sale

Several monster funds, including KKR, Thomas H. Lee Partners, Providence Equity Partners and Highbridge Capital Management, have expressed an interest in joining the 10 or so remaining bidders, Forbes writer Mike Ozanian is reporting. The private equity players are considering investments in the $200 million to $300 million range (purchase price is expected to top $1.5 billion, so these would be minority positions). From Forbes:

Although the Ontario Teachers Fund had great success with its ownership of the Toronto Maple Leafs of the National Hockey League and billionaire Tom Gores' Platinum Equity invested in the National Basketball Association's Detroit Pistons last year, it is very rare that funds make big investments in professional sports teams. But Wall Streeters have done very well with their personal investments in teams.

Wednesday morning headlines

Sluggish stocks: Not much going on - Dow is down about 15 points.

U.S. home sales have strong January: The 4.3 percent increase is the largest monthly gain in nearly two years. From AP:

The report offered a mixed picture of the slowly improving housing market. The number of first-time buyers, who are critical to a housing recovery, increased slightly to make up 33 percent of all sales. That's still below 40 percent, which tends to signal a healthy market. Sales of homes at risk of foreclosure also increased to 35 percent of all purchases. Those sales hurt the market by lowering broader home prices.

Obama proposes cut in corporate taxes: The plan would reduce the top rate to 28 percent, down from 35 percent, and eliminate a variety of tax breaks. There's little chance of it getting through Congress this year. (NYT)

Local pensions in trouble: Two dozen city and county governments, including the city and county of L.A., face a combined $135.7 billion in unfunded pension liabilities, according to a study. From AP:

The report found that none of the systems is at least 80 percent funded, which often is used as a benchmark for the minimum funding level of pension funds. The study assumed a 5 percent annual rate of return for the funds' investments, much more conservative than the 7.75 percent or greater annual return rate assumed by many of the funds.

New deal for car wash workers: Two L.A. car washes agreed to collective bargaining agreements with their workers who are members of the United Steelworkers union. Wages will be $8.16 an hour, an increase of about 2 percent. From the LAT:

There are now believed to be three union carwashes in the country, with Santa Monica's Bonus Carwash becoming the first last year. But if union leaders are able to stem -- let alone reverse -- years of declining membership, it will take the allegiance of these kinds of low-wage workers. "This is the future of the labor movement," said AFL-CIO President Richard Trumka, gesturing to the parking lot full of workers waving signs in English and Spanish, before he went on stage.

O'Malley drops out of Dodgers bidding: The team's former owner was trying to line up funding from a South Korean conglomerate. The 10 remaining bidders have been asked to submit new offers this week. (LAT)

Community colleges face shortfall: A budget deficit of $149-million is expected to result in more class cuts, layoffs, borrowing and probable elimination of summer programs. Apparently, revenue from student fees are below expectations. (LAT)

February 14, 2012

Kate Upton's unrelenting quest to reach horny guys

Yesterday came word that the 19-year-old lingerie model would be on the cover of Sports Illustrated's swimsuit edition, and now the folks at Carl's Jr. have released a two-minute preview of Upton's new commercial for the fast-food chain (she's peddling the Southwest Patty Melt). You might recall that local ad agency 72andSunny took over the Carl's account after the previous shop, El Segundo-based David & Goliath, tried - and failed - to veer away from the chain's sex-infused commercials. 72andSunny hired the guys responsible for the earlier spots. "I'm very honored," says Upton. (via OC Register)

February 13, 2012

Monday morning headlines

Stocks open higher: Not much cheering on the Greek austerity deal, but the Dow is up about 50 points.

Obama proposes tax change: The president wants the wealthiest Americans to be taxed on dividends at their top rate. For the top 2 percent of income-earners, that would be nearly 40 percent. From the NYT:

Mr. Obama once again proposed no change for taxing dividends of Americans with taxable income less than $250,000. Taxpayers in the 10 percent and 15 percent tax brackets - that is, households with up to about $100,000 in income - pay no income taxes on dividends or capital gains. Those in the 25 percent and 28 percent brackets pay a 15 percent rate on income from both dividends and capital gains.

Apple crosses $500 a share: Keep in mind that the stock was trading in the low $300s last June. At last check, shares had fallen below $500.

Apple suppliers to be inspected: An independent group called the Fair Labor Association will examine working conditions in Chinese factories where iPads and iPhones are assembled. This follows a NYT story that reported on accidents and long hours. (AP)

Skepticism about Greek deal: Several additional hurdles are facing Greek officials and already there's talk by one of the party leaders about renegotiating the terms. From AP:

The European Union's Economic Affairs Commissioner Olli Rehn on Monday called the Greek parliament's approval of a further round of budget cuts a "crucial step forward," but Germany insisted it will still take some time before the second bailout is delivered. Germany, which as Europe's biggest economy pays the largest part in bailout deals, said it won't give its final approval for the new aid payments until early March - after it is clear how well a debt relief deal with private bond holders would work and its parliament has voted on the new measures.

Modest expectations for 2012: Economists surveyed by the WSJ expect growth this year of 2.5 percent, up from 1.6 percent in 2011. They also expect U.S. employers to add more than two million jobs over the next 12 months, which would be the best spurt since 2006.

California solar deal in jeopardy: A construction permit from L.A. County is holding up the sale of a 230-megawatt plant in the Antelope Valley that First Solar sold to Exelon Corp. The deal could be nixed if the Energy Department doesn't begin funding a loan to finance the transaction. (WSJ)

Olympic ad sales looking good: NBC has sold more than $900 million worth of advertising for the summer games in London, which already exceeds the $850 million for the 2008 Beijing Summer Games. (NYT)

NBC News moving out of Burbank: the L.A. bureau for "NBC Nightly News," Telemundo, and local affiliates KNBC and KVEA will relocate to a new facility on the Universal lot by late 2013. (LAT)

February 10, 2012

Dirty little secret: Fans care a lot more than players

Maybe that explains why strikes almost never last an entire season: Players want the money, just like any other employee would. Team loyalty? Sorta, but... From LAT columnist Bill Plaschke:

I've always felt the Happiest Place on Earth was not Disneyland, but the hallway outside NBA locker rooms after a playoff elimination game. The players on the winning team are happy to keep playing, and the players on the losing team are happy to be going on vacation. The losers loudly joke with the winners, exchange phone numbers with them, brag about their upcoming trip to Mexico, then put their children on their shoulders and skip into summer.

[CUT

I've always felt that the greatest example of pro football unity does not take place in a fourth-quarter huddle, but in postgame handshakes. Have you seen how these combatants suddenly join forces on the field after the final gun, hugging, laughing together, hanging out like best friends, a dozen impromptu reunions? Remember how, on the field after a supposedly tough three-point loss last season, Dallas' Tashard Choice actually asked Philadelphia's Michael Vick for his autograph?

February 9, 2012

Thursday morning headlines

Stocks around the line: Wall Street doesn't seem especially impressed with the Greek bailout deal or the U.S. mortgage settlement. Dow is down a few points.

Mortgage settlement reached: Under the $26 billion agreement between the major services and the states, which include California, nearly two million current and former American homeowners could see some relief. From the NYT:

Under the plan, federal officials said Thursday, about $5 billion will go in cash payments to states and federal authorities, $17 billion will be earmarked for homeowner relief, roughly $3 billion will go for refinancing and a final $1 billion will go to the Federal Housing Administration. If nine other major servicers join the pact, a possibility that is now under discussion with the government, the total package could rise to $30 billion.

Greeks reach deal: Political leaders agreed to a package of harsh austerity measures in return for a financial bailout. The deal is expected to include $172 billion in new loans, saving the nation from a default. From the NYT:

Once the deal is finalized and the measures are approved by the Greek Parliament in the coming days, the lenders are expected to begin releasing to Greece the aid it needs to prevent a default when its next debt payment comes due on March 20. The deal is also expected to pave the way for a bond swap under which private investors would take losses of as much as 70 percent -- a deal that must be completed well before the debt comes due.

Jobless claims fall again: Weekly filings dropped 15,000, to 358,000, lower than expected and nearing a four-year low. When applications fall consistently below 375,000, it usually signals a drop in the unemployment rate. (AP)

Kodak to stop making digital cameras: Really the end of an era for the company that brought photography to the masses. The company, which filed for bankruptcy protection, says it will look for other companies to license its brand. (AP)

More TV streaming: Television viewership as a whole is steady, mostly because people over 65 are watching more than ever, but Nielsen reports a decline in viewing among Americans under 35, even when DVR viewership is factored in. From the NYT:

Adults ages 25 to 34, for instance, watched about four and a half fewer hours of television in the third quarter of 2011 than at the same time in 2010 -- the equivalent of about nine minutes a day. Viewers ages 12 to 17 also watched about nine fewer minutes a day. The demographic in between, those ages 18 to 24, watched about six fewer minutes a day.

Apple to introduce iPad 3: It'll be much faster than the iPad 2, reports All Things Digital, with improved graphics. Announcement is set for first week in March, and the retail roll-out sometimes after that.

Another Dodger bidder: Add Michael Heisley to the list. He's the billionaire owner of the NBA's Memphis Grizzlies, and one of 11 bidders that survived the initial cut. (LAT)

Sign of the times: Californians are generally feeling more optimistic about the economy, according to the Citibank survey, but half of those questioned say they've dipped into investments to pay for routine living expenses. (LAT)

Programming note: I'll be on City Maven Radio Hour at 11 a.m. on LATalkRadio.com.

February 7, 2012

Clippers can't catch a break - Chauncey Billups out for season

MRI results show that the Clippers guard has a torn left Achilles' tendon, the LAT reports, citing Coach Vinny Del Negro. That's a killer injury, requiring months of convalescence. Billups, working in concert with Chris Paul, is one of the reasons the Clippers are off to such a strong start.

Tuesday morning headlines

Stocks drift lower: Could be another sluggish session, as investors keep an eye on Greece. Dow is down about 30 points.

California says no to bank deal: At least for now. More than 40 states have signed onto a proposed settlement with mortgage servicers, but state Attorney General Kamala Harris is looking for better terms. NY is also holding out. From the LAT:

The long-sought deal would provide relief for homeowners and settle a host of investigations into the foreclosure paperwork practices of the five largest mortgage servicers. The size of California's mortgage market -- about 14% of existing home loans nationwide, according to industry data company CoreLogic Inc. -- makes Harris a major player in the down-to-the wire talks with Bank of America Corp., JPMorgan Chase & Co., Wells Fargo & Co., Citigroup Inc. and Ally Financial Inc.

Gas prices inch higher: An average gallon of regular in the L.A. area is $3.849, according to a government survey, up a couple of pennies from last week. Gas is unusually expensive for this time of year.

Another Dodger bidder: He's Jared Kushner, son-in-law of Donald Trump and publisher of the New York Observer. The Kushner bid is one of at least nine to advance to the second round. From the LAT:

The bid would be funded primarily by the Kushner family, whose net worth is not publicly available. In 2006, the Kushner Cos. bought a Manhattan office complex for $1.8 billion -- at the time, the highest price paid for an office building in the United States, according to the New York Times.

Protesting FAA bill: The Senate finally passed legislation aimed at moving the nation's aviation system into a new era of GPS-dominated air traffic control. But the bill included a controversial provision that would make it difficult for transportation workers to unionize. From the Daily Breeze:

Just hours before the Senate voted, about 200 flight attendants and their supporters held a so-called "Occu-Fly" demonstration at Los Angeles International Airport to urge lawmakers to reject the reauthorization bill. The group opposed the compromise struck up by House Republicans and Senate Democrats that calls for a 50 percent support rate among transportation workers to hold union elections, a significant hike from the current 35 percent threshold.

Brown's tax measure has company: Proponents of two other plans are still seeking to get on the November ballot, despite concern that multiple initiatives might be confusing to voters and result in defeats for everyone. From the Mercury News:

The campaign to raise taxes on millionaires, headed by the California Federation of Teachers, kicked off its signature-gathering campaign with rush-hour banner displays on highway overpasses throughout California. And wealthy civil rights attorney Molly Munger gave a full-throated defense of her separate tax-hike initiative at the California PTA's state conference, promising she'd reach into her own deep pockets to ensure a win on behalf of schools. "We're going to get this on the ballot and we're going to win, too," Munger told reporters after addressing the PTA group.

Cutbacks at Fisker Automotive: Work has been stopped at a former GM plant in Delaware, where the Anaheim-based company plans to build a plug-in hybrid. Fisker says it delayed work because of "ongoing discussions" with the Department of Energy regarding funding. (LAT)

February 6, 2012

Who are the strongest contenders for the Dodgers?

Still too early to determine a victor, but Bloomberg Businessweek reports that three bidders are at the top of the heap: Magic Johnson (with partners Mark Walter and Stan Kasten), Rick Caruso (aligned with Joe Torre), and hedge fund billionaire Steve Cohen. They're considered strong contenders because the financing is coming from a single source. By the way, it costs $25,000 just to get into the bidding. A few other tidbits from the Bloomberg piece:

While management underscored stadium improvements such as new seats and redone dugouts, multiple bidders said they would probably have to spend as much as $450 million over the next few years on payroll and upgrades to the ballpark and surrounding infrastructure. Blackstone started conducting management presentations this week, which the bidders say they hope will make the Dodgers' capital needs and revenue capabilities clearer.

Riding over everything, of course, is the media play. Time-Warner Cable, Comcast, and Fox are all hovering, though it's also possible that the eventual owner will want to form his own sports network - keep in mind that the Yankee network YES is the biggest regional sports network in the country.

Monday morning headlines

Stocks take a pause: To be expected after last week's rally. Dow is down about 30 points.

Latinos scoring jobs: They're the only demographic group whose employment numbers have returned to pre-recession levels, though the jobless rate of 10.5 percent remains higher than the 8.3 percent national rate. From the LAT:

The construction industry remains weak, but other sectors in which Latinos have a relatively large share of jobs -- hotels, food services, healthcare and manufacturing, for example -- are seeing more robust job growth. Mining support services, where Latinos make up about a fifth of the workers, are expanding employment significantly. And, because Latinos account for a relatively small share of workers in the public sector, they aren't bearing the brunt of deep cuts in government jobs.

California reenters mortgage talks: Attorney General Kamala Harris is back negotiating with the major banks on a settlement. From the NYT:

The potential support from California and New York comes in exchange for tightening provisions of the settlement to preserve the right to investigate past misdeeds by banks, and stepping up oversight to ensure that the financial institutions live up to the deal and distribute the money to the hardest-hit homeowners. The settlement would require banks to provide billions of dollars in aid to homeowners who have lost their homes to foreclosure or who are still at risk, after years of failed attempts by the White House and other government officials to alter the behavior of the biggest banks.

Super Bowl ratings down a notch: The big game posted a 47.8 overnight rating/71 share, down a tenth from last year's game on Fox. It was the third-highest Super Bowl rating ever. (deadline)

Encouraging turn on bullet train: The high-speed rail idea is being recalibrated by state officials, and LAT columnist George Skelton likes what he sees.

Construction still would start next fall in the rural San Joaquin Valley, the thinking goes. But simultaneously there'd be major upgrades to conventional lines in the Los Angeles and San Francisco regions. Those upgrades would amount to initial blending of the Southern California Metrolink and Bay Area Caltrain systems into the ultimate 500-mile high-speed rail line from Los Angeles to San Francisco.

Caruso on running for mayor: The billionaire developer tells Daily News reporter Rick Orlov that for now he's focusing on a bid for the Dodgers. "After that decision is made, Caruso said, "I will make a decision on mayor."

Seattle eyes Sacramento Kings: City officials are working with an SF-based hedge fund manager to bring the team to Seattle - as well as build a new arena, the Seattle Times is reporting. The Maloof family, which owns the team, has repeatedly said it has no interest in selling.

Southwest to carry sports: Well, sort of. The airline will soon offer baseball and pro football for passengers traveling with Wi-Fi-enabled laptops or other portable devices. (LAT)

February 3, 2012

Guys can be such... well, idiots

Just two of the not-so-subtle ads to be shown during the Super Bowl. And I'm not even including the Go-Daddy silliness.

*NFL might move to L.A. through expansion

That's what Commissioner Roger Goodell said on NBC last night. And Goodell prefers adding two franchises, not just one, because he would like to see 34 teams in the league (that avoids scheduling hassles). Up to now, it's been assumed that the NFL would return to L.A. by moving one of the existing teams. There have been several possible candidates, but little indication of a deal. That's why Goodell's expansion comments are so significant. Goodell told Bob Costas that several issues in L.A. remain unresolved, including which of the two stadium proposals (downtown or in the City of Industry) are considered the best. Some months ago, Goodell said he didn't expect a team coming to L.A. in 2012. (AP)

*Update: Hold everything - Goodell is now pushing back on the expansion idea. From AP:

During his annual Super Bowl news conference, Commissioner Roger Goodell said Friday that adding to the league's 32 teams "has not been on our agenda" and that he doesn't "see that in the foreseeable future." He also said the NFL wants "to keep our teams where they are."

Friday morning headlines

Stocks taking off: Good news on the jobs front, and the Dow is up 140 points.

Why the employment report was so good: In a nutshell, most everything that was supposed to go up went up and most everything that was supposed to go down went down. January's jobless rate fell to 8.3 percent, with payrolls jumping by 243,000 jobs. From Bloomberg:

Gains in employment were broad-based, including manufacturing, construction, temporary help agencies, accounting firms, restaurants and retailers. Employment, overtime and hours worked in factories increased as manufacturers, who have been leading the two-year recovery, ramped up production to rebuild inventories and meet global demand for their goods. Assembly-line workers put in an average 41.9 hours of work each week, the most since January 1998, while overtime hours climbed to the highest since March 2007. Manufacturing payrolls increased by 50,000 in January, the most in a year.

Some caution is in order: NYT columnist Floyd Norris points out that while the economy gained 243,000 jobs in January it also lost 2.7 million jobs for the month. Huh?

The difference in the two numbers is in seasonal adjustment. Employment always falls in January, as temporary Christmas jobs end. So the government applies seasonal adjustment factors in an effort to discern the real trend of the economy apart from seasonal fluctuations. The actual survey showed the big loss in jobs. The seasonal adjustments produced the reported gain of 243,000 jobs. A reason to doubt the number is that there has been a tendency in this cycle for the seasonal factors to overstate moves, in both directions.

What about California? First-quarter growth is pushing up the Chapman University economic index. Three of the four components of the indicator turned up in early 2012. (LAT)

Gas prices edging higher: An average gallon in the L.A. area rose almost a nickel, to $3.794 per gallon, according to the Auto Club. Look for continued increases.

New convention hall design: The remade layout, part of AEG's downtown football complex, would be in one contiguous space. The convention center is currently made up of two buildings, which has been a serious handicap in drawing business. (Daily News)

Macy's to Martha: After all we did for you!: The department store giant is accusing the daytime diva of a sneaky betrayal in cutting a deal with JC Penney. From the NY Post:

In a thinly veiled reference to the insider-trading scandal that devastated the domestic diva and her company a decade ago, Macy's said in its explosive lawsuit that it "took a risk" when it signed a long-term contract with Stewart in 2006 -- only a year after Stewart had served a five-month sentence in federal prison. "The 'Martha Stewart' brand was under pressure by very public proceedings and their aftermath involving Ms. Stewart," Macy's charged in the scathing Jan. 23 suit made public yesterday, noting that it had begun talks with Stewart in 2005, when she was still under home surveillance by law enforcement.

Local ad shops represented in Super Bowl: Automakers are advertising heavily during Sunday's game, and L.A. has several shops that specialize in car ads. From the LAT:

Los Angeles has long played a starring role in Super Bowl advertising. Chiat/Day revolutionized the sport more than a quarter-century ago with "1984," the groundbreaking, Orwellian ad that introduced Apple's Macintosh computer. Last year, Deutsch LA devised the most buzzed-about Super Bowl commercial, in which a little boy dressed as Darth Vader uses his powers to start his pop's VW Passat. The spot attracted 50 million views on YouTube, and this year the team is taking another crack at the"Star Wars" theme.

Legislative maneuver on budget: Lawmakers voted to increase the state's ability to borrow in order to cover day-to-day expenses. The idea is to plug a gap in the current budget year. (LAT)

January 31, 2012

Tuesday morning headlines

Stocks bouncing around: After opening on the up side, the market is paring back - perhaps influenced by not-so-wonderful economic news. Dow is about even.

Another weak month for home prices: The L.A. area was down 1 percent from October to November and down 5.4 percent from November 2010. Most of the 20 metro areas surveyed posted monthly and annual declines. From Calculated Risk:

"Despite continued low interest rates and better real GDP growth in the fourth quarter, home prices continue to fall. Weakness was seen as 19 of 20 cities saw average home prices decline in November over October," says David M. Blitzer, Chairman of the Index Committee at S&P Indices. "... Nationally, home prices are lower than a year ago. The 10-City Composite was down 3.6% and the 20-City was down 3.7% compared to November 2010.

Drop in consumer confidence: Kind of unexpected given the recent batch of positive news. Conference Board survey shows that consumers are concerned about gas prices and the availability of jobs. From Bloomberg:

Consumers are "less optimistic about business conditions and their income prospects," Lynn Franco, director of the Conference Board's Consumer Research Center, said in a statement. "Recent increases in gasoline prices may have consumers feeling a little less confident this month."

Dodger update: Peter O'Malley is teaming up with a South Korean conglomerate. (Foreign ownership is not unprecedented - the Seattle Mariners' ownership group includes Japanese investors.) (LAT)

Brazilian Blowout suit settled: A North Hollywood company will have to warn hairstylists about potential dangers of the hair-straightening treatments, according to terms of the settlement with the California attorney general. (LAT)

Good quarter for Mattel: Strong holiday demand for Barbie dolls resulted in better-than-expected earnings for the El Segundo toy company. (AP)

Gas prices creeping up: An average gallon of regular in the L.A. area is $3.832, according to the government survey, up four cents from last week.

Greuel gets Hollywood money: L.A.'s city controller has received donations from Steven Spielberg, David Geffen, Jeffrey Katzenberg, J.J. Abrams, and other showbiz heavyweights for her mayoral campaign. (THR)

Kaiser nurses on strike: The 24-hour walkout, which involves 160 Kaiser Permanente facilities statewide, is in response to a proposal to cut health-care and retirement benefits. Kaiser says it has contingency plans. (KPCC)

January 30, 2012

Mark Cuban on not advancing in Dodger auction

The billionaire owner of the Dallas Mavericks tells Access Hollywood that the sale is too intertwined with the team's TV rights deal.

"The economics got so out of control because the Dodgers' TV deal's up for bid and so there's a lot of groups coming in going, 'This TV deal's worth so much money that we're gonna pay whatever it takes to get the Dodgers.' And so they're buying the TV rights deal first and the team second," Mark said. "There's a lot of great people bidding on it. I just wasn't going to go through that given all those circumstances," he added.

Under a settlement reached with Fox earlier this month, Dodger owner Frank McCourt agreed to abide by the terms of the existing TV contract - that is, Fox has an exclusive 45-day period starting in October to try to negotiate an extension. The contract also prohibits the Dodgers from talking to other potential buyers. Of course, the interested bidders have been factoring the media rights into their prices.

Monday morning headlines

Stocks open lower: Dow is down about 100 points amid signs that the market may have peaked out for a while.

Incomes up, spending flat: Consumers were careful with their shopping in December as spending rose only 0.1 percent. For all of 2011, the gain was 4.7 percent, the largest increase since 2007. Incomes, meanwhile, grew at an annual rate of 2 percent in the fourth quarter. (Reuters)

Pep Boys bought by L.A. investment firm: The Gores Group, which is headed by billionaire Alec Gores, is acquiring the auto parts chain for $791 million. Pep Boys has more than 700 locations. (AP)

Kirk Kerkorian on the hunt: The 94-year-old Bev Hills billionaire has recently brought on the former COO of MGM to search out entertainment properties. From the WSJ:

[Jay Rakow, an executive at Mr. Kerkorian's investment vehicle, Tracinda Corp.,] declined to say what companies his boss was eyeing but said Mr. Kerkorian sees opportunities in new forms of online distribution of films, and in emerging markets including China, India and Latin America. Mr. Kerkorian might buy a single entity or roll up several smaller ones, Mr. Rakow said. He doesn't have a particular dollar figure or timetable in mind for his investment, Mr. Rakow said. "We are casting a wide net," Mr. Rakow said.

Dodger update: Mark Cuban is out of the bidding, while L.A. billionaire Tom Barrack has joined up with investor Leo Hindery, the LAT reports. At least eight groups remain in the running.

Has $1.2 billion disappeared?: Officials poring over the finances of MF Global Holdings increasingly believe that much of the customer money might never be recovered, the WSJ reports:

As the sprawling probe that includes regulators, criminal and congressional investigators, and court-appointed trustees grinds on, the findings so far suggest that a "significant amount" of the money could have "vaporized" as a result of chaotic trading at MF Global during the week before the company's Oct. 31 bankruptcy filing, said a person close to the investigation. Many officials now believe certain employees at MF Global dipped into the "customer segregated account" that the New York company was supposed to keep separate from its own assets--and then used the money to meet demands for more collateral or to unfreeze assets at banks and other counterparties as they grew more concerned about their financial exposure to MF Global.

Brown dispute cost estimates for high-speed rail: The governor said the project will not run as much as $100 billion, and that cap-and-trade fees will be among the sources of funding. (Capitol Alert)

January 26, 2012

Lakers most valuable NBA franchise

The purple and gold top the NY Knicks, according to the latest Forbes ranking, thanks in part to a new 20-year television deal with Time Warner Cable worth an average of $200 million annually. That drives up the value of the Lakers to $900 million, up 40 percent from a year earlier. In third place, after the Knicks, it's the Chicago Bulls, followed by Dallas and Boston. In general, blockbuster TV deals, along with a new collective bargaining agreement, have boosted team values by 6.5 percent over last year, to $393 million. From Forbes:

Time Warner will create two new regional sports channels to feature the Lakers, one in English and one in Spanish. The Lakers have by far the biggest TV audience of any NBA club, averaging 271,000 households on Fox Sports West last season, which was 73% higher than the next-most-watched team, the Chicago Bulls. The NBA's TV ratings soared nationally and locally last year, jumping more than 50% on regional sports networks for at least eight teams.

[CUT]

NBA revenues hit a record $4 billion last season, up 4.2% from the prior year. The average NBA team had an operating profit (earnings before interest, taxes, depreciation and amortization) of $5.8 million last year, down 5% from the prior year. That profit is inflated by the top teams as the Lakers, Knicks, Bulls and Heat average $46 million in earnings while the rest of the league had a cumulative loss. Overall, 15 teams lost money, led by the Charlotte Bobcats and Memphis Grizzlies, who both were $25 million in the red.

January 25, 2012

Wednesday morning headlines

Stocks in retreat: More worries about Greece, though Apple's stupendous earnings report is helping tech issues. Dow is down 50 points.

About those Apple results: The company's profit more than doubled during the fourth quarter, thanks largely to sales of the iPhone 4S. From the NYT:

With the 37 million iPhones that customers snapped up over the holidays, Apple has sold 183 million of the devices since the product went on sale in 2007. Revenue from the iPhone and iPad -- neither of which could be bought five years ago -- now accounts for 72 percent of Apple's total revenue, underscoring the transformation of the company. And although phones based on Google's Android operating system had been gaining more customers in recent years, Apple has begun to chip away at some of the advantages of these phones, narrowing Android's lead in the United States over the holidays.

Interest rates on hold?: Looks like they'll stay at near zero for at least two more years, according to Federal Reserve forecasts. More appraisals of the economy are expected after the central bank meets today. (Reuters)

Another bad notice for bullet train: State auditor warns that the $98.5-billion project has become "increasingly risky" because of uncertainty about funding. From the LAT:

"The success or failure of the program" depends on obtaining up to $105 billion in additional funding, which has not been identified, the report says. It further mentions that the cost estimates for the initial phase do not include operating or maintenance outlays, which the auditor estimates could total roughly $97 billion between 2025 and 2060. Moreover, concerns have been raised about ridership projections that form the basis of the state financial plan for the system, including those of a group of experts hand-picked by the head of the rail authority, the state auditor said.

Dodger owner gets skewered: Former Fox executive Bob Daly, who was responsible for selling the team to Frank McCourt, tells LAT columnist T.J. Simers that "we didn't realize what a bad guy he was."

"When we were going through the process of selling the team, McCourt seemed like an OK guy. I sat down with him and told him people here were under contract, but they've been like a family and so if he wanted to make changes, do so with respect. "As everyone knows he didn't, so I told him off. It took five or six more years for a lot of other people to catch up to where I was with him. He did some good things, but inherently he was not a nice guy. He put himself before the Dodgers, and this is a team owned by the fans and the city of Los Angeles."

Big tourism year for L.A.: A record year, in fact, with 27 million visitors in 2011, a 4.2 percent increase over the previous year. Overseas visitors made a big difference, with Australia leading the way.(LAT)

"The Artist" moves into more theaters: The Oscar-nominated film that very few people have seen will be in an additional 700 theaters beginning Friday. To date, the film has only grossed $12 million. (THR)

Televisa turns to English: The Mexican TV giant is in partnership with Lions Gate to create English-language programs. Meanwhile, Nickelodeon announced plans to adapt a Televisa telenovela, "Alcanzar una Estrella" into an 80-episode English-language show. (WSJ)

January 24, 2012

Tuesday morning headlines

Stocks slump: Discouraging news out of Europe isn't helping. Dow is down about 60 points.

Romney's taxes: He reported income of $21.7 million in 2010 and paid $3 million in taxes - an effective rate of 14 percent. He also made $3 million in tax-deductible charitable donations. (Washington Post).

Dodgers receive opening bids: More than a dozen investment groups are interested, and several of the bids were in excess of $1 billion, the WSJ reports.

Bankers didn't require the bids to be binding or ask for bidders to submit a deposit with their offers. Bidders also didn't have to provide firm promises of financing. As a result, several bidders said, there was little reason for them to not submit high offers with hopes of surviving to a second round.

Academy Award nominees: "The Artist," "Hugo," and "The Descendants" lead the way. (NYT)

Greece update: Eurozone officials rejected a final offer from bondholders, which is a big blow to resolving the nation's debt crisis. From Reuters:

Greece's top official at the Brussels meeting remained stoic, saying the country had the euro zone's support to complete the debt swap talks in the "coming days." "In reality, we are now entering the final stretch," , Finance Minister Evangelos Venizelos said in a statement. "I believe everyone has now realized that Greece must be supported in its effort, which is of vital importance not only for us but for the euro zone as a whole and the global economy."

Calpers returns just 1.1% in 2011: That's a fraction of the projected 7.75 percent annual returns by California's pension fund giant. Last year, Calpers earned 12.5 percent. From the LAT:

Calendar-year results, however, are used only as indicators, a CalPERS spokesman said. The fiscal year returns, posted as of June 30 each year, are the legal basis for annual decisions by the CalPERS board to raise or lower the contributions it gets from 3,100 participating government agencies, including the state of California.

Happy hours at Starbucks: The coffee giant will be offering beer and wine in four to six L.A.-area locations by the end of the year. From the LAT:

Starbucks is looking to differentiate itself from competitors as varied as Dunkin' Donuts, fast-food behemoth McDonald's Corp. and the fast-casual Panera Bread Co. chain, analysts said. It's a "natural extension" for Starbucks to move into specialty beverages, said Jason Moser, an analyst with Motley Fool. The coffee chain in November bought San Bernardino natural juice company Evolution Fresh Inc. for $30 million, promising to launch a series of "wholesome" juice shops.

Downtown theater to become hotel: The historic United Artists building at Broadway and 9th Street will be transformed by a chain of boutique inns. The 180-room hotel will have a pool, restaurant, bar and 1,600-seat theater. From the LAT:

The complex at 927 S. Broadway was built in 1927 in part to provide a theater for the movie production company founded by film luminaries Mary Pickford, Douglas Fairbanks, Charlie Chaplin and D.W. Griffith. The Spanish Gothic theater was designed by C. Howard Crane and the office tower by Walker & Eisen, the team behind other local landmarks including the Fine Arts Building downtown and the Beverly Wilshire hotel in Beverly Hills.

LAX contract awarded: Westfield Concession Management has received a 17-year lease for the Theme Building, Terminal 2 and the Tom Bradley International Terminal. Westfield will be charged with bringing in restaurants and retailers. (Daily Breeze)

Burkle buys stake in Relativity Media: It's the billionaire's second investment this month in the film and television studio led by Ryan Kavanaugh. No terms disclosed. (Bloomberg)

Silicon Valley salary is 100K: Software and other engineering employees made, on average, $104,195 last year, according to a survey, a 5.2 percent increase from a year earlier. (WSJ)

January 23, 2012

Monday morning headlines

Stocks hover around line: Attention focusing on a possible Greek debt deal. Dow is down a few points.

Greece update: They're working on a deal in which private bondholders would lose 65 to 70 percent on their Greek bonds. Several details remain unresolved. (Reuters)

Dodger auction begins today: About 20 bids are expected for the team. Process is supposed to be completed by April 1. The LAT has a Q&A on the bidding.

No urgency on pension reform: LAT columnist George Skelton says there's a time bomb ticking, and yet nobody seems to be moving very quickly:

Gov. Jerry Brown has proposed a 12-point pension overhaul, but seems to be telling legislators to take their time -- a dangerous suggestion in Sacramento. "When we're dealing with a 40-year matter," the governor told a legislative hearing on pensions last month, "you don't have to deal with it in 40 minutes or 40 days or even 40 months. We have time here." Not much. And certainly not 40 months if Brown wants to showcase pension reform as he urges voters in November to approve his proposed tax increases.

LAX expansion delays: They're running at least two months behind schedule on the Tom Bradley International project - and costs are $4 million over projections. Initial construction is now expected to be finished during the first part of 2013. From the Daily Breeze:

By then, airport officials hope to open seven new airline gates, first class lounges and upgrades to the federal inspection area, along with a new dining and retail area that will be known as the "Great Hall." After that, an older area of the Bradley terminal will be demolished as construction continues on the remaining airline gates through Dec. 24, 2013.

LAX workers protest: Demonstrations are expected at the departure areas over plans to take away health benefits. The protesters are employed by Aviation Safeguards, a contractor that supplies passenger-services workers at LAX. (Daily Breeze)

L.A. bankruptcies fall in 2011: Individual and business filings were down 4.3 percent; for all of the Central District, they were down 5.7 percent (OC Register)

New strategy for JC Penney: The struggling chain will cut thousands of jobs nationwide and implement an everyday pricing policy that eliminates traditional sales and clearance events. From the NY Post:

"Many employees were given an option . . . to either leave the company or be moved to a different shift," according to a source briefed on Penney's plans. However, some were forced to quit because they couldn't work the oddball shifts they were offered, the source added. Insiders said fears of further firings are rippling through the ranks -- from store associates to execs at the retailer's headquarters in Plano, Texas -- as Johnson beats the drum about transforming Penney's sleepy corporate culture.

Another Spanish language network: News Corp. and a Colombian television broadcaster are looking compete with Univision and Telemundo. From the WSJ:

Lining up distribution could present another challenge. Fox is seeking local TV stations, generally ones that already broadcast in Spanish, to carry MundoFox beginning in the fall and says it is in talks with several interested stations. At an industry conference in Miami this week, Fox and RCN plan to brief several dozen TV stations on the network's planned lineup of news, movies, sporting events and scripted and variety shows.

January 20, 2012

Dodger debt total: $573 million

Everybody will be paid off once the team is sold. The Chapter 11 reorganization plan is set for court approval on April 13. From the LAT:

The Dodgers say they intend to exit bankruptcy by April 30, the same day by which outgoing owner Frank McCourt has to satisfy two obligations: (1) close the sale of the team, under his agreement with Major League Baseball; (2) pay his ex-wife Jamie $131 million, under his divorce settlement. In addition to the $573 million in debt and $131-million divorce settlement, Frank McCourt's attorneys have said a sale could result in up to $200 million in taxes. That would put McCourt's total obligations at up to $904 million, not counting any income tax penalties or liability to [Bryan] Stow's family.

By the way, Chapter7.com has an interesting graphic on the history of sports franchises going bankrupt. Here's the roster:

--Seattle Pilots, 1970: The Seattle Pilots declared bankruptcy to counteract an injunction by the state of Washington that sought to prevent them from moving to Milwaukee and becoming the Brewers.

--Pittsburgh Penguins, 1975, 1998: In 1998, to keep their season going, many Penguins players deferred their salaries. Star Mario Lemeiux was owed so much that he became a partial owner.

--Cleveland Barons, 1978

--Baltimore Orioles, 1993

--Los Angeles Kings, 1995

--Ottawa Senators, 2003

--Buffalo Sabres, 2003: The Sabres declared bankruptcy shortly after their owner was convicted of fraud and sentenced to 15 years in prison.

--Phoenix Coyotes, 2009

--Texas Rangers, 2010

January 19, 2012

McCourts' divorce finalized

Frank and Jamie were on hand this morning to complete what's believed to be the most expensive divorce in California history ($20 million in legal bills). As part of the settlement, which had been agreed upon in October, Frank is required to pay his ex-wife $131 million by April 30. From the LAT's Bill Shaikin:

On Thursday morning, as Frank McCourt sat on the bench outside [Judge Scott] Gordon's courtroom and Jamie McCourt sat on another bench down the hall, attorneys shuttled from one McCourt to the other to review the document. Gordon then held a three-minute hearing in which both of the McCourts testified they had read the agreement, consulted with their attorneys about it, freely consented to it and wished to sign it. Gordon then ratified the agreement. "Thank you, folks," Gordon said. "Good luck to you."

January 18, 2012

David Beckham will return to the L.A. Galaxy

The deal is done, reports the LAT, and it will be announced on Thursday. No numbers yet, but the new contract is expected to allow Beckham to play for the English team in the London Olympics. Beckham turns 38 in May.

January 12, 2012

Dodger bidder Steven Cohen joins MOCA board

The hedge fund billionaire's L.A. state of mind. From press release:

Mr. Cohen is one of the world's leading collectors of modern and contemporary art. His collection, which ranges from impressionism to the 21st century, includes many works regularly on view in museum exhibitions in the United States and throughout the world.

The NY-based Cohen is among the many rich guys apparently going after the Dodgers. He's gone so far as to hire a sports architectural to look at possible Dodger Stadium renovations. Cohen has his main digs in Greenwich, Conn. (a 32,000 square foot mansion that has a hockey rink, basketball court, swimming pool, and two-hole golf course). Nothing in L.A., from what I can glean.

Thursday morning headlines

Stocks edge lower: Wall Street keeps lumbering along this week on tepid economic news and little movement in Europe. Dow is down about 30 points.

Jobless claims spike higher: Weekly filings jumped 24,000, to 399,000, largely because companies let so many workers go after the holiday season. That's typical in early January. (AP)

Retail sales inch up: December's increase was only 0.1 percent, though November was revised upward. (AP)

More money heading to Mexico: Remittances in 2011 are expected to increase 8 percent compared with a year earlier, thanks largely to an improving U.S. job market. From the LAT:

Remittances to Mexico soared in the early 2000s as immigrants found abundant work swinging hammers and hanging drywall during the U.S. housing boom. At the peak, 1 in 5 Latino immigrants in the U.S. was employed in the building trades, according to some estimates. But the housing bust and recession sent remittances tumbling after millions of jobs vanished. A crackdown on illegal immigrants has also take a toll. Tough new state laws aimed at undocumented residents in Alabama, Arizona and other states have forced some migrants to abandon their jobs. Others have changed their financial habits, holding on to cash in the event they're forced to relocate, experts said.

Wide divergence on foreclosures: Just 2.7 percent of all L.A. County homes filed at least one notice last year, according to RealtyTrac, but it was 5.4 percent in Stockton and 5.2 percent in Riverside. Nationally, it was 1.5 percent. (LAT)

Fox seeking minority stake in Dodgers: Broadcaster is reaching out to prospective bidders in an effort to secure TV rights. Separately, L.A. billionaire Alan Casden is the latest rich guy to enter the bidding. Casden had tried to buy the team in 2003.(LAT)

Apple stores come to Target: Actually, mini-stores - much as Apple has been doing at Best Buy. Target plans to test 25 of them this year. (NYT)

Report challenges Brown's budget numbers: The nonpartisan Legislative Analyst's Office says that the governor is counting on taxes from investments by the wealthy that might not materialize. From the Mercury News:

"What we're concerned about is that his capital gains assumption is a little bit optimistic," Taylor said at a news conference unveiling the LAO report. "We've looked historically, we've considered what's happening in housing, which is fairly stagnant, we've looked at projections of where we think the (stock) market will be, and we do get considerably lower numbers from capital gains."

American Apparel is cleared: The SEC has wrapped up an inquiry involving the L.A.-based retailer's finances without taking any enforcement action. (NY Post)

January 11, 2012

Why so many bidders for the Dodgers?

In case you haven't heard, billionaire Tom Barrack of Colony Capital is interested, reports the LAT. There's also Stan Gold paired with the Disney family, Rick Caruso paired with Joe Torre, Magic Johnson paired with a major investment firm, hedge fund billionaire Steven Cohen, former owner Peter O'Malley, and a bunch of others - including, perhaps, several parties who have chosen to remain in the shadows (this is a private bidding, after all). The sizable interest is quite a contrast to the last time the Dodgers were on the block in 2004 and Baseball Commissioner Bud Selig was stuck with Frank McCourt, who, as you'll recall, put up little or no money for the team. So why the change? There's no ready made answer, but among the possibilities:

--The Dodgers are a pricier property: Back in 2004, the franchise was valued at $399 million, according to Forbes; last year, the figure was $800 million, and after the sale it will almost certainly be north of $1 billion.

--Financials are better: Yes, there's all that McCourt-related debt, but the baseball business makes a bunch of money.

--TV rights: Big-market teams have been cleaning up in recent years, and the L.A. market is considered especially lucrative. That's why Fox and Time Warner Cable are likely to duke it out later this year.

--Money on the sidelines: Rich guys are sitting on buckets of cash these days, so why not take a chance on a pro team?

--Bud Selig's non-involvement: Total speculation on my part, but it's worth noting that as part of the deal cut with McCourt, the baseball commissioner will not oversee the auction process - and Selig has been known to manipulate franchise sales. With McCourt, the bidding is likely to be straight forward. In other words, the highest price wins.

Wednesday morning headlines

Stocks slip: After a strong start to the new year, perhaps it's time for a break. Dow is down 50 points.

Cost to continue redevelopment: Having the city foot the bill would run $109 million, which in this financial climate is a non-starter, according to the mayor and budget chief Miguel Santana. The Legislature eliminated California's redevelopment agencies last year. From the LAT:

Local officials around the state, who sued unsuccessfully to preserve their redevelopment agencies, are now trying to persuade the Legislature to allow cities to continue economic development and hold onto some of the money. But prospects in the Legislature are uncertain. Cities have the option of becoming successor agencies, and many across California have already embraced that role. But Santana said Los Angeles cannot risk having its general fund budget, which pays for basic services, take on its redevelopment employees, he said.

Fox settles with Dodgers: The team agrees to hold off on the sale of TV rights until its contract with Fox expires. And Fox agrees to drop its court case with owner Frank McCourt. (LAT)

Another L.A. billionaire going after Dodgers: Colony Capital's Tom Barrack is the latest potential bidder. Barrack has been looking at entertainment and sports properties. (LAT)

Raiders looking at L.A.?: Could be a negotiating ploy for getting a new stadium in the Bay Area, but team owner Mark Davis said there have been talks with L.A. stadium groups. (LAT)

Office market still a problem: Five-year leases signed at the height of the boom are coming due and tenants are looking for alternatives. From the WSJ:

Rents in most markets are still well below what they were in 2007, with the drop in some areas as much as 26%, according to data firm Reis Inc. Because of the weak market, landlords with empty space or expiring leases also have to spend large amounts on incentives to attract tenants, like free rent and interior work. Defaults and foreclosures are rising. The delinquency rate of office loans that were securitized hit 9% in December, up from 7.4% in June.

Higher prices for OJ: Orange juice futures spiked to an all-time high after the FDA announced a clampdown on imports. Small doses of a fungicide that's not approved in the U.S. have been found in Brazilian fruit. (Reuters)

New economist for LAEDC: Robert Kleinhenz replaces Nancy Sidhu, who retired last month. Sidhu had succeeded Jack Kyser at the Economic Development Corp. (LABJ)

Drop in magazine advertising: Publishers sold 3.1 percent fewer ad pages last year compared to 2010, though there was a big divergence in titles. Bloomberg Businessweek shot up 19 percent, while Forbes fell 3.9 percent, (NY Post)

January 10, 2012

Tuesday morning headlines

Stocks open higher: Alcoa had a weak fourth quarter, but its forecast for 2012 is pretty good. Plus, no bad news from Europe. Dow is up over 100 points.

Consumer credit back up: Is this where we came in? The increase in November was 10 percent, the biggest jump in a decade. From the WSJ:

Households have become more willing to take on debt after years of paring their borrowing, the Fed report suggested. For several months, borrowing for car loans and student loans has been on a modest upswing. The latest report showed households also are starting to add to their credit-card balances. Credit-card balances, which the Fed describes as "revolving" credit, increased to $798.3 billion in November, on a seasonally adjusted basis, rising at an 8.5% annual rate from the month before.

Gas prices keep climbing: An average gallon of regular in the L.A. area is $3.778, according to the government survey, up almost 8 cents from the previous week. It was the third straight week of increases.

Health spending slows down: Growth increased only 3.9 percent in 2010, in part because Americans delayed hospital care, doctor's visits and prescription drug purchases. From the NYT:

In 2010, the study said, hospitals reported a decline in admissions and slower growth in emergency room visits and outpatient visits. Likewise, it said, doctor's office visits declined, and spending for doctors' services grew just 1.8 percent, to $416 billion in 2010. Total health spending averaged $8,402 a person, up 3.1 percent from 2009, the report said.

Tiffany sales weaken: U.S. stores open at least a year were up just 2 percent in November and December compared with 2010, though the numbers were much better in Asia. Analysts have wondered whether the recent strong quarters were sustainable. (AP)

Big payday for Jobs' successor: Apple CEO Tim Cook made $378 million last year, much of it from restricted stock. Steve Jobs, you might recall, gave himself a salary of $1 (though his Apple stock was worth a fortune). (All Things Digital)

Fresh & Easy to close 12 stores: The fledgling grocery chain says that the locations, in California, Arizona and Nevada, have been under-performing (they might reopen if business improves). At the same time, there are plans to open at least two dozen markets on the West Coast. (OC Register)

New allegations against ex-Coliseum managers: An amended lawsuit now claims that large cash payments were improperly made to a union representative as wages for stadium stagehands. (LAT)

Houlihan hires dealmaker: Steven Tishman will handle global mergers and acquisitions for the L.A.-based investment bank. Houlihan has been a smaller player in the M&A sector. (WSJ)

January 9, 2012

NFL confirms tiff with Leiweke over proposed team ownership

City officials had been pooh-poohing reports in October about the league having little interest in bringing a team to L.A. under the plan laid out by Anschutz Entertainment Group. But the concerns are apparently true, according to a profile of Leiweke and Phil Anschutz in this week's New Yorker. Basically, AEG proposed the kind of relationship it has with the Lakers, Clippers and Kings. That is, it would sell sponsorships and premium seats, as well as operate parking and concessions, and a percentage of those revenues would then go to the team. But several owners objected to this idea because it upends the current NFL business model. And the league appears to agree.

In the league's view, the deal that Anschutz was proposing was doubly flawed: not only was he trying to get a share of a team at a discount but he wanted a landlord-tenant relationship that, in its control of revenues, amounted to a kind of asset-stripping. "It's unlikely the league or a team would approve this proposal," said [Eric Grubman, the N.F.L.'s executive vice-president of business ventures]. Six weeks earlier, Grubman continued, he had given Leiweke an outline of elements that he thought would persuade a team to sign with Anschutz. "Since they haven't quit, I have some optimism they're working toward it," Grubman said.

This process is not exactly transparent, so it's very hard to know how close - or far - AEG is to lining up a team. But this morning came word that the Chargers would stay put in San Diego through at least 2012. Perhaps another franchise owner will come forward, though a few weeks back Commissioner Roger Goodell splashed cold water on L.A. getting an NFL team next season, which is clearly what Leiweke had in mind. Aside from football, New Yorker writer Connie Bruck asked Leiweke about his interest in politics:

Last time, he said, he gave money to Barack Obama, but he believes that the President has engaged in class warfare. "Look, I personally came from nothing," he said. "Someone making me look like a bad guy because I'm making money now? I resent that. I'm really upset about the way he is positioning this now about protecting the rich. I was never rich in my life. I earned everything, built my life from the ground up, and never got one damn break in my life! I resent the fact that when my mom was sick, and my dad had to pay for her treatment, it took every dime from my dad and broke him as a human being and he was never the same. And then, after we have overcome that, now to make me look like I'm bad, I'm evil, I'm greedy, I don't give. Terrible!" He went on, "I hugely admire Phil for putting everything back in. This is a man that's never pulled anything out of this campus. Double down, triple down, quadruple down. And then people take shots at him because, they say, 'He's a billionaire.' He's the most humble man I know." When people attack Anschutz, he continued, "I take it personally, almost like I was his son."

Earlier: Report: NFL not happy with AEG's proposal for football

Monday morning headlines

Mixed market: Earnings season begins today, but otherwise pretty quiet. Dow is down about 5 points.

Wall Street gets pay cut: Compensation for bank executives is expected to be the lowest since 2008, largely because of lower trading revenue, fewer deals, and weak stock prices. From the WSJ:

At Goldman Sachs Group Inc., many of the roughly 400 partners can expect to see their 2011 pay cut at least in half from 2010, according to people familiar with the situation. Pay for some employees in the New York company's fixed-income trading business will shrink by 60%, with some workers getting no bonus, these people said. Morgan Stanley is expected to shrink bonuses for some investment bankers and traders by 30% to 40% from 2010, said people familiar with the matter.

Lions Gate, Summit inching towards deal: The producer of "Man Men" would acquire the "Twilight" studio for around $400 million, though an agreement hasn't been reached and other suitors are standing by. From Variety:

Lionsgate and Summit have had discussions about a union going back as far as fall 2008, just before the bow of the first "Twilight" pic. The merged entity would have more firepower in a market where the majors have scaled back on mid-budget films in favor of tentpoles and franchises -- creating an opportunity for sizable indies to fill that gap.

Windfall for L.A. County retirees: More than $48 million is being paid out to departing employees for unused time off in 2010 - and 64 received checks in excess of $100,000. From the LAT:

Gov. Jerry Brown maintained the state's 80-day cap on vacation in all but one of six union contracts he renegotiated after taking office in January. The exception was the deal for the powerful prison guards union, whose members spent nearly $2 million on his election campaign. They can now accrue unlimited vacation. Even with the cap in place, however, managers at state agencies have granted so many exceptions that the limit holds little meaning. Last year, nearly a third of retiring state employees got paid for more than 80 days, data from the state controller show.

Disney family to bid for Dodgers?: They'll be working with investor Stanley Gold, the LAT is reporting, citing sources. Gold is said to be talking to potential investors.

Disney marketing head is out: Well, almost - the Mouse House is seeking a replacement for MT Carney, who was hired just six months ago and had no movie experience. (NYT)

Academy head under fire: Dawn Hudson has been ruffling feathers in efforts to make over the 84-year-old institution, and there's some talk among a minority of the Academy's leadership about replacing her. From the LAT:

Those frustrated with Hudson's leadership say she has not done enough to get to know the intricacies of the academy, including its 250 employees, and has made decisions without consulting others, including the board. In addition, some members and staff have been upset by her moves to bring in well-paid management consultants and headhunters, public relations specialists and speech writers while docking long-term employees' overtime pay; her removal of long-term committee members from their posts; and her proposal to hire superstar architect Thom Mayne to refurbish the fourth-floor offices of the academy's headquarters on Wilshire Boulevard.

Tech show losing luster: The Consumer Electronics Show is still very big (140,000 people are expected to attend the Vegas shindig), but many companies are choosing to keep a low profile. From the NYT:

This reflects the changing nature of the technology industry -- particularly the fact that the most important developments in the electronics business are no longer coming from the makers of television sets and stereos that have been most closely identified with the show since it started in 1967. And as the industry and its trade show have grown, the need for buzz and branding has become more acute. The most innovative players -- like Apple and Amazon -- need to stand out from the crowd and so have chosen to introduce their products at smaller, more narrowly defined conferences and company-only events.

L.A. hotel rates on the rise: They're expected to increase nearly 2 percent in 2012, according to TravelClick. In SF, rates could be up 11 percent. (LAT)

Another big drop in L.A. bankruptcies: Individual and business filings were down 15.5 percent in November compared with a year earlier. Bankruptcies had reached historic highs because of the recession and the housing crash. (OC Register)

January 4, 2012

Joe Torre quits MLB job to join Rick Caruso's bid for Dodgers

Boy, this is getting fun. The former Dodgers manager, who held an executive position with Major League Baseball for the past year or so, did not indicate what his role would be in the Dodger organization if the L.A. developer winds up outbidding the others. From Torre's statement:

"I have great confidence in Rick Caruso's unique qualifications and his ability to lead a successful bid for the Los Angeles Dodgers. In Rick I found a partner who understands consumers and fully appreciates that the Dodgers are a treasured L.A. institution. Since moving to Los Angeles, I have seen firsthand Rick's dedication to business and people in Los Angeles. I am very excited about this new opportunity."

[CUT]

Rick Caruso said, "The Dodgers are an iconic Los Angeles franchise, and I am thrilled to partner with Joe Torre, one of baseball's all-time greats, to launch a bid for this storied organization. Joe has a proven track record of fielding winning teams and I am looking forward to our group benefiting from his unique experience. I am a lifelong Angeleno; I love this city and have dedicated my career to creating world-class destinations that support this community and foster great customer experiences. Joe and I believe in the Dodgers and Dodger fans and know that together we will foster a winning culture and deliver a premier, fan-focused baseball experience at Dodger Stadium."

Torre's decision to join Caruso will provide a bit more luster to a bid that has been overshadowed recently by competing efforts from Magic Johnson (and partners) and hedge fund billionaire Steve Cohen. Keep in mind that current owner Frank McCourt is mostly interested in who offers the best price.

January 3, 2012

Tuesday morning headlines

Stocks taking off: First session of the new year gets off to a fast start, with the Dow up more than 200 points.

Positive economic report: A monthly index measuring manufacturing activity beat expectations in December, indicating an improved economic picture. (Calculated Risk)

Villaraigosa defers payments: The mayor, working with the City Council, have delayed paying for police overtime, unused sick time, and an early retirement program, the LAT is reporting.

The next mayor, and possibly the one after that, will inherit the tab. And, as a result of another mayoral initiative, there could be less City Hall cash at that point to pay the bills, because Villaraigosa also wants to eliminate a business tax that generates $439 million annually. Villaraigosa has portrayed his budget decisions as prudent, preserving crucial services in the midst of a major fiscal crisis. Matt Szabo, Villaraigosa's deputy chief of staff and in-house budget advisor, told The Times that his boss fully intends to "hand to his successors a city in the black." But even some of Villaraigosa's allies are questioning whether the public has been misled about the health of the city's finances.

Consumers still cautious: They're selectively spending, but nowhere near the levels needed to get the economy back in gear. From the NYT:

The reasons for the sluggishness are clear: incomes are essentially flat, job growth is modest, and more than 40 percent of the new jobs in the last two years have been in low-paying sectors like retail and hospitality. While consumer spending is not "going to collapse," said Joel Prakken, senior managing director at Macroeconomic Advisers, "there are some headwinds there."

B of A cutting off small biz credit: Customers are being told to pay off their balances all at once instead of making monthly payments - an effort by the bank to raise capital and reduce risk. From the LAT:

Business owners complain that BofA's credit squeeze is abrupt and could strain their small companies and even put them out of business. The credit cutoff is coming at a time when the California economy can't seem to catch a break, and bucks what the financial industry says is a new trend of easing standards on business loans.

Final box office tally for 2011: Rough year for Hollywood: Ticket sales fell 3 percent from 2010, to $10.2 billion, and attendance fell 4 percent. (LAT)

Super Bowl sold out: Advertisers have snapped up all available slots, with each 30-second commercial going for a record $3.5 million. Car companies will be the biggest spenders. (USA Today)

December 29, 2011

Business Update on KPCC: Looking ahead to 2012

Unemployment, budget deficits, the elections, pro football, a new Dodgers owner - 2012 will not be dull, that's for sure. I lay out some of the possibilities with KPCC's Steve Julian. Available at kpcc.org and podcast (Business Update with Mark Lacter). Transcript is after jump

Continue reading "Business Update on KPCC: Looking ahead to 2012" »

December 28, 2011

L.A. is OK but not great when it comes to sports championships

sports.jpg The Atlantic's Richard Florida and a couple of his colleagues assembled a list of cities that have pro titles. As you might guess, NY is comfortably on top with 59 championships, followed by Chicago at 29, Boston and Montreal at 24 each, L.A. with 23 and Detroit with 22. The standout city, however, is tiny Green Bay, which has 13 titles. That's more than Washington, D.C., Philadelphia, Miami, Dallas, Minneapolis and Phoenix.

Green Bay's exceptional nature becomes even clearer when we gauge its "championship location quotient." We base this on a modified location quotient which allows us to compare a metro's relative share of the major league home population with its relative share of championships. A ratio of 1.0 means a metro's share is exactly in line with the pattern for all major league cities. It's worth pointing out that our championship location quotient measure will be more skewed than a traditional location quotient since it considers only 47 of some 350 plus metro areas. Still, Green Bay's CLQ is a staggering 22, meaning the metro has won 22 times the number of championships that its size would predict - and not just in football, but across all four professional sports (never mind the fact that Green Bay only has football). The next highest CLQ is Boston's 3; Montreal's is 2.75 and Pittsburgh's 2.65. Detroit (2.1) and Edmonton (2.0) are the only other metros with a CLQ of more than 2. Greater New York's is 1.34, Chicago's 1.28, and LA's .75, while other larger metros like Dallas (.46), greater Washington DC (.45), Miami (.37) and Houston (.28) have even lower CLQs.

Interesting, but there are a few factors worth considering. NY has had many more sports franchises than any other city, and one of them, the Yankees, has won more World Series titles than any team in baseball. Sunbelt cities don't have many championships because their franchises are relatively new (notice a heavy skew towards cities in the northeast and Midwest that have the oldest teams). And of course L.A. has been without pro football for 15+ years.

Billionaire Steven Cohen making big plans for Dodger bid

The East Coast-based hedge fund manager has hired the sports architecture firm Populous to look at possible renovations for Dodger Stadium, the LAT is reporting. Also being enlisted is super-agent Arn Tellem, who could wind up running the team if Cohen becomes the new owner, the Times says, citing sources. He emerged as a serious bidder several weeks ago.

Cohen also has met with several owners, although the focus of the discussions was less on securing the approval vote of those owners and more on the challenges of operating a professional sports team, according to people involved in the meetings. A participant in one of those meetings said he left with the impression that Tellem would run the Dodgers if Cohen won the bidding. Tellem would consider an executive position with the Dodgers but has not committed to taking one, according to a person who has spoken with him.

Don't forget a group being led by Magic Johnson that has also expressed an interest in owning the team. And there are several others.

Earlier: Hedge fund gazzilionaire prepares bid for Dodgers

December 22, 2011

Matt Barkley is coming back to USC

He's holding off on the NFL for another year. Says he's ready for the pros, but wants to get his degree and lead what should be a strong team next year.

December 21, 2011

Tiger's flunkies putting the squeeze on sports writer

Well, trying to at least. In his new book ("One on One: Behind the Scenes with the Greatest In the Game"), John Feinstein devotes an entire chapter to his acrimonious dealing with Woods and his people. Of particular note is the time that they were looking for the sources used in a not-so-flattering piece Feinstein wrote back in the 1990s. From the Golf Digest excerpt:

After I had written a column in Golf Magazine about Tiger blowing off the Buick Challenge and the college dinner and about the scene at Disney, George Peper, the editor of the magazine at the time, had gotten a call from Hughes Norton demanding a meeting with me. I had no problem meeting with Norton and his deputy, a guy named Clarke Jones.

And so Peper, Mike Purkey (who was my editor at the magazine) and I met with Norton and Jones over breakfast at the Masters. There were two highlights to what turned out to be a short meeting. The first was when Jones, apparently the designated bad cop, demanded to know who my sources were on several things I had written. I looked at him and said, "Clarke, if I wanted you to know that, I'd have used their names in the magazine."

"Well, I want to know, right now!"

"Can't have everything you want in life, Clarke."

Norton, the designated good cop, jumped in to say that he really didn't want to see Tiger's anger at me result in him deciding not to sign a contract with Golf as a "playing editor." At that moment Golf and Golf Digest were trying to get Tiger under contract. In fact, Golf had no chance because Golf Digest had a bigger circulation and it had Pete McDaniel--who would write one of Earl Woods' books. But Norton was using Golf to up the ante in his negotiations with Golf Digest.

I knew from talking to Peper that he was holding out hope that his magazine could somehow get Tiger, and I also knew it would be a big deal for Golf.

As soon as Norton started into his "I'd hate to see Tiger being upset with John affect our negotiations with Golf" speech, I stood up.

"Is that what this meeting is about?" I said. "So you can blackmail George?"

I turned to Peper. "Listen, if you need to fire me to get this deal done with Tiger, go ahead. My guess is Digest will hire me tomorrow. So, it's fine, although I don't think for a second they're going to sign with you. In fact, I'll bet the deal's already done. But you do what you have to do.

"Meanwhile, I have things to do. If you want to stay and eat with these two a--holes, go ahead. But I have better things to do than listen to this crap."

I stalked out. In June, Golf Digest announced it had signed a deal to make Tiger Woods a playing editor.

Woods eventually has a one-on-one meeting with Feinstein that goes reasonably well, but does little to remove the Tiger cloak. One of the interesting takeaways is that Woods comes off as a very smart guy and he tends to make his own decisions - not his team of advisers.

Wednesday morning headlines

Falling stocks: After yesterday's big gains, investors might be looking for some quick profit-taking. Dow is down about 70 points.

Standoff on payroll tax cut: House Republicans are digging in after voting to effectively block an extension of the tax cut, along with jobless benefits. From the NYT:

By turning down a bill that was overwhelmingly supported by both parties in the Senate as well as the White House, the conservative House majority that has spent the year inciting combative legislative showdowns is now staring over the brink, standing fast against legislation with significant financial consequences for nearly every American household. Over just a few hours on Tuesday, President Obama held an impromptu news conference to sharply criticize them, the House floor exploded with partisan derision and many members then headed for the airports, not knowing how or if the legislative battle would end.

Losing jobless pay: The impasse in Congress has left more than 3 million out-of-work Americans in a pickle because their unemployment benefits could be cut off. From the NYT:

The cornerstone of the program, regular unemployment insurance benefits, provides up to 26 weeks of assistance financed by the states. In states with high unemployment, jobless workers may be able to get up to 73 weeks of additional benefits, financed by the federal government, for a total of 99 weeks of aid. House Republicans would reduce the maximum to 59 weeks.

California leads in job growth: The state had 233,000 more workers on payrolls in November than for the same time a year earlier. Texas was second in growth. (OC Register)

Mixed results at KB Home: The L.A.-based homebuilder reported a 20 percent drop in fourth-quarter net income, but revenue was up because of more home deliveries and a higher average selling price. (AP)

Housing bust even worse than first thought: U.S. home sales from 2007 through 2010 were revised downward by a whopping 14 percent, according to the National Association of Realtors. The new numbers show that 2008 was the worst year. (Real Time Economics)

B of A nears Countrywide settlement: This involves a Justice Department probe into whether the mortgage giant violated fair-lending practices. The deal will include compensation to Countrywide customers. (Bloomberg)

Wendy's inches to #2: Looks like Burger King will slip to third in the burger wars - despite having more stores than Wendy's. From the WSJ:

Wendy's fortunes have been revived since investor Nelson Peltz's Triarc Cos. bought the chain in 2008. Much the way McDonald's has broadened its menu and remodeled its restaurants, Wendy's has upgraded its menu, changing the lettuce in its salads and softening the edges of its trademark square burgers. It has also raised some prices. The changes come amid intensified competition for market share in the fast-food industry, as room for restaurant growth has dwindled and the wobbly U.S. economy has prompted many to eat at home instead.

Laker-Clipper game sets record: The Monday night exhibition drew 509,000 viewers on NBA-TV, the most-watched preseason game in the channel's history. (AP)

December 20, 2011

Tuesday morning headlines

Stocks taking off: Maybe the Santa Claus rally is finally here. The Dow is up about 240 points and has topped the 12,000 mark.

House to vote down payroll tax cut: Republicans say they don't want to extend the tax break for only two months, which is what Senate Democrats voted for over the weekend. But their real gripe is how the extension will be funded. From the NYT:

Rather than have a straight up-or-down vote, the House will implement a procedural maneuver in which they will "reject" the Senate bill while requesting to go to conference with members of that chamber in a single measure, protecting House members from having to actually vote against extending a payroll tax cut. During the conference meeting among Republican members, some members expressed concern about effectively voting for a tax increase on the eve of an election year, said some who attended.

AT&T gives up T-Mobile bid: Just too many regulatory hurdles. But that leaves both companies (T-Mobile is Deutsche Telekom's U.S. wireless unit) looking for alternatives. From Reuters:

AT&T will have to find another way to address its shortage of wireless airwaves while Deutsche Telekom has to go back to the drawing board on what to do with T-Mobile USA, the struggling U.S. business it had desperately wanted to shed. The failure of the deal, which was seen as a tough sell from the very start, may call AT&T Chief Executive Randall Stephenson's judgment into question as he was clearly surprised by the strength of regulatory opposition.

Another drop in gas prices: Cheaper, but far from cheap. An average gallon of regular in the L.A. area is $3.597, according to the government survey, down about a nickel from last week.

Holiday shopping picks up: After a lengthy post-Black Friday slump, the malls were busier last week. Still, lots of procrastinators out there as the chain stores prepare for one last promotional blitz. (AP)

Calculating Dodger debt: Figure around $700 million that's tied to the team and related assets, according to a sports banker who has seen the sale book. From Forbes:

The banker said the sale book is "a piece of crap," because of some information typically given in such matters was missing, such as net income. However, after applying conservative estimates on interest rates to McCourt's debt the banker said the team almost certainly lost more than $20 million. Information about the financial state of the Los Angeles Dodgers continues to leak out because several people have their hands on the MLB team's sale book. The sale book contains selected financial data released by the team's investment banker, Blackstone, meant to provide prospective buyers with the information they need to determine if they want to bid for the Dodgers and if so, how much.

Hollywood sees skyscrapers?: New zoning guidelines being recommended by the Planning Department would give developers an easier time. From the LAT:

It's part of a grand vision of concentrating development around transit hubs -- a doctrine Mayor Antonio Villaraigosa likes to call "elegant density." The principle can be seen in the pricey downtown condos built over the last decade, and can be expected to be repeated in the future at current and future transit-rich communities like Woodland Hills and the Crenshaw district, officials say.

Amgen to develop generics: The Thousand Oaks biotech company announces a deal with Watson Pharmaceuticals to sell lower-priced copycat versions of several cancer drugs. From the NYT:

Amgen and some other biotechnology companies have long tried to impede the development of generic competition to their drugs, which can cost tens of thousands of dollars a year a patient. They have argued that biologic drugs, which are made in living cells, cannot be precisely copied, unlike drugs made in chemical factories. But now that pressure to lower health care costs has made such generic competition unavoidable, some of the biotech companies are starting to view it as a natural extension of their business -- as long as the cheaper versions they produce are of other companies' drugs, not their own.

December 16, 2011

Friday morning headlines

Late-year rally?: Low inflation numbers provide encouraging economic news. Dow is up about 50 points.

L.A. inflation takes a dip: November prices actually fell 0.1 percent from the previous month, but were up 3 percent over the last 12 months - largely due to higher gas and food costs. Nationwide, the Consumer Price Index was unchanged in November but rose 3.4 percent in the last year. (OC Register)

Gas prices keep falling: Average gallon of regular in the L.A. area is $3.583, about a nickel lower than last week and a quarter lower than last month, according to the Auto Club. But prices remain higher than normal for this time of year.

SEC sues for former Fannie, Freddie executives: The government accuses them of misleading taxpayers about risky subprime mortgages that the two entities held during the housing bust. From AP:

Those charged include the agencies' two former CEOs, Fannie's Daniel Mudd and Freddie's Richard Syron. They are the highest-profile individuals to be charged in connection with the 2008 financial crisis. Mudd and Syron led the mortgage giants when the housing bubble burst in late 2006 and 2007. The four other top executives also worked for the companies during that time.

Mixed picture at ports. Outbound container traffic at the Port of Los Angeles was up 15 percent in November compared with a year earlier, and inbound traffic was 6.2 percent. But the Port of Long Beach, which lost a terminal operator to L.A., had another weak month.

Zynga begins trading: The SF-based online game developer priced its initial public offering at $10 per share, raising $1 billion. That's the largest Internet-related IPO since Google went public seven years ago. From AP:

With its huge player base and a few loyal spenders, Zynga earned a net income of $90.6 million in 2010, an unusual pre-IPO money maker in the sector. Cowen & Co. analyst Doug Creutz, however, initiated coverage Friday with a "Neutral" rating on the stock. While Zynga is the leader in Facebook gaming, he's concerned that it won't be able to grow fast enough to justify its stock price. Growth in Facebook gaming has slowed, and Zynga's market share has declined from 50 percent to 38 percent of daily active users, he wrote.

Government shutdown averted: Congressional leaders somehow agreed to a spending plan that will keep things running for the next nine months. But they still haven't reached a deal on extending a payroll tax holiday, which expires in another couple of weeks. (NYT)

TV's sports tax:Subscribers pay, on average, $100 a year for sports programming, even if they care little or nothing about sports. From the NYT:

A sizable portion goes to the National Football League, which dominates sports on television and which struck an extraordinary deal this week with the major networks -- $27 billion over nine years -- that most likely means the average cable bill will rise again soon. Those spiraling costs are fraying the formerly tight bonds between the creators and distributors of television. Cable channels like ESPN that carry games are charging cable and satellite operators more money, and broadcast networks are now doing the same, demanding cash for their broadcast signals and using sports as leverage.

Amgen CEO to retire: Kevin Sharer has headed the Thousand Oaks-based biotech company for 11 years. Also retiring is the company's longtime research head, Roger Perlmutter. New CEO is Robert Bradway, who currently is COO. (LABJ)

Downsizing Ontario airport?: With passenger traffic plummeting, officials might shut down one of the two terminals. From the LAT:

A pillar of pride for the Inland Empire, the sprawling facility -- owned and operated by the city of Los Angeles -- lost a third of its 7.2 million passengers during the economic downturn between 2007 and 2010. The airport is on track to have as many passengers this year as it saw in 1987. Nationally, only Cincinnati is shedding travelers at a faster pace.

December 15, 2011

Slow go on arena efforts in Sacramento

Remember all the urgency among Sacramento city officials to keep the Kings from moving to Anaheim? Well, urgency has transitioned to lethargy. There's no financing in place for a new arena, and the NBA has set a March 1 relocation deadline. From the OC Register:

The Sacramento City Council on Tuesday night voted 7-2 in favor of exploring the concept of privatizing city-owned parking to raise money for the arena project. A city-commissioned report estimates that privatizing (or monetizing) parking in a 50-year lease with a private operator could bring in from $170 million to $245 million, thereby providing the lion's share of financing for the proposed $406 million arena. But that, too, is a slow process that could take months to finalize. And yet the Sacramento Bee reports that city officials want to finalize "a financing term sheet -- detailing the various public and private contributions toward the (arena) project - by mid-February." Want to? "Have to" is a more accurate statement considering the March 1 deadline.

NBA commissioner David Stern will meet Friday with Sacramento mayor Kevin Johnson and AEG honcho Tim Leiweke, who has shown an interest in operating a new arena. Register columnist Randy Youngman wonders whether AEG's interest has anything to do preventing the Kings from moving to Anaheim.

[AEG] owns Staples Center as well as a percentage of the Lakers. The Lakers' new TV contract with Time Warner Cable (reportedly $5 billion over 25 years beginning in 2012-13) also has a provision that reduces its value 10 percent annually if a third NBA team is in the market.

Thursday morning headlines

Stocks gain ground: It's all about Europe these days, and today the news is pretty good. Dow is up over 100 points.

Jobless claims hit 3-year low: Weekly filings fell 19,000 to 366,000 - a level low enough to propel significant job growth. (Bloomberg)

Foreclosure filings on upswing: The state saw a 15 percent increase in November compared with the previous month and an 11 percent increase from a year earlier. California cities accounted for nine of the 10 areas with the highest foreclosure rates. (LAT)

FedEx beats estimates: The overnight shipping company, often considered an economic bellwether, beat estimates with a 76 percent jump in quarterly earnings. From AP:

The performance of the company's FedEx Home Delivery and FedEx SmartPost services were especially strong, said CEO and Chairman Fred Smith. "With the healthy growth in online shopping this holiday season, demand is increasing for these residential delivery services," said Smith.

NFL's Goodell rules out L.A. team next year: He tells AP that the league won't be making a decision on a stadium in time for the 2012 season. From the Daily News:

Last week, AEG officials told a city panel that it hoped to secure City Council approvals for its $1.4 billion Farmers Field stadium by summer of 2012. The current agreement with the city, approved earlier this year, states construction on the project cannot begin until an NFL team has signed a long-term lease to play in Los Angeles. Additionally, the company is planning to release an environmental impact report for its downtown stadium by January 2012.

NFL network deal brings changes: NBC, CBS and Fox are getting a little extra sugar for their increased payouts to the league. Deal runs through 2022. From USA Today:

Next year, NBC takes the Thanksgiving prime-time game from NFL Network, which could add more Thursday night games. In 2014, NBC gets one divisional playoff game annually and gives up one wild-card game. That wild-card game could go to ESPN, which recently extended its NFL rights through 2021 as it pays about $1.8 billion annually.

Lakers not happy about Paul trade: No official comment, but team officials are said to be fuming over the deal that sends the All-Star to the Clippers. The Lakers were set to deal for Paul, but the NBA nixed the trade. (LAT)

Golden Globe nominations announced: "Hugo," "War Horse," "The Ides of March," "The Descendants," "The Help," and "Moneyball" are up for best drama. Among comedy or musical, it's "The Artist," "Midnight in Paris," "Bridesmaids," "My Week With Marilyn" and "50/50." (LAT)

Paramount chairman extends contract: Brad Grey has agreed to stay at the Viacom-owned studio through 2017. (LAT)

December 14, 2011

Report: Chris Paul could be coming to Clippers after all

ESPN reports on an agreement in principle that would send guard Eric Gordon, center Chris Kaman, forward Al-Farouq Aminu and Minnesota's unprotected 2012 first-round pick to the New Orleans Hornets. The league is expected to sign off on the deal tonight, reports ESPN, citing sources.

Wednesday morning headlines

Stocks head lower: The usual worries about Europe, being fueled by a drop in the euro. Dow is down 120 points.

Economy shows moderate growth: It's still a gradual recovery, according to a Reuters poll of economists, but there's little risk of a recession in 2012.

Economists in the Reuters poll sharply raised their forecasts for U.S. fourth-quarter gross domestic product to an annualized rate of 2.9 percent, up from expectations of 2.3 percent seen in a similar Reuters poll last month. Growth of 2.9 percent would be the fastest of any quarter in 2011 after Japan's earthquake and tsunami hit supply chains for manufacturers and a spike in oil prices in the early part of the year hurt growth.

L.A. Unified to sue state: California's largest school system wants to block the cutting of $248 million in school bus funding. Superintendent John Deasy said that his district is under a 1981 court order to run buses for 35,000 students as part of a desegregation case. The district must also provide transportation for 13,000 students with disabilities under state and federal laws. (Capitol Alert)

UCLA squabbling with Blue Cross: At issue are reimbursement rates for treatment at the Ronald Reagan UCLA Medical Center and Santa Monica-UCLA Medical Center. From the LAT:

Blue Shield says the rates for care at the hospitals have nearly doubled in the last five years, and the costs for inpatient treatments are already 41% higher than what it pays on average in Southern California hospitals overall. "Every dollar they asked for comes from our customers, and they certainly aren't in any mood to be paying large increases," said Paul Markovich, Blue Shield's chief operating officer. UC officials say they have negotiated in good faith and hope to reach an agreement before the contract expires Dec. 31.

Fox Sports appeals Dodger ruling: A bankruptcy judge determined that television rights can be sold along with the team. The Dodgers' contract with Fox prohibits the team from negotiating with other media outlets before late next year. (LAT)

Liz Taylor's jewelry sells for $115 million: Many of the 80 lots sold went for more than 10 times the catalog estimates. From the NYT:

The famous pear-shaped "La Peregrina" pearl, with its ruby, diamond and pearl necklace by Cartier, sold for $11.8 million, a world record for a pearl jewel. Richard Burton purchased the pearl for Taylor in 1969 for $37,000. The "Elizabeth Taylor Diamond" ring, also a Burton-given bauble, fetched $8.8 million for its 33 carats, more than twice the high estimate of $3.5 million. It set a new price-per-carat record for a diamond.

William Morris building is sold: Real estate investor CIM is buying the three-story Bev Hills property for $47.8 million. William Morris had unloaded the offices in 2008. (THR)

LAX is top social airport: FWIW: Facebook says that more people share that they are at LAX than any other airport in the world. Atlanta was in the No. 2 spot. (LAT)

December 12, 2011

Clippers trade for Chris Paul appears dead

Once again, the NBA seems to be blocking a deal that would send the New Orleans point guard to L.A. The league, which took over the Hornets franchise, apparently wants more for Paul, and the Clippers aren't willing. From Yahoo Sports:

Sources didn't preclude the talks from re-starting, but the Clippers weren't willing to meet the NBA's and Hornets' demands for Paul, sources said. The NBA has been been running the trade talks for Paul, usurping the power of general manager Dell Demps. The league took over the Hornets in December, and are angling to maintain value to sell the franchise for the highest possible price. This circumstance is unprecedented in NBA history.

Monday morning headlines

Stocks reverse course: New worries from Europe and Intel cuts forecast. Dow is down about 180 points.

Shoppers propping up the economy?: The concern among some economists is whether the spending will continue after the holidays. From the WSJ:

The savings rate, which rose sharply in the wake of the recession, has fallen in the past year, according to the Commerce Department, hitting 3.5% in October, down from 5.3% a year earlier. Revolving credit--which means mostly credit cards--has been trending up. "It's unsustainable," said Bernard Baumohl, chief economist of Economic Outlook Group. "At some point when the bills come due, I expect that we will see a very sharp retrenchment in consumer spending, and that could put the recovery in jeopardy again."

Occupy movement targets Port of Long Beach: Several hundred protesters are marching to a dock facility owned by SSA Marine, a shipping company that's partially owned by Goldman Sachs. It's not clear whether the group will try to disrupt operations, but the Long Beach police are standing by. (AP)

Are Clippers close to Chris Paul deal?: This one would send the All-Star point guard to L.A.'s other NBA team, the LAT is reporting. The Hornets would get center Chris Kaman, backup second-year guard Eric Bledsoe, second-year forward Al-Farouq Aminu, and the No. 1 draft pick they obtained from the Minnesota Timberwolves. From the Times:

Clippers owner Donald Sterling and the NBA have to sign off on the deal. A package from the Lakers for Paul was turned down by the league. The NBA will probably review the Clippers deal Monday. What may actually help the Clippers get the deal done are the young players involved and a potential top-flight draft pick.

Bad notices for Kindle Fire: Amazon's heavily promoted tablet is being picked apart by customers and reviewers. Updates are already in the works, From the NYT:

A few of their many complaints: there is no external volume control. The off switch is easy to hit by accident. Web pages take a long time to load. There is no privacy on the device; a spouse or child who picks it up will instantly know everything you have been doing. The touch screen is frequently hesitant and sometimes downright balky.

Madoff regrets guilty plea: The convicted scamster tells the NYT's Diana Henriques that he had confessed in order to spare his family, but now wishes that a trial had taken place. "If I had known that things would turn out the way they did, with all the harassment of my family anyway, I would have spent the money and gone to trial," Madoff said.

Activision's "Call of Duty" hits $1 billion in sales: The latest version of the popular shooter game took just 16 days to reach the $1 billion mark - less time than for the blockbuster movie, "Avatar." (All Things Digital)

Worst BO weekend in three years: "New Year's Eve" wound up in the top spot with only $13.7 million. Overall revenues were $78 million, the lowest number since September 2008. (THR)

LA Fitness takes over 171 Bally locations: That includes about 40 in Southern California. The $153-million purchase gives the privately held Irvine-based company more than 500 locations nationwide. (LAT)

December 9, 2011

One more vote against NBA decision to kill Chris Paul deal

This one from y Matthew Yglesias:

The owners don't seem to realize that the more they act as a cartel to squeeze players' monetary compensation the stronger the hand of teams in the desirable locations becomes because non-salary compensation (including both endorsements and non-monetary benefits of playing with your friends or winning championships) starts looming larger in the equation. The owners also seem to be in denial about the reality that the marginal value of a win is higher in teams with large (and/or rich) fanbases, so a flat distribution of talent is economically inefficient. Trying to redistribute talent, rather than profits, ends up reducing profits.

The league, and NBA Commissioner David Stern in particular, are getting reamed today for the decision to nix the blockbuster trade that would have sent Chris Paul to the Lakers.

Friday morning headlines

Stocks taking off: Guess Wall Street has decided to look at the positive parts of the euro zone's latest plan to stem the debt crisis. Dow is up 160 points.

About that deal: European leaders agreed to enforce stricter fiscal and financial discipline in their future budgets. Britain and several other nations did not go along. From the NYT:

Though not a perfect solution, because it could be seen as institutionalizing a two-speed Europe, the intergovernmental pact could be ratified much more quickly by parliaments than a full treaty amendment. Crucially, the deal was welcomed immediately by the new head of the European Central Bank, Mario Draghi. "It is a very good outcome for euro area members and it's going to be the basis for a good fiscal compact and more disciplined economic policy in euro area countries," Mr. Draghi said early Friday morning. The support of Mr. Draghi and the bank to continue to buy the bonds of troubled large countries like Italy and Spain is crucial to buy time for their economic adjustment and restructuring, to reduce their debt and avoid a collapse of the euro.

Toyota slashes profit outlook: The sharply downgraded forecast is being blamed on a strong yen and the massive flooding in Thailand. The Japanese automaker is on track to lose its title as the world's largest automaker. From AP:

It's been a rough year for Japanese car makers, who were first hit with the earthquake and tsunami in March. They had largely rebounded from the disaster when they confronted the immense flooding in Thailand this autumn. Car production as far away as North America was scaled back as the creeping floodwaters put suppliers out of action. The flooding, which was Thailand's worst in half a century, will result in an output loss of 230,000 vehicles, said Executive Vice President Satoshi Ozawa at a news conference in Tokyo.

Gas prices fall for fifth straight week: An average gallon of regular in the L.A. area is $3.627, a drop of six cents from last week, according to the Auto Club.

Consumer sentiment edges higher: The Reuters/University of Michigan index increased in early December to 67.7, up from the November reading of 64.1. But that's still low - in flush years it's well over 100. (Calculated Risk)

Howard Buffett to succeed his father: But the younger Buffett, to be profiled this Sunday on "60 Minutes," says that his dad won't be stepping down as head of Berkshire Hathaway "until he's buried in the ground." From the Deal Journal:

Also in the "60 Minutes" piece, Warren Buffett repeats his assertion that Howard, a farmer and a Berkshire board member, will serve as a guardian of the company's culture. "You worry that somebody will be in charge of Berkshire that uses it as their own sandbox in some way," Warren Buffett tells Leslie Stahl, according to advance excerpts provided by the show. "The odds of that happening are very, very, very low, but having Howard there adds just one extra layer of protection."

Dodgers can sell TV rights: It's a big loss for Fox Sports, which had been trying to hold off other suitors for another year. But a bankruptcy judge ruled that the team can move up that date. From the LAT:

The ruling could send Fox Sports scrambling on two fronts -- to appeal in the hope of stopping the sale, and to negotiate in the hope of reaching a new deal in the next five weeks. However, the Dodgers would have the right to talk with other potential broadcast partners thereafter, with Time Warner Cable, DirecTV, AT&T and Verizon among the possibilities.

Interim housing official resigns: Ken Simmons is the guy who replaced Rudolf Montiel as head of the scandal-ridden L.A. housing authority. He's stepping down at the request of the mayor, who has taken some heat for being out of the loop in the decision to pay Montiel an exit package of $1.2 million. (LAT)

Chaos in the aftermath of NBA nixing Chris Paul deal

ESPN is reporting that the three teams involved in the blockbuster trade - the Lakers, Rockets and Hornets - will appeal the league's veto. Little indication that the league will reverse course, especially considering that the NBA actually owns the Hornets, but it's only one of several subplots in the deal that never was. Among the juiciest: An email sent to NBA Commissioner David Stern by Cleveland Cavaliers owner Dan Gilbert, in which he called the proposed trade a "travesty." From the email (via Yahoo Sports)

Over the next three seasons this deal would save the Lakers approximately $20 million in salaries and approximately $21 million in luxury taxes. That $21 million goes to non-taxpaying teams and to fund revenue sharing. I cannot remember ever seeing a trade where a team got by far the best player in the trade and saved over $40 million in the process. And it doesn't appear that they would give up any draft picks, which might allow to later make a trade for Dwight Howard. (They would also get a large trade exception that would help them improve their team and/or eventually trade for Howard.) When the Lakers got Pau Gasol (at the time considered an extremely lopsided trade) they took on tens of millions in additional salary and luxury tax and they gave up a number of prospects (one in Marc Gasol who may become a max-salary player). I just don't see how we can allow this trade to happen. I know the vast majority of owners feel the same way that I do.

Meanwhile, Lamar Odom, who along with Pao Gasol would have been shipped out of L.A. as part of the deal for Paul, isn't sounding happy. From the LAT:

"I guess that means I'm a Laker if the trade didn't go through," a somber Odom said in a phone interview with The Times. "I don't know what to do for the Lakers. I'm even weirded out by the league doing what they did. I don't know what to do." Odom said he thought it was "a lie" when he was first told about the trade to New Orleans. "And then it doesn't go through," Odom said. "Oh, lord. I don't know what I'm going to do. I'll pray about it."

December 8, 2011

*Report: Gasol and Odom likely traded for Chris Paul

Wowser - Details are being finalized that would send Chris Paul to the Lakers, Pau Gasol to the Houston Rockets, and Lamar Odom to the New Orleans Rockets, ESPN is reporting. Ken Berger of CBSSports.com says that Paul-to-the-Lakers is "done."

From ESPN:

Sources previously told ESPN.com that the Lakers have made their willingness to deal forward Gasol for Paul clear to the Hornets, since L.A. is hoping to preserve Andrew Bynum to be the centerpiece of a trade offer for Orlando's Dwight Howard.

From Yahoo Sports:

If the Lakers were able to pull of this deal, it would leave the franchise with enough assets to still pursue Dwight Howard. The Orlando Magic might have interest in center Andrew Bynum as part of a larger package, especially if the Magic want someone to come down and clog up the middle. The other option for Orlando is to completely re-build post-Howard, and that would mean the Magic trade him to a place that can send back several first-round draft picks.

From the LAT, which quotes an unnamed source as saying it's a done deal:

Paul, 26, might be the best scoring-passing combo guard in the league and can even rebound well for a player listed at 6 feet, giving the Lakers their first dynamic point guard since Magic Johnson. Paul could have become a free agent next July, so the Hornets wanted to trade him before this season to avoid the distractions that befell the Denver Nuggets with Carmelo Anthony last season. Paul's contract calls for $16.4 million this season and a player option for $17.8 million next season. He will almost surely sign an extension with the Lakers.

*Edited post

Cardinal fans feeling the Pujols sting

From Will Leitch at NY magazine:

Albert Pujols and the Cardinals were linked in the way that Derek Jeter and the Yankees are linked, the way that Cal Ripken and the Orioles were linked, the way that Tony Gwynn and the Padres were linked. That is one of baseball's unique pleasures: The way one man can become an institution in a place, someone who 5-year-olds can talk about with 85-year-olds. Albert Pujols is not a bad person for leaving the Cardinals, and the Cardinals are not less of a franchise for losing him. This was rational actors acting rationally. There is nothing anyone should be ashamed of here. It still feels like we all lost something. It still feels like something everyone's gonna end up regretting. It still feels wrong. I suspect it always will.

Leitch also points out that Puljols is 32 and not in the best of shape. A 10-year deal with the Angels might be pushing it.

Thursday morning headlines

Stocks slide lower: Wall Street is following the latest developments in Europe very closely. At last check, the news was not so hot. Dow is down about 100 points.

Jobless claims drop to 9-month low: Weekly filings tumbled by 23,000, to 381,000. It's an encouraging number, but the key is having it stay below 375,000. (AP)

Republicans block Obama's consumer pick: Senate Democrats couldn't reach the 60-vote threshold to override a Republican filibuster on the nomination of Richard Cordray. He was to have been director of the Consumer Financial Protection Bureau. (Business Insider)

Pac Sun closes up to 200 stores: The Anaheim-based retailer also says it's received new financing - despite reporting its 13th straight quarterly loss. No word on which stores will be shutting down. (LAT)

Macy's not happy with Martha: The department store giant is reviewing its contract with Stewart after her company announced a partnership with J.C. Penney. Apparently, the deal took Macy's executives by surprise. From NY magazine:

Many in the business are wondering what [Ron] Johnson, the Penney CEO, is thinking. An exciting executive appointment given his background at Apple and Target, the industry was eagerly waiting to see what he'd do with the struggling JCPenney, which has been losing market share to stores like Macy's and Kohl's. Johnson said he wants to reinvent JCPenney, but "is Martha Stewart really the way to go?" WWD asks, noting, "his moves so far have left the industry puzzled, unimpressed -- or both."

Ridley-Thomas scores free tickets: The county supervisor, also a member of the Coliseum's governing commission, did not report receiving $560 worth of tickets to Carolina Panthers games, reports the LAT:

After The Times obtained Coliseum records about the purchase, Ridley-Thomas reimbursed the agency -- two years after he received the tickets -- officials said. The transaction is the first to tie a commissioner directly to a questionable expense at the Coliseum, whose finances have been the subject of 10 months of Times reports. The conflict-of-interest scandal has involved top managers and others at the stadium and companion Sports Arena. Several no longer work there as a result, and the reports have spurred two investigations and a city audit.

Edison president apologizes: Ron Litzinger wrote an open letter to customers who had been without power for days after last week's windstorm. As of last night, only a few hundred people were still not back online. (AP)

NBA players vote on deal: Ratification of the 10-year labor agreement is almost guaranteed. If that happens, training camps will be opened on Friday. Season starts Dec. 25. (Bloomberg)

Angels get Pujols: The 10-year deal for the St. Louis slugger is worth $250 million to $260 million, Yahoo Sports is reporting.

The contract value is the second or third highest in baseball history, behind the contract Alex Rodriguez(notes) signed with the New York Yankees in 2008 ($275 million) and perhaps higher than the one Rodriguez signed with the Texas Rangers in 2001 ($252 million). Clearly of the mind to change direction after failing to reach the playoffs in back-to-back seasons, the Angels will put Pujols in the middle of their lineup, steal more thunder from the limping Los Angeles Dodgers, and attempt to catch the prospering Texas Rangers in the AL West.

Bad news for THQ: The Agoura Hills-based videogame company is lowering its sales projections for the holiday season, citing disappointing results for its uDraw Game Tablet. (AP)

Big year to invest in electric cars: VC funding in the state totaled $467 million during the first half of the year - more than two-thirds of the entire category worldwide, according to a study. California is tied with Michigan in the number of patents filed for electric vehicle technology. (LAT)

December 7, 2011

Wednesday morning headlines

Stocks taking a dip: The usual European muddle, plus investors cashing out on recent gains. Dow is down about 40 points.

UCLA forecast stays tepid: Economists expect only a modest jobs recovery next year, with the state unemployment rate likely to remain in double digits until 2014. From Reuters:

The economic forecasting unit has a more optimistic outlook for California than just a few months ago in part due to recent jobs gains in the state's Central Valley and its Inland Empire region, east of Los Angeles. Both areas have been swamped with foreclosures that have devastated construction payrolls and sent local unemployment levels soaring. But recent data show the two regions have joined California's coastal metropolitan areas, which have benefited from expansion in their high-technology sectors as well as trade activity through their ports, with job gains. The gains for the state as a whole have been running recently at a faster rate than the country as a whole.

More hopeful forecast: Chapman University economists expect export activity to help fuel a bump in employment growth, especially in the second half of 2012. (San Diego Union-Tribune)

Brown's pension plan gets nod: A little more than half of California voters surveyed by the Field Poll say the governor's plan to dial back public employee pensions "strikes about the right balance." From the Sacramento Bee:

Brown's proposals offer less generous state and local pension benefits for new hires and raises the retirement age for many, among other changes. The governor's plan also would increase how much current employees pay toward their pensions and reduce how much employers pay in. The slim majority of voters polled agreed with Brown's proposals included 55 percent of registered Democrats and 43 percent of Republicans. Nearly one in four felt the plan "goes too far."

McCourt can keep parking lots: The Dodgers owner must sell the team by the end of next April, but he only needs to provide a long-term parking lease for whoever the new owner turns out to be. That lease entitles McCourt to build parking structures so he could use the land for development. (LAT)

California and Nevada in mortgage probe: The two states will jointly investigate misconduct and fraud. From the LAT:

In both states, the foreclosure process exists largely outside of the court system. For that reason, evidence of fraud in the foreclosure process has not emerged as readily as in other states. [Nevada Attorney General Catherine Cortez] Masto has perhaps made the most progress of any state attorney general in pursuing alleged fraud in the foreclosure process. Masto this week said she had widened a criminal probe that involves employees of Lender Processing Services, a Florida company that emerged as an important player in the fracas over faulty foreclosure practices. The ringleaders of the alleged scam were two Orange County loan officers.

L.A. firm to develop Chinese theme park: Theme park designer Ikonic Entertainment Group will be working on the martial arts attraction just south of the manufacturing city of Shiyan. It's a $3.1-billion project. (LAT)

J.C. Penney cuts deal with Martha Stewart: As part of the 10-year partnership, the retail giant will acquire a 16.6 percent stake in Martha Stewart Living Omnimedia and open Martha Stewart mini-stores in most of its locations. (CNNMoney)

December 6, 2011

Tuesday morning headlines

Stocks edge higher: That's despite all kinds of warnings by S&P about European debt (maybe investors have stopped paying attention to ratings agencies). Dow is up about 30 points.

Why bankers aren't prosecuted: A former Justice Department official says that it's too tough to build criminal cases. From the WSJ:

In an interview shortly before his move, [David Cardona, who was a deputy assistant director at the Federal Bureau of Investigation until he left last month for a job at the Securities and Exchange Commission], said a three-year slog through probes at large mortgage lenders and securities firms had led federal officials to conclude the U.S. government's best strategy in many cases is to pursue only civil charges. While defendants avoid the possibility of prison in such cases, they carry a lower burden of proof.

NFL nears TV deal: This would be an eight-year extension that's expected to return $3.2 billion a year, a 60 percent increase over the prior contract, the WSJ is reporting.

Still cheaper gas: An average gallon of regular in the L.A. area is $3.704, according to the government survey, down about a nickel from last week and about 20 cents in the last five weeks.

Forever 21 expands in China: The L.A.-based retailer is planning a 24,000-square-foot store in a multi-story Beijing mall. Additional stores are set to open in Shanghai and Hong Kong. Forever 21 made the announcement as part of the mayor's 10-day Asian tour. (LAT)

City National opens Atlanta branch: The area has seen growth in the entertainment business, which is the L.A.-based bank's mainstay. City National also has a branch in Nashville. (LAT)

Bank proposal gets modulated: The City Council is considering a plan that would require some banks to disclose detailed information about their lending practices in L.A. But it would not use the information to rate banks when awarding city contracts for financial services. From the LAT:

Miguel Santana, the city's chief administrative officer and the author of the slimmed-down proposal, described it as an attempt to strike a compromise between the banks and community activists. He had earlier warned the council that a proposed "responsible banking" ordinance could cost $58 million or more if it required the city to end contracts with some of its lenders.

Clerical workers return to work: But long-running talks between employers and the clerical unit of the International Longshore and Warehouse Union have yet to resume. The workers set up picket lines on Friday, but an aribiter ruled that the strike was "non-bona fide" and ordered them back to work. (Daily Breeze)

Californians oppose bullet train: Six out of 10 voters say they would reject a $10 billion bond package to fund high-speed rail, according to a Field Poll. Estimated cost of construction has jumped to $100 billion over 20 years, more than twice what was previously thought. (Sacramento Bee)

Edgar Bronfman stepping down at Warner Music: Confirms speculation that the long-time media mogul will reduce his role at the company, which was sold to Access Industries in May for $3.3 billion. He's resigning as chairman, but staying on as a director. (NYT)

December 5, 2011

Monday morning headlines

Stocks keep climbing: More positive signals from Europe. Dow is up about 150 points.

First-class mail to move slower: Starting next spring, no more next-day delivery, says the U.S. Postal Service. From AP:

The estimated $3 billion in reductions, to be announced in broader detail later Monday, are part of a wide-ranging effort by the Postal Service to quickly trim costs and avert bankruptcy. They could slow everything from check payments to Netflix's DVDs-by-mail, add costs to mail-order prescription drugs, and threaten the existence of newspapers and time-sensitive magazines delivered by postal carrier to far-flung suburban and rural communities.

L.A. faces $72 million budget shortfall: And that's less than six months into the fiscal year. Budget chief Miguel Santana is calling for cuts to the LAPD, Bureau of Street Services and city attorney's office. From the LAT:

Santana warned that the shortfall could grow once city officials calculate the cost of cleanup in the wake of this week's ferocious windstorms and the two-month encampment outside City Hall by Occupy L.A. "These are unforeseen problems that we have to pay for one way or the other," Santana said in an interview. "The timing was not helpful."

Big payday for ousted city official: L.A.'s housing authority board quietly agreed to pay Rudolf Montiel nearly $1.2 million in connection with his dismissal - much of that to be paid by insurance. From the LAT:

News of the agreement, reached in meetings over the last six weeks, sparked swift, sharp criticism of an agency already buffeted by a criminal investigation, probing auditors and allegations that officials have lavishly and improperly spent taxpayer funds intended for the poor on travel and entertainment. City Controller Wendy Greuel, who has been auditing the agency's travel expenses, released information Friday showing that officials billed the public for limousine rides and meals at pricey downtown hot spots, including Bottega Louie, Rivera and The Palm.

Questions about LAPD airport payments: The FAA is looking into whether the money paid to L.A. police for law enforcement services at LAX was misappropriated. From the LAT:

Federal Aviation Administration officials say they have begun reviewing a recent complaint alleging that the LAPD overcharged the airport and used the money to bolster city coffers and pay for police expenses unrelated to security at LAX, which has been described as a top potential target for terrorists. According to federal regulations, revenue earned by an airport from landing fees, terminal rents, concessions and other charges must be used only for airport purposes. Should violations be found, the city could be required to pay money back to the airport.

Another protest planned at City Hall: This one, set for this afternoon, will call on the City Council to pass the so-called Responsible Banking Ordinance that would assign blame among the major banks for foreclosures.

Volt sales are sluggish: Only 8,000 of Chevy's battery-powered vehicles are expected to be sold this year, below the target of 10,000. From the WSJ:

"We're getting a lot of interest, we're just not getting a lot of buyers," says William Willis, a Chevy dealer in Smyrna, Del. Mr. Willis says he has sold two Volts since the fall and has two on his lot. "Customers come in, they are wowed by the display, the quick acceleration. It's just going to take a while for the American public to accept the price." The $41,000 Volt solved the biggest hurdle with electric cars: range. But that came with compromises on price and space. Now questions have arisen about safety in the wake of fires caused by government crash tests.

Dodgers short of cash: Opening-day payroll is expected to be less than $90 million, well below previous years. (LAT)

American might cut capacity by 10%: That could be the fallout from its bankruptcy filing, with the deepest cuts likely to be in domestic operations. From Bloomberg:

American faces a balancing act between paring flights to save money and keeping its route system large enough to retain business travelers. The third-largest U.S. carrier has fallen behind United Continental Holdings Inc. and Delta Air Lines Inc., which both expanded through mergers since 2008. "I don't expect them to come out and say they're going to slash their network because that would raise questions on how viable this entity is," Hunter Keay, a Wolfe Trahan & Co. analyst, said in an interview. "Something in the range of 5 to 10 percent is possible."

Hollywood office tower sold: The 12-story TV Guide Hollywood Center, located across the street from Grauman's Chinese Theatre, was purchased by Hudson Pacific Properties for $92.5 million. Seller was CIM Group. (LAT)

December 2, 2011

Magic Johnson going after Dodgers

And he apparently has the money lined up, telling LAT columnist Bill Plaschke that he would be part of an ownership group that includes Stan Kasten, former president of the Atlanta Braves and Washington Nationals, and Mark Walter, CEO of Guggenheim Partners, a financial services firm. From the Times:

"The first thing I asked Walter was, 'Do you want to win, and do you want to put money in?' He said, 'Absolutely.' "Both guys are about building a winner and making a difference in the L.A. community." That Johnson has his money lined up puts him, for now, ahead of several potential bidders, including former Dodgers owner Peter O'Malley. Kasten, one of baseball's power brokers, has been rumored as a candidate for commissioner upon the eventual retirement of Bud Selig.

Keep in mind that bidding for the Dodgers will not be a popularity contest. It's mostly about who has the highest offer, especially since current owner Frank McCourt will oversee the auction. Also keep in mind that the team's financial books have yet to go out to prospective bidders and goodness knows what surprises those might have.

November 29, 2011

Business Update on KPCC: L.A.'s fastest growing private companies

The Business Journal's annual list is always an interesting compilation of the types of businesses that are doing really well. This year, seven of the 10 fastest growing private companies have some connection with the Internet or computers. And they're mostly companies that provide a service, as opposed to making some sort of widget. Also, a look at the potential bidders for the Dodgers. Steve Julian is back. Available at kpcc.org and podcast (Business Update with Mark Lacter). Transcript is after jump

Continue reading "Business Update on KPCC: L.A.'s fastest growing private companies" »

November 26, 2011

*Tentative NBA deal is clear win for the owners

Early reports indicate that the players made all kinds of concessions that include an overall annual salary cut of up to $300 million. The revenue split will be 50-50, which is what owners had been offering for some weeks and a huge change from the 57-43 split that has favored the players. And it's a 10-year deal, the longest in NBA history. From the NYT:

Much needs to be done before the basketballs hit the court. Officials on both sides must still negotiate myriad so-called B-list issues, including drug testing, the age limit and use of the Development League, and the entire collective bargaining agreement must be formally constructed. The deal must be ratified by a simple majority of the 30 teams and a simple majority of the 430-plus players. Before that can happen, the parties must dispense with two pending lawsuits, and the players must reconstitute their union, which was dissolved on Nov. 14.

*David Berri, an economics professor at Southern Utah University, provided some context at Freakonomics earlier this week:

At the onset of the lockout, the leverage was with the owners. This is primarily because the money made in basketball comes at different times for the owners and the players. The players are paid for the regular season, and receive regular paychecks throughout the season. So once regular season games are lost, the players start losing money. What matters most for the owners is having enough of the season so that the playoffs can be played. The owners also lose money when games are not played. But the owners also make a significant chunk of their money after the regular season ends. When the regular season paychecks stop, the owners start making money on the playoffs. And that means the owners are not quite as bothered by games being canceled at the beginning of the season.

November 25, 2011

Hedge fund gazillionaire prepares bid for Dodgers

Add Steven Cohen to the list of really rich guys interested in buying the team, reports the WSJ. Cohen is said to be working with Steve Greenberg, an investment banker with Allen & Co. who has close ties to Major League Baseball (he was deputy commissioner for a while). If this were a regular franchise sale, baseball executives might be put off by Cohen's firm, SAC Capital Advisors, coming up in connection with a wide-ranging federal investigation into insider trading (there have been no accusations of wrongdoing). But MLB isn't running the show this time - the U.S. bankruptcy court is, in conjunction with current owner Frank McCourt. From the Journal:

Normally, any link to such an investigation, no matter how peripheral, could spell trouble for a bidder under MLB's approval process, according to the people familiar with the matter. But, if the Dodgers current owner, Frank McCourt, and his financial advisers determine that MLB is unjustifiably eliminating someone who could potentially submit a large offer, it can challenge that decision in court--something it wouldn't be able to do if the team weren't in bankruptcy proceedings.

Bid books are expected to be distributed soon after Thanksgiving, reports the Journal, and the first round of bidding is planned for January. But the sale could take many more months to resolve. Adding to the complexity: McCourt wants to market the media rights as part of the auction process. Fox had offered the team a 17-year extension valued at $2.7 billion, but the deal was rejected by the league. Fox claims that it has exclusive rights to negotiate a new deal, but McCourt wants to open up the bidding to all comers.

Earlier: Report: Rick Caruso considers bid for Dodgers

November 22, 2011

Report: Rick Caruso considers bid for Dodgers

Wait, it gets better. Story in the NYT says that Caruso has approached Joe Torre about joining his effort to purchase the team. Caruso's name has not shown up much in the roster of potential bidders, but he would be an obvious possibility. From the NYT:

Torre, who resigned in 2007 after 12 seasons as the Yankees' manager to manage the Dodgers for McCourt for nearly three years, would fit snugly into the growing roster of possible suitors. Peter O'Malley, whose family owned the Dodgers for 47 years, is a declared candidate. So is Fred Claire, a former general manager. Two former Dodgers, Orel Hershiser and Steve Garvey, have voiced desires to be parts of groups. Then there are the superrich suitors, like Thomas Golisano, the former Buffalo Sabres owner, who said he would buy the team without any partners; the high-profile investor Ron Burkle; the philanthropist Eli Broad; and potentially many others, like Magic Johnson. The judge overseeing the bankruptcy of the Dodgers still must agree to the process of selling the Dodgers that McCourt and M.L.B. agreed to.

Torre told the NYT this afternoon that "I'm not part of any group," although he did note that a number of people have reached out. "But I've made no alliance, no commitment, as of this minute."

November 18, 2011

Friday morning headlines

Stocks moving higher: Wall Street trying to recover from yesterday's loss, but there are lots of cross currents. Dow is up about 50 points.

Upping forecast: Some economists now say that the current fourth quarter will be much stronger than expected, with growth expected to run around 3 percent. These are some of the same economists who were talking double-dip recession a few months back. But wait... B of A economists are lowering growth estimates for next year. (Bloomberg)

L.A. gas prices take small dip: But they're still higher than normal for this time of year. An average gallon of regular is $3.816, a nickel lower than last week, according to the Auto Club.

Occupy L.A. update: Yesterday's demonstrations downtown resulted in 72 arrests. This morning a Superior Court judge will consider a motion for a temporary restraining order to prevent police from breaking up the Occupy L.A. encampment around City Hall. (LAT)

Crystal Cathedral sold: An OC bankruptcy judge chose the Roman Catholic Diocese of Orange over Chapman University. Purchase price is $57.5 million. From the LAT:

In a day filled with drama and deep emotion, Chapman had pressed its case with a newly escalated bid of $59 million, only to complain that it had been blindsided by the Crystal Cathedral board, which came down firmly on the side of the Catholic Church. In the end, [Rev. Robert H. Schuller] himself gave his blessing to what once would have seemed unthinkable: the conversion of his sleekly modern masterpiece in Garden Grove, a place where fresh breezes blow through open walls and church services feature talk-show-style interviews, into a Catholic cathedral redolent of incense and ancient ritual.

Expect changes at the U-T: Look for a strong pro-business slant, including what sounds like unquestioned support for a new football stadium. From the Voice of San Diego:

[John Lynch, the former local radio executive who will become the newspaper's new president and CEO], wants that sports page to be an advocate for a new football stadium "and call out those who don't as obstructionists." "To my way of thinking," Lynch said, "that's a shovel-ready job for thousands." More changes will be evident after the deal closes between Nov. 30 and Dec. 15. Lynch said they want a stronger editorial page and to attract younger readers. Lynch hopes to bring other media into the building. He wants to be a newspaper industry precedent-setter. "You change now or you die," Lynch said.

Big drop at the Port of Long Beach: Inbound traffic fell 20.8 percent in October and outbound was down 21.4 percent. One reason for the drop: the facility is operating with six terminal operators instead of the seven it had in 2010. The Hyundai cargo terminal moved to the Port of Los Angeles. (LAT)

Wilshire/Barrington project to shrink: No longer a 28-story tower, as first envisioned in 2004, the developers are opting for a six-story mixed-use property with 78 units. (CurbedLA)

Staff shortage at LAX customs: No wonder people hate the airport - passengers are waiting for up to three hours to be processed for international flights. From the Daily Breeze:

Only 20 of the 60 federal inspection booths are typically staffed during peak arrival times at LAX's Tom Bradley International Terminal, triggering "alarming delays" for airline passengers, Gina Marie Lindsey, executive director of LAX, wrote in a letter delivered three months ago to the head of CBP. "The problem is immediate and present," Lindsey wrote to CBP Commissioner Alan Bersin in a letter obtained Thursday by the Daily Breeze.

November 16, 2011

McCourt sues Fox Sports

So I'm taking bets: Which mess gets settled first, Dodgers or NBA? It's a tough call, perhaps made tougher with this morning's lawsuit against Fox Sports. Owner Frank McCourt accuses the TV network of trying "interfere with the sale of the Dodgers and their assets in bankruptcy." This all stems from McCourt looking to auction off the TV rights, bypassing Fox's exclusivity on negotiations through late next year. He has asked a bankruptcy court judge to declare that provision unenforceable. Meanwhile, the LAT's Bill Shaikin notes that the sale agreement between McCourt and Major League Baseball has yet to be filed with the court. All this suggests that the process is likely to be long and contentious - and by opening day it's quite possible that we'll still be stuck with schmuck-face as the owner. From LAT columnist T.J. Simers:

Until he's gone, taking root in some posh Boston hotel and there is documented evidence he has no more ties to the Dodgers, I shall remain suspicious of everything he does.

Wednesday morning headlines

Stocks slide: Wall Street is catching up with the new concerns out of Europe. Dow, paring some of its earlier losses, is down about 30 points.

Tame inflation: L.A.-area prices were unchanged from September to October, although they're up 2.8 percent from a year earlier. Energy and food prices have moderated a bit. (OC Register)

Oil back over $100 a barrel: Don't be surprised if gas prices go back up in the coming weeks. Traders are becoming more hopeful about the economy, which means higher demand. (AP)

Big jump in exports: The Port of Los Angeles reported a 28.1 percent jump in outbound traffic last month, while imports, which represent a far larger portion of port activity, rose just 5.5 percent. October numbers for the Port of Long Beach aren't out yet. (LAT)

Student protest expected: Well, let's say students mixed in with folks from the Occupy movement. They're planning to march in Long Beach later today if, as expected, the Cal State Board of Trustees approve a 9 percent tuition increase. Extra security is planned for the meeting. (ABC 7)

Uncertain outlook for Occupy L.A.: The latest word is that protesters may move from the City Hall lawn, but no immediate shutdown is planned. (Daily News)

NBA players file suit: Now that the union has been decertified, players are accusing the league in separate filings of an illegal boycott that will do harm to their careers. From the NYT:

More lawsuits are expected now that the collective bargaining process has collapsed, and the players are no longer protected by a union. A separate faction of players, who had been pushing for decertification of the union before it disbanded, may pursue its own lawsuit. Another suit could be filed on behalf of rookies, who could be considered a separate class since they have never had a contract or paid union dues. Eventually, all the lawsuits will have to be combined, with the players and the owners each arguing to have the case heard in the jurisdiction it favors. That could create a further delay, although [players attorney David] Boies said he hoped it would not slow down the process. He said he hoped for a summary judgment on the damages before the season is canceled.

Dodger payroll to be reduced: The bankruptcy and impending sale are being cited, a source told the LAT. That pretty much knocks out the prospect of signing big-name free agents.

Galaxy leaves Fox Sports West: L.A.'s pro soccer team will be seen on the new Time Warner Cable sports channels beginning in 2012. The 10-year deal is valued at $55 million. From the LAT:

Of greater consequence is that the Galaxy is the second pro team to jump to Time Warner Cable, following the Lakers, who in February signed a 20-year broadcast deal valued at $3 billion. The Lakers, who have been on FSW, will move to Time Warner Cable's stations beginning with the 2012-13 season. Time Warner Cable is also expected to pursue the Dodgers. The team's current contract with Fox forbids them from talking to any other broadcast outlet until Nov. 30, 2012, but outgoing owner Frank McCourt has asked the U.S. Bankruptcy Court to let the Dodgers solicit bids now from Time Warner Cable and any other interested parties.

Changes to Apple's board: Long-time director Art Levinson becomes non-executive chairman, and Disney CEO Bob Iger becomes a director. From Bloomberg:

Adding Iger may cement ties to Disney, on whose board Jobs had a seat, and may ensure that Apple retains access to the entertainment company's TV shows and movies, said Gene Munster, an analyst at Piper Jaffray Cos. Levinson's appointment lets Tim Cook concentrate on being CEO without the added responsibility of being chairman, he said. "They're trying to shore up the Disney relationship or strengthen that relationship because it's an important part of where Apple is going," Munster said.

LAX runway plan put on hold: The FAA doesn't have funding to install stoplights for 10 high-speed taxiways and one runway. Construction was supposed to begin two months ago. (Daily Breeze)

November 15, 2011

Revised design for Farmers Field

farmers.jpg The idea is to create more openness for the proposed venue, with what the LAT describes as "flight-like" wing coverings. The deployable roof can be taken off in a few hours. The original design, said Tim Romani, CEO of the design firm Icon Venue Group, "was too enclosed, I felt the original concept was too heavy."

"This showcases the advantage of being in Los Angeles, how people would rather be outside or inside," said Ron Turner, principal of the project's lead architect, Gensler. "We need a symbol, a gateway. It's important for people to say, 'Wow! That's L.A.' " The home NFL team will determine whether to leave the roof on or not, said Michael Roth, spokesman for stadium developer AEG.

November 14, 2011

Assessing the potential loss of an NBA season

Just for openers, ESPN, ABC and TNT pay the league nearly $1 billion a season to air games. Advertisers spent $807 million last season. An average of 2 million people watched regular-season NBA games on ESPN last year, and an average of 2.5 million watched regular-season games on TNT (numbers from WSJ). None of that includes local broadcasts on Fox and KCAL. So what happens without all that money and all those viewers if the season is canceled? From Sports Business Daily:

The longer the lockout, the bigger the advantage for ESPN in offsetting any loss of NBA ad sales, industry analysts said. "Putting together a replacement package for the NBA is easier for ESPN than Turner," said Brad Adgate, senior vice president and director of research at Horizon Media. "ESPN has the live sports content and Turner will turn to its drama and movies to make up for NBA programming."

[CUT]

ESPN was to begin its NBA coverage Nov. 2. The network will use live college football and college basketball games to fill any programming gaps caused by the lockout. Last week, ESPN2 used coverage from the Pan American Games in place of a scheduled preseason NBA matchup. ABC does not have any NBA programming until Christmas Day. "We are working closely with our advertisers and are prepared to re-express dollars currently committed to the NBA to other properties," according to an ESPN statement.

The Christmas Day package will be particularly hard to replace because ABC relies on those games to promote its prime time schedule. The only good news is that much of the ABC/ESPN ad revenue is skewed towards the spring - and perhaps they might be able to cobble an abbreviated season. As for local broadcasts, KCAL can easily revert to its prime time news lineup (albeit at much lower ad rates). Fox, however, has little to replace the huge revenue that's generated from Laker broadcasts.

November 11, 2011

Penn State could take financial hit

Most anything can turn into a business story - even the horrendous sex abuse scandal involving Joe Paterno. For starters, Moody's has put the school's solid Aa1 bond rating under review for possible downgrade. The ratings agency will assess the potential impact of lawsuits, a drop in applications, and the possible loss of donations. A lower rating could mean the school having to shell out more money to finance its borrowing - not devastating but an additional headache for administrators. Also comes word that a few advertisers have pulled commercials from ESPN's broadcasts of upcoming Penn State games. It's not just commercials - companies with any sort of marketing deal with the school are probably taking a second look. From the WSJ:

Over the past few years, college sports has become a hotbed of marketing activity for companies, which increasingly are littering campuses with signs and hiring student "brand ambassadors" to talk up their products on school grounds. Corporations this year are expected to shell out $640 million on sponsorship deals with college sports--a 25% increase from 2007, according IEG, a Chicago research firm owned by ad-holding company WPP PLC. Pro sports, by comparison, is expected to lure about $2.46 billion in deals this year, IEG says.

Friday morning headlines

Stocks taking off: Volatile week ending on the plus side, largely because the news out of Europe is promising. Dow is up more than 250 points.

About Europe: Italy's Senate approved a package of economic reforms that the European Union had been demanding (AP), while Greece's new interim Cabinet was sworn in (AP). Feeling better?

Consumer sentiment brightens: The preliminary Reuters/ University of Michigan index for November rose to 64.2, up from 60.9 the previous month and 55.7 in August. Number is still high but it's moving in the right direction. (Calculated Risk)

Housing affordability increases: The number of California households who are in a position to purchase a home edged up to 52 percent in the third quarter, from 51 percent for the previous three months. (LAT)

Oil prices back up: Benchmark crude is running more than $98 a barrel, which would indicate some encouragement about the economy. Meanwhile, an average gallon of regular in the L.A. area is $3.866, no real change from last week, according to the Auto Club.

NBA makes new offer: It's the final offer, say league officials, and if the players approve (a very big if), a 72-game season could begin in mid-December. The players are expected to respond next week. From the NYT:

The offer is based on a 50-50 split of league revenues, which the union is resigned to accepting. But it also contains an array of new restrictions on player movement and team payrolls, all of which the union opposes, and which still threaten the approval of any deal. Those so-called system issues were the primary focus of the last two days of talks.

Pickup in Dodger ticket sales: Reduced prices (and perhaps McCourt's decision to sell) help explain the 30 percent increase from last year. (LAT)

Localities can ban pot stores: Potentially big blow for medical marijuana industry as a state appeals court upholds the ban in Riverside - and sets the stage for other cities and counties to enact similar prohibitions. From the LAT:

The recent decisions could give the state Supreme Court an opportunity to address critical issues that remain unsettled 15 years after voters made California the first state to allow medical use of marijuana. Despite the state's groundbreaking status, its medical marijuana program is the most tumultuous. The state's four federal prosecutors have ramped up enforcement to shut down dispensaries and growers. Long Beach City Atty. Robert Shannon said the city filed its appeal to the Supreme Court on Thursday. "The law is in total disarray," he said. "There is no clarity and consistency."

Videogame's one-day sales record: Activision's latest iteration in the "Call of Duty" series, "Modern Warfare 3," generated $400 million during the first 24 hours of sales. (THR)

November 10, 2011

Another bidder for Dodgers

Billionaire Tom Golisano, the former owner of the Buffalo Sabres hockey team, says he has the financial resources that would make him an attractive candidate. But he's not local, and after the McCourt fiasco there's sure to be special consideration to bidders who have an L.A. connection. That, and the highest price. From the WSJ:

The biggest problem for Mr. Golisano is the growing public campaign, especially in the media, to ensure that the baseball team's new owner is an "Angeleno." While he suggested he might move to Los Angeles if he became the team's owner, he has never attended a game at Dodger Stadium and is a lifelong New York Yankees fan. His outsider status could count against him when competing against local bidders with roots and connections in the city, especially after the city's experience with Mr. McCourt, a Boston developer who moved to Los Angeles after acquiring the Dodgers in 2004.

Earlier this week, the LAT reported that another potential bidder, Chicago White Sox executive Dennis Gilbert, had lined up two L.A.-based financial backers. Clearly, other names will emerge.

Thursday morning headlines

Stocks struggling back: The market's zigzagging is about more than European debt. Jim Cramer is right (see post below). Dow is up about 60 points.

Good news on jobs: Weekly claims for unemployment fell to a 7-month low, to 390,000. Still high, but the trend line is moving in the right direction. (AP)

California jobless claims keep dropping: They fell to 522,388 in September, the lowest level in more than two years. From the OC Register:

The number of unemployed in the state remained painfully high at nearly 2.2 million. Many, however, no longer receive unemployment benefits or were self-employed, didn't earn enough money or were otherwise ineligible for aid. One of the biggest groups that no longer receives benefits is the so-call 99ers -- those people who have exhausted the maximum 99 weeks of unemployment.

Greece selects prime minister: Lucas Papademos is a respected economist, having what the NYT describes as "an avuncular style." His mission is to approve the terms of a European aid package. From the Guardian:

Born in October 1947, Papademos studied at Massachusetts Institute of Technology (MIT) in America during the 1970s. He holds a degree in physics, a masters in electrical engineering and a doctorate in economics. As he pointed out himself, he is an economist not a politician - having held academic positions at Columbia University, Harvard University and the University of Athens. He also worked for the Boston branch of the Federal Reserve. But Papademos's biggest job within Greece, until now, was to run the Bank of Greece between 1994 and 2002. That stint covered the period in which Greece prepared to join the eurozone (it was admitted at the start of 2001)

Big jump in foreclosures: California saw a 17 percent increase in filings last month compared with a year earlier, according to Realty Trac, which might be a good thing because it indicates that the months-long logjam is loosening up. One in every 243 housing units had a foreclosure filing during the month. (DJ)

NBA update: Some progress appears to have been made, but no one is ready to say that the end is near. Talks between the league and the players broke up early this morning in NY and they'll be back at it today. (ESPN)

Villaraigosa's roads plan: Mayor wants to essentially borrow 27 years worth of Measure R tax revenue and spend it repairing nearly 1,500 miles of streets. From the LAT:

The mayor's allies said the proposal could create 1,000 jobs and address one of the public's top priorities: paving roads and eliminating potholes. But Councilman Bernard C. Parks, who heads the budget committee, voiced concern about using up so much money in such a short period. And he pointed to the borrowing costs, which would probably exceed $600 million. "If you are going to consciously use 27 years of funding in two years, not only are you obligated to tell people what you're using it for, you're also obligated to tell people what's not going to be available going forward," said Parks, who was briefed on the proposal last week.

Brian Grazer to produce Oscar show: He replaces Brett Ratner, who resigned earlier this week after making a few dumb remarks. No word on the host- Eddie Murray withdrew yesterday in the wake of Ratner's departure. (THR)

James Murdoch testifies again: Rupert's son (and News Corp.'s CEO) denied misleading a parliamentary panel during an appearance in July. From the NYT:

Mr. Murdoch seemed combative and self-assured, repeatedly denying during the two-and-a-half hour interrogation that he had received evidence of "wider spread phone hacking" at a crucial meeting in 2008. "No, I did not," Mr. Murdoch replied after a committee member asked him if he had, in fact, given misleading testimony about what he knew and when he knew it. He did appear to alter one aspect of his account, acknowledging that he was made aware in 2008 of a damning e-mail that contained evidence that phone hacking was more widespread at one of the company's newspapers, The News of the World, than he has publicly acknowledged. But he insisted that its exact nature had not been made clear to him.

Wal-Mart to start sales at 10 p.m. Thanksgiving night: The retail giant is looking for an edge over other chains, which are opening at midnight. Most Wal-Marts will actually stay open on Thanksgiving. (NYT)

Speedier security checks: New federal program to be tested at LAX allows a faster screening process for passengers - provided they are willing to answer some pre-flight questions. From the Daily Breeze:

The TSA's "PreCheck" program allows travelers boarding American Airlines flights to voluntarily provide personal information, making them eligible to enter a special security line without removing their shoes or submitting to other stringent screening measures, TSA Administrator John Pistole told the Senate Committee on Commerce, Science and Transportation. The TSA launched the program as an experiment earlier this year at airports in Atlanta, Dallas, Detroit and Miami, where passenger feedback has been "favorable," Pistole said.

November 9, 2011

Some movement in NBA talks?

Well, the league's deadline to accept its revenue offer has come and gone, and both sides are still talking. Actually, the players have signaled a willingness to consider the proposed 50-50 revenue split, which is what got both parties back to the table - for how long no one knows. From the NYT:

The union's offer to accept the 50-50 split was conditional on the owners compromising on some proposed free-agency restrictions. The league wants to ban luxury tax-paying teams from executing sign-and-trade deals and from using the full midlevel exception, worth $5 million. The union fears that those rules, combined with a more punitive tax, would strangle the free-agent market.

You never know in labor talks, but they could be reaching a critical stage. If the players and the owners are unable to reach a deal soon - or at the least have the framework of a deal - a good chunk of the season might be in jeopardy.

Wednesday morning headlines

Stocks fall sharply: Investors are still worried about Italy. Dow is down more than 200 points.

Vote of no confidence: Investors are jumping ship on Italian bonds, with yields topping 7 percent - the highest level in more than 10 years. From the NYT:

In Europe's months of crisis, yields in excess of 7 percent have triggered calls for bailouts and the subsequent demise of governments in Ireland, Greece and Portugal, but Italy's debt is much higher than in those countries. The 7 percent barrier is seen partly as a symbolic threshold, but it also reflects hard financial facts: borrowing costs at that level make it difficult for Italy to raise new funds to pay off what it owes. The figure is widely seen by bond market analysts as unsustainable.

Mixed earnings: Macy's posted strong third-quarter numbers and raised its full-year outlook (AP), but GM's third-quarter profits fell 15 percent from a year earlier. The automaker was dragged down by losses in Europe. (AP)

Questioning city business tax: The idea that phasing out the gross receipts tax in the hopes that new economic activity will offset revenue losses is "improbable at best," says economist Chris Thornton. His economic firm provided a second analysis on the business tax plan. (LAT)

Runoff in City Council race: Assemblyman Warren Furutani will face police officer Joe Buscaino for the 15th district council seat that was vacated by Janice Hahn. The runoff is in January. (Daily Breeze)

Higher airfares for the holidays: If you haven't yet made reservations, expect ticket prices to be 6 percent to 12 percent higher than a year ago - and the planes will be packed. From the LAT:

"Passengers still should expect full flights during the Thanksgiving holiday travel season as airlines have begun to reduce capacity and limit the number of seats available for sale due in part to rising cost pressures," said John Heimlich, chief economist for the [Air Transport Association]. The higher fares and cuts in airline capacity mean people traveling for Thanksgiving, as well as for Christmas, will be forced to depart much earlier and return much later after the holidays if they want bargain fares.

L.A. hotels staying full: The county-wide occupancy rate in September was 76 percent, up almost 6 percent from a year earlier, while the average room rate of $151.31 was 6.4 percent higher than in 2010. Numbers are from PKF via the OC Register.

Yelp plans to go public: Goldman Sachs and Citigroup to lead an IPO that could value the online review company at up to $2 billion, the WSJ is reporting. Offering could happen early next year

Several Internet companies launched offerings earlier this year, but in mid-August, market volatility essentially closed the market for new IPOs. Excitement over Groupon's deal last week now "indicates there's investor demand for leading Internet companies, which is motivating others to consider accessing the market," said Matt Sperling, head of the equity advisory practice at Rothschild Inc.

Time Warner Cable considers bidding for Dodger games: It would be similar to the deal that the cable service cut with the Lakers - what would be part of TWC's regional sports network, Bloomberg is reporting. The Dodgers' TV rights are owned by Fox through 2013.

NBA deal deadline this afternoon: Not much of a deadline anymore since the players have rejected the league's take-it-or-leave-it revenue offer. Hard to know what comes next - other than the likelihood of more canceled games. (USA Today)

November 8, 2011

Report: Dodger sale attracting big money

Seems like Dennis Gilbert, a special assistant to Chicago White Sox owner Jerry Reinsdorf, is preparing a serious bid for the team. LAT reports that he has lined up two financial backers: Bruce Karsh, president of L.A.-based Oaktree Capital Management (Forbes estimates his net worth at $1.6 billion), and Josh Friedman, founding partner and co-chairman of Canyon Capital Partners, a $19-billion hedge fund based in Los Angeles (one of Canyon's partners has been involved with Magic Johnson in urban revitalization projects). This could be a potent combination given the L.A. connections. But it's early.

Tuesday morning headlines

Slip-sliding stocks: Early gains are being pared back as investors keep an eye on the inconclusive headlines from Italy. Dow is down about 10 points.

Berlusconi's exit would not resolve much: The Italian prime minister appears to be on his last legs, but it's doubtful whether a new government would be capable of shoring up public finances and tackling reforms. From Reuters:

A worst-case scenario could see weeks or months of instability and continued reform inertia. Italy's benchmark bond yields are at an unsustainable level well above 6 percent and would be far higher without support from the European Central Bank. Funding needs are modest for the next two months but will rise sharply going into the new year, as major debt redemptions are due in February and March.

Olympus hid losses: The camera giant admitted that acquisitions were used to mask huge losses in what's becoming one of the largest accounting frauds in Japanese history. From AP:

The company consistently denied any wrongdoing and sacked its chief executive last month after he raised concerns about the acquisitions and the payment to an obscure Wall Street firm. Olympus did an about-face on Tuesday, issuing a statement saying that an independent panel investigating allegations had found that acquisitions were used to cover up losses on investments dating to the 1990s. During that time in Japan known as the "Lost Decade," many Japanese companies took to making speculative investments in securities to offset sluggish sales following the bursting of Japan's economic bubble.

Fox not happy with Dodger auction: The sale includes separate bidding for media rights, and Fox says that it has the exclusive right to negotiate a new deal. From the WSJ:

"We fully support a change in ownership of the Dodgers," a Fox spokesman said in a statement. "In that process, Fox has rights that cannot be violated, as MLB has stated. We have rights that we negotiated and paid for. We will take all necessary steps to aggressively protect and defend those rights." As is true for every baseball team in a major market, the Dodgers' local-media rights are its most valuable asset. The Dodgers now get roughly $37 million a year from the deal with Prime Ticket. Earlier this year, Fox offered Mr. McCourt a 17-year extension of their deal, valued at $2.7 billion. The offer, which MLB vetoed, included a 35% stake in Prime Ticket.

NBA update: With tomorrow's league deadline looming, the players association is deciding whether to take another meeting with NBA officials. A group of hard-line owners seem to be running the show at this point. (Yahoo Sports)

Amgen to buy back shares: The $5 billion repurchase program, which would be financed through a bond sale, is an effort to boost the stock price of the Thousand Oaks-based biotech company. In the process, though, Amgen will be taking on more debt. (LAT)

Challenging pot dispensary closings: A group of lawsuits throughout the state is aimed at stopping U.S. attorneys from closing medical marijuana shops. The suits argue that the federal government's threats to prosecute dispensary owners and their landlords conflict with an earlier agreement. (LAT)

Playboy consolidates in Bev Hills: The Chicago-based company will move its Socal offices to the former Hilton Hotels headquarters near City Hall. (LAT)

Big drop in bankruptcies: L.A. County individual and business filings were down 17.4 percent in September compared with a year ago, the continuation of a downward trend. (OC Register)

New port director in Long Beach: Longtime shipping executive Christopher Lytle replaces Richard Steinke. Lytle joined the port in 2006 and was promoted as Steinke's deputy two years later. (Press-Telegram)

Exempt car dealers from business tax?: That's what L.A. Mayor Antonio Villaraigosa will be proposing later this morning. Over the years the city has lost dozens of dealerships to nearby municipalities. (City Maven)

LAX upgrade considered: More palm trees, improved walkways, and a paint job for the terminals are among the projects being considered. From the Daily Breeze:

The airport's lower arrivals roadway may be the most challenging area to upgrade, [said Luci Woodard, vice president of AECOM, a Los Angeles-based engineering firm that drew up the proposal]. "When you're down there, you know, it feels dirty ... with 50-year-old concrete," Woodard said. "It just looks that way, no matter how clean it is." LAX's nine terminals were all built at different times, leading to a mishmash of inconsistent designs.

November 7, 2011

Monday morning headlines

Choppy stocks: Dow is down about 30 points, but there's little direction to begin the week.

Greece update: They're working on a new interim government that will allow the rescue package to move forward and avoid bankruptcy, at least for now. From AP:

The eurozone ministers will not discuss unfreezing Greece's bailout loans that had been kept on hold while the country sorted its political turmoil, according to a European official, who spoke on condition of anonymity. Paying out those loans will depend on the Greelk government approving the rescue package agreed on Oct. 27, the official said. "Things are headed in the right direction. Today, the national unity seems to be forming in Greece, which is a positive development," said French Foreign Minister Alain Juppe. "But what's important is that the bailout plan for Greece gets ratified."

What about Italy?: That's the new worry - and an Italian default could be a much scarier deal than a Greek default. Prime Minister Silvio Berlusconi continues to lose support, but he's refusing to step down. From the NYT:

Mr. Berlusconi's ability to steer Italy, Europe's third largest economy, has been called into question by a prolonged deadlock in Parliament over the scope of sweeping changes encompassing everything from pensions to privatizations. Lawmakers from his Peoples of Liberty party have begun to openly criticize Mr. Berlusconi, a censure that would have been unthinkable until a few months ago.

NBA talks looking bleak: The owners have given the players until Wednesday to accept a 50-50 revenue split proposal (along with new restrictions on free agency and team payrolls), but it's very doubtful the players will accept. After that, the revenue offer will drop to 47 percent. (NYT)

New Nook from Barnes & Noble: The struggling bookstore chain is introducing the $249 Nook tablet that it hopes will compete with Amazon's $199 Kindle Fire. Company says its device is worth the extra $50 because it has more memory and a faster processor. (All Things Digital)

Disney, YouTube deal: The Mouse House's Interactive Media unit will spend $10 million to $15 million on original video series that will be distributed via a co-branded channel on Disney.com and YouTube. (NYT)

Steve Jobs film at Landmark: This is based on a 70-minute interview with the late Apple CEO that was conducted in 1995. Less than 10 minutes of the interview was used in a PBS documentary. The film will premiere at the Regent in Westwood. (LAT)

Time Warner bids for reality producer: The media giant made an unsolicited offer of $1.4 billion for Endemol NV, creator of "Deal or No Deal" and "Wipeout," the LAT is reporting. Endemol has been in financial trouble.

Departures at O'Melveny: L.A.'s oldest law firm has lost more than 30 partners since January, and revenue is falling. From the Business Journal:

Former partners and industry consultants who work with O'Melveny, many of whom would not speak for attribution, said the firm has stumbled in transitioning from its roots as an L.A.-centric, litigation-heavy firm to a more international, transactional firm centered on New York. They say a divide has opened up between West Coast attorneys who frequent the courtroom and East Coast attorneys who handle mergers, corporate finance and other transactions - stemming from O'Melveny's 2002 acquisition of high-powered New York law firm O'Sullivan.

De Niro to play Madoff: The HBO film will be based on the book, "Truth and Consequences: Life Inside the Madoff Family" by Laurie Sandell. (THR)

November 4, 2011

More pushback on downtown L.A.

Some weeks back we posted a Hollywood Reporter piece about film studios being reluctant to hold premieres at the downtown Regal Theaters, part of the L.A. Live complex. They prefer the Westside for all kinds of reasons. Now comes word, also via THR, of resistance to move the American Film Market's annual shindig from Santa Monica to downtown. You read right - people are actually reluctant to leave the beach and trudge to what remains (sorry, boosters) a still-grungy, second-tier urban center. AFM officials are mulling the move.

"If they move downtown I'll really have to question whether I should come at all," said Ruediger Boess, acquisitions head for European broadcaster ProSiebenSat 1. "There are many film markets around the world and the successful ones are the ones that take into consideration their participants," reads a petition being circulated at the AFM to remain in Santa Monica. "We do not want to be packed into soulless places in the middle of a crowded downtown." Jeffrey Beach, CEO for UFO International Productions, said buyers have told him "it's a detriment to move it downtown.

The reality, of course, is that buyers will attend whatever markets provide the best business opportunities. And if that happens to be downtown, so be it. But the pushback does provide a glimpse into the less-than-enthusiastic reactions of out-of-towners to a downtown that remains, to be charitable, a work in progress. As AEG and its loyal cadre of political hacks proceed with plans for a stadium and revamped convention center, it's a point worth noting. Joel Kotkin offers his take:

To be sure, recent years have seen the growth of a central city restaurant scene, and some 30,000 residents now live in the area compared to closer than 20,000 a decade ago. Yet just outside the immediate, highly-subsidized core, population growth in the surrounding parts of central city over the past decade stood at a mere 0.7%, the lowest rate since the 1950s. The vast majority of the region's population growth took place in the far-flung regions of the San Fernando Valley. As an economic engine, downtown LA simply does not warrant the attention, nor the special treatment, that the city's ruling elites give it. For one thing, it represents a far smaller part of the city's economy when you compare it to the urban cores of Washington, D.C., or New York City. Indeed, in New York and D.C. roughly 20% of all employment is in the central core; in Los Angeles it's barely 2.5%.

NBA labor talks looking bleak

A group of 10-14 owners led by Michael Jordan of all people is refusing to make any more concessions to the players, and apparently would vote down a 50-50 revenue share plan, which the league has suggested and which the players have rejected. Owners are scheduled to meet tomorrow morning, followed by a meeting of league officials and players. But with Jordan, owner of the Charlotte Bobcats, not wanting the player's share to be higher than 47 percent, there might not be much to talk about. Oh, and 50 players are threatening to dissolve the union if anything less than 52.5 percent of revenue is accepted, or if no deal is produced this weekend. Seems like a real mess. Remember, though, it's still November. (NYT)

Vegas going craaaazy over LSU-Alabama

More bets have been received than for any other college game this year - and it could even top last year's National BCS Championship. No. 2 Alabama, which is playing at home, is favored over No. 1 LSU by 4 or 5 points - a spread that hasn't moved all week despite LSU getting most of the bets. So what's the story? From Business Insider:

There are two possible explanations. One is that professional wise guys are evening up the action by placing monster wagers on Alabama. Todd Fuhrman of Caesar's indicated that he's seeing sharp action on Bama earlier this week, and he thinks the line will move to make LSU an even bigger underdog by Saturday. Another reason the line isn't moving is that this game is being bet so heavily that Vegas has decided to set a line it's comfortable with and sick with it. Every square bettor in the world is going to have this game in their parlays and teasers -- essentially guaranteeing that the books will make money even if they are more exposed to an LSU cover.

Friday morning headlines

Stocks fall: More worries about Greece and only a so-so jobs report. Dow is down 160 points.

Sluggish employment growth: See post below. I'll have more later.

Groupon opens sharply higher In its first few minutes as a public company, shares were trading at nearly $30, up from the $20 IPO price. There's lots of skepticism, however. (WSJ)

McCourt leaving town?: Divorce settlement has Jamie keeping four homes - two in Malibu, one in Holmby Hills, and one in Vail, Colo. - while Frank keeps two homes in Massachusetts. (LAT)

Jan Perry resigns from leadership post: She's not happy about behind-the-scenes maneuvering over redistricting and who will take over the council presidency once Eric Garcetti steps down. (LAT)

No more Sunset 5: Laemmle Theatres couldn't come to terms on a lease renewal, but Robert Redford's Sundance Cinemas will take over the five-screen complex in West Hollywood. The place will close for renovations in December and reopen next spring. (LAT)

Steve Job bio huge hit: What a surprise, right? The authorized biography of the late Apple CEO has sold 383,000 copies since its release on Oct. 24. (NY Post)

Gas prices stay steady: An average gallon in the L.A. area is $3.869, about what it was last week, according to the Auto Club.

Expect less Thanksgiving travel: High-priced tickets and a sluggish economy may mean 37,000 fewer passengers a day, a decline of about 2 percent from last year. (Bloomberg)

"Funny Girl" put on hold: A weak economy has made it difficult to raise money for the revival, which was set to open in early 2012 at the Ahmanson Theatre before moving to Broadway. (LAT)

November 3, 2011

Thursday morning headlines

Stocks gaining: Some decent economic news and more hope about European debt deal. Dow is up over 130 points.

Greek update: The proposed referendum on a bailout plan - what European leaders have gone ballistic over - has been scrapped. Plus, Prime Minister George Papandreou could be close to forming a coalition government, though he says he will not step down. From the FT:

Mr Papandreou's strategy for an in-or-out referendum was undermined by Evangelos Venizelos, his deputy and finance minister. In a written statement after arriving back from the G20 summit in Cannes, Mr Venizelos said: "If we want to protect the country we must, under conditions of national unity and political seriousness and consensus, implement without delay the [European summit's] decision of October 26." Pressure mounted on Mr Papandreou ahead of an emergency cabinet meeting after three more legislators declared their opposition to the referendum plan, wiping out the ruling Pasok socialist party's slim parliamentary majority at a stroke.

Dip in jobless claims: Weekly filings fell 9,000, to 397,000, the lowest level in five weeks and only the third time since April that applications have fallen below 400,000. (AP)

Mixed bag for retailers: October chain store sales generally came in below estimates as consumers continue to spend cautiously. From AP:

But retailers are hoping that their lowered optimism won't seep into the holiday shopping season in November and December, a period when merchants can make up to 40 percent of their annual revenue. "Consumers are regrouping and retrenching and saving their pennies for the holiday season," said Ken Perkins, president of Retail Metrics, a research firm.

O'Malley interested in Dodger bid: The team's former owner tells the LAT that he wants to form an ownership group and return as chief executive. "I want to reconnect the team and the community," he said.

Price tag on Dodger sale?: Perhaps as high as $1.5 billion, which would easily be a record for a U.S. sports team, reports the WSJ.

An array of business, finance and media titans have already expressed interest in buying the team or becoming a part of an ownership group. Many have deep connections to the Southern California region. They include former sports agent Dennis Gilbert, who flirted with a bid for the Texas Rangers before backing out; magnate Ron Burkle, a co-owner of the National Hockey League's Pittsburgh Penguins; the developer and philanthropist Eli Broad, who bid for the Dodgers in 2004; Dallas Mavericks basketball-team owner Mark Cuban, who bid for baseball's Texas Rangers and Chicago Cubs; cable-industry veteran Leo Hindery and financier Marc Utay, who tried to buy the Cubs in 2008; Tom Schieffer, a former president of the Texas Rangers who ran the Dodgers earlier this year after MLB seized the team; and Peter Guber, the film producer and founder of Mandalay Entertainment, an owner of the NBA's Golden State Warriors and numerous minor league baseball teams.

News Corp. not interested: Chief Operating Officer Chase Carey says that the company's Fox Sports unit won't bid for the team. (Bloomberg)

Activists shut down Port of Oakland: As many as 7,000 people blocked the main port entrance, chanting slogans and halting all truck traffic going in or out. Later, police in riot gear arrested dozens of protesters who broke into a vacant building. From AP:

Port officials hoped to resume maritime operations Thursday "and that Port workers will be allowed to get to their jobs without incident. Continued missed shifts represent economic hardship for maritime workers, truckers, and their families, as well as lost jobs and lost tax revenue for our region." Big trucks were backed up Thursday morning as footage on KGO-TV showed about a dozen protesters manning a chain link fence blocking a port entrance. Truck drivers argued with protesters, who said they planned to stay until at least 9 a.m.

DirecTV expands headquarters: The El Segundo-based satellite service will rent additional space in a deal valued at more than $300 million - the largest lease in L.A. County in the last decade. Subscriber growth was strong in the third quarter. (LAT)

Lobbyists set records: Various interest groups in Sacramento have spent more than $200 million in the first three quarters of the legislative session, a 5 percent jump over the year earlier. (California Watch)

November 2, 2011

Before you celebrate too much about the Dodger news...

Auctioning off the team is likely to be a messy and lengthy exercise, and there's no assurance that the new owner will be to everyone's liking. LAT columnist Steve Lopez writes that "you could grab anyone off the street and get better results," which is the sort of thing giddy people say before giving it a second or two of thought. Glad to see Maury Brown over at Forbes provide a more sober assessment.

Before we can say for sure that the sale is even on, [U.S. Bankruptcy] Judge Gross has to sign off on the settlement between McCourt and MLB. He's going to want to want insurances - as are the secured and non-secured creditors of the Dodgers - that they all have their debt satisfied. That means there are a host of interests in the sale price running from MLB itself, which loaned the Dodgers $150 million in DIP financing, to Bryan Stow, the fan who was beaten so severely on Opening Day at Dodger Stadium that he was left in a coma. A lawyer for Stow said his medical bills could be as high as $50 million. But, the wild card in it all is McCourt. He's going to be looking for as much money as he can out of the deal, and let's be honest; he's not exactly one to suddenly want to play nice with Bud Selig.
[CUT]
As we saw in the auction of the Texas Rangers in 2010, who winds up bidding gets into issues for the league. If Mark Cuban and Jim Crane had won the auction, MLB said at the time it could take another six months for a vote to approve the ownership group to occur, and even then, there was no guarantee that they would pass the owners' muster. To that end, what happens if that group of Chinese investors that said prior that they were willing to pay $1.2 billion for the Dodgers surface again? It's a different world from when Nintendo purchased the Mariners, but the concerns are the same: How do we deal with a group we really know very little about.

Mayor Antonio Villaraigosa said this morning that the new owner should be from L.A., but there's hardly any assurance that will happen. The usual suspects, folks like Eli Broad, Ron Burkle, and Ed Roski, are not impulsive buyers, even when it's a local institution. And don't forget that any potential bidder will want to pore over the team's financial books, which aren't likely to be pretty. Just remember what troubles Fox had in selling the team seven years ago. Point is, this could drag out quite a while.

*Will Fox Sports become a bidder for the Dodgers?

It's at least a possibility, reports Bloomberg News. Fox, which is part of the News Corp. empire, is expected to compare the price of renewing its current TV contract with the cost of buying the team, reports Bloomberg, citing a source. This isn't likely to sit well with Dodger fans, considering that News Corp.'s decision to sell the team in 2004 brought with it the Frank McCourt era. Actually, Fox was so desperate to unload the ball club that it helped arrange financing for McCourt. Given that history, I'm betting Baseball Commissioner Bud Selig will do everything humanly possible to avoid another Fox ownership.

*Mayor Antonio Villaraigosa says this morning that the new Dodgers owner "absolutely has to be someone from L.A."

Wednesday morning headlines

Stocks in recovery mode: Europe remains in tatters, but the markets can't go down forever, right? Some encouraging job news might be helping. Dow is up over 200 points.

Payrolls gain ground: Private employers added 110,000 jobs in October, according to ADP, which is a bit better than expected. Also, companies made fewer job cuts during the month, according to Challenger, Gray & Christmas. (CNNMoney)

Dodgers up for sale: Catching up on last night's news that Frank McCourt has finally agreed to give up the team (and the stadium and the parking lots). From LAT columnist Bill Plaschke:

The new owner could be anybody from the Dallas Mavericks' Mark Cuban to the Milwaukee Brewers Mark Attanasio to some anonymous rich businessman who steps out of the shadows at the last minute. Remember, nobody had ever even heard of Arte Moreno until seemingly hours before he bought the Angels, and the same thing could happen here. The candidates are many, the brand will be strong again, the financial ceiling here is limitless, it will be the best job in baseball the minute someone takes it. And there is only one thing for certain. Bud Selig owes us. The baseball commissioner who allowed a seriously underfunded McCourt to take the team from desperate Fox in 2004 owes us a strong and viable owner this time.

OC Register owner sells TV division: Sinclair Broadcast Group is buying eight stations owned by Freedom Communications (all outside California) in a $385 million deal. Freedom's CFO also dismissed long-running rumors about the company being sold to Tribune Co. From the OC Register:

Freedom emerged from bankruptcy in April 2010 with $325 million in debt, some of which has been paid down in the last 18 months. The privately-held company began pursuing strategic alternatives for its properties about a year ago. "This is the final chapter of bankruptcy," [said CFO Mitchell] Stern. "As a company essentially free of debt, Freedom will have greater financial flexibility allowing us to take advantage of opportunities that may arise in the future." Stern dismissed earlier media reports that the Register was being sold to the Tribune Co. and merged with the Los Angeles Times or would be bought by MediaNews Group, owner of the Los Angeles Daily News and eight other daily papers in the greater Los Angeles area.

Tribune Co. revising bankruptcy plan: Company officials are optimistic that the changes will be enough to win approval from federal judge Kevin Carey. From the Chicago Tribune:

Tribune Co. employees, meanwhile, reacted with alarm Tuesday to Carey's finding that plan provisions shielding them from litigation stemming from the company's 2007 leveraged buyout were unsupportable. Tribune Co. had sought releases for employees who sold Tribune Co. stock into the deal, many of them through their 401(k) accounts.

UCLA revises building plans: The school has selected a new site for its hotel and conference center, abandoning a plan to have the complex on the site of the current faculty club. (LAT)

Vallejo no longer bankrupt: A federal judge finally released the small Bay Area city after three years. Among other changes, city workers now contribute more to their health insurance, new firefighters have lower pension plans, and the fire department no longer has minimum staffing requirements. (SF Chronicle)

November 1, 2011

Tuesday morning headlines

Stocks open sharply lower: October was a terrific month for the markets, but November is starting way down. For that you can blame Greece. Dow is off more than 200 points.

Greece on verge of collapse: Lawmakers are rebelling against Prime Minister George Papandreou's surprise call for a referendum on a new aid package. From the NYT:

Such a collapse would not only render the referendum plan moot, it would likely scuttle -- or at least delay -- the debt deal that was agreed on in Brussels last week, putting Greece on a fast track to default and possible exit from the monetary union of countries sharing the euro currency. Analysts said that Mr. Papandreou's call for a referendum was a last resort, meant to gain broader political support for the unpopular austerity measures in the deal without forcing early elections that would only worsen the country's political and economic turmoil.
Lots of missing money: We're talking hundreds of millions of dollars from the customer funds of MF Global, the brokerage firm that's filed for bankruptcy. Regulators are looking into whether MF Global diverted some of the money. From DealBook:
The discovery that money could not be located might simply reflect sloppy internal controls at MF Global. It is still unclear where the money went. At first, as much as $950 million was believed to be missing, but as the firm sorted through its bankruptcy, that figure fell to less than $700 million by late Monday, the people briefed on the matter said. Additional funds are expected to trickle in over the coming days.

Fed meets: Two-day policy meeting isn't like to result in any major policy changes, especially since the economy appears to be settling down. (AP)

McCourt nearing deal to sell Dodgers?: The current scenario would give him some control over a sale, reports the LAT, and would probably include Dodger Stadium and the surrounding parking lots. From the Times:

Based on figures McCourt submitted to the Bankruptcy Court, he would be hard-pressed to sell the Dodgers' television rights, settle his divorce and be left with enough capital to renovate Dodger Stadium and restore the team to prominence. "I don't know that there's a way for him to win," said Marc Ganis, president of the sports business consulting firm Sportscorp Ltd.

Honda production disrupted: The flooding in Thailand is causing a parts shortage. Production at the carmaker's U.S. factories will be reduced by half through Nov. 10, and factories will close on Nov. 11. (LAT)

Gas prices flat: An average gallon of regular in the L.A. area is $3.893, according to the government survey, essentially unchanged from last week.

October 25, 2011

Tuesday morning headlines

Stocks fall: New worries from Europe and some less-than-rosy economic reports are bringing down the market. Dow is down about 60 points.

Netflix plummets: Really bad morning for shareholders of the movie rental company - the stock is down more than 36 percent, or $43 a share. Wowser! It's all about weak financial results and a poor outlook. (Barron's)

Disappointing home price report: The L.A. area saw a 0.4 percent drop between July and August, according to the Case-Shiller Index, which is a poor showing compared with the 20 metros surveyed. L.A.'s year-to-year decrease was 3.5 percent. (press release)

Consumer confidence resumes fall: The index stands at 39.8, down from 46.4 in September. Kind of surprising, given the recent batch of decent news. From Conference Board press release:

Consumer confidence is now back to levels last seen during the 2008-2009 recession. Consumer expectations, which had improved in September, gave back all of the gain and then some, as concerns about business conditions, the labor market and income prospects increased. Consumers' assessment of present-day conditions did not fare any better.

Small drop in gas prices: But unusually high for this time of year: An average gallon of regular in the L.A. area is $3.896, according to the government survey, down a couple of pennies from last week.

How much did McCourt "loot" from Dodgers?: Major League Baseball puts the price at $189.2 million. From the LAT:

The league alleged McCourt had broken 10 MLB rules -- any of them grounds for termination of his franchise -- including what MLB termed the "siphoning" of team revenue for non-baseball use. "The Dodgers are in bankruptcy because McCourt has taken almost $190 million out of the club and has completely alienated the Dodgers' fan base," the MLB filing read. In the filing, the league claimed McCourt funneled $73 million in parking revenue through Blue Land Co., a non-team related entity; used $61.16 million in team revenue to pay off personal debts; and took $55 million from team revenue for personal distributions.

Pension board to consider changes: This may not sound like much, but the City Employees' Retirement System board is scheduled to vote today on whether to lower the long-term projection of its investment return from 8 percent to 7.75 percent. A drop in the return would increase the city's payment to the fund by nearly $27 million next year. From the LAT:

Similar adjustments already have been made by other public pension agencies during the economic downturn. But Villaraigosa wants the decision delayed for one year to lessen the effect on the city budget. "This request is completely reasonable ... given our own financial situation," he said Monday.

Rand retracts pot study: Highly unusual move by the Santa Monica-based research organization. The study had suggested that marijuana dispensaries might actually help reduce crime in their neighborhoods, but the researchers made mistakes in compiling data. (LAT)

More passengers at LAX: Airport traffic was up 6 percent in September compared with a year earlier. Year to date, traffic is up 5.6 percent. At other airports, Ontario was down and John Wayne was up slightly. (Eye on L.A. Aviation)

October 24, 2011

Dodgers lower ticket prices

The fire sale is on at Chavez Ravine - season-ticket packages have reserved seats going for $6 (lowest in 24 years), top deck at $5, preferred boxes at $16, and preferred loge at $10. I wouldn't expect a stampede - ticket prices aren't what's driving fans away. But how else can the franchise boost attendance, short of its owner agreeing to sell? (LAT)

October 21, 2011

Fox, Telemundo pay $1 billion for World Cup rights

Fox's $425 million bid for the 2018 and 2022 competitions beat out ESPN's $400 million, The Wrap is reporting. Telemundo will pay $600 million for Spanish-language U.S. rights. You may recall that ESPN had the rights in 2010 and 2014.

In keeping with its typical line of explanation, ESPN said it remained "disciplined" but "aggressive." That's code for "we got outbid and didn't want to spend as much as it would have taken." Meanwhile, Fox's deal means that it not only gets the men's World Cup, but all FIFA events from 2015-2022. That includes the women's World Cup, as well as the under-20 and under-17 national team competitions.

Press conference is set for later today.

October 20, 2011

NBA talks break down

After three long days of negotiations under the auspices of a federal mediator, the players and owners remain far apart on an agreement, according to NBA Deputy Commissioner Adam Silver. No further meetings are scheduled, which means it's likely more games will be canceled. "We are saddened on behalf of the game," Silver said. "We understand we're disappointing millions of fans." From the WSJ:

San Antonio Spurs owner Peter Holt said that scheduling more meetings could be tougher than earlier in the negotiations. "We are getting in a situation where games are being canceled, the costs are getting more and more for all sides, which makes it tougher to make a deal. Both sides hopefully won't harden," he said.

The two sides apparently couldn't get close on how to split the league's $4 billion in revenue. The owners had proposed a 50-50 split, the NYT is reporting, but the players want 52.5 percent.

Thursday morning headlines

Stocks edge lower: Llots of confusion on whether a European debt deal is getting close. Dow is down about 40 points.

Jobless claims down a bit: Weekly filings are running 403,000, still too high to see any significant job growth. (AP)

Leading indicators up a bit: The Conference Board's index of economic activity was up for the fifth consecutive month in September, but the increase was small. (AP)

More rioting in Greece: Tens of thousands of people in the streets. Meanwhile, there are new concerns about whether a bailout deal can be worked out in the next few days. (The Guardian)

California subpoenas B of A: State investigators want to know whether the bank and its Countrywide subsidiary sold mortgage-backed securities under false pretenses, the LAT is reporting, citing a source.

The subpoenas, which were served Tuesday, come as talks continue for a broad foreclosure settlement by a coalition of state attorneys general and federal agencies. California walked away from those discussions with major banks more than two weeks ago, saying what the banks were offering was not enough and the state would pursue its own investigations. California has left the door open to signing on to a bigger settlement, and the BofA subpoenas were seen as a move to exert further pressure on the bank.

Layoffs at Amgen: The biotech firm is eliminating 380 research and development jobs, 226 in Thousand Oaks. Company employs 6,200 people in the L.A. area. (LABJ)

Investors ignoring California bonds: Yields are just too low, and that's forcing the state to boost interest rates. From the LAT:

This week, individual investors put in orders for a modest 22% of the state's offering of $1.8 billion in tax-free bonds to finance infrastructure projects. By contrast, those buyers had snapped up 28% of the state's previous debt sale, in September. And in November they sought nearly 80% of the bonds California offered for sale. The state still was able to complete this week's sale because institutional investors, such as mutual funds, stepped up to buy what individuals left on the table.

NBA talks continue: Owners and locked-out players meet for the third straight day. No indication of whether they've made any progress. (LAT)

Local firms get preference: Mayor Villaraigosa signs law that would essentially reduce local bids by 8 percent in the awarding of city contracts. Change involves awards of over $150,000. (LAT)

Sewer bills going up: Look for increases of 4.5 percent in each of the next three years and 6.5 percent after that. Money will be used to fund upgrades to aging pipes. (Daily News)

October 19, 2011

Wednesday morning headlines

Stocks keep wavering: Lots of earnings and mixed economic news to sort through. Dow is up about 20 points.

Homebuilding jumps 15 percent: Most of the gains came from apartment construction. Single-family home construction, which represents nearly 70 percent of homes built, rose only slightly. (AP)

Higher prices for L.A.: September saw a 0.5 percent jump in the Consumer Price Index compared with a month earlier and a 3.1 percent increase over the last year. That's lower than the national level, which was up 3.9 percent in the last 12 months. (OC Register)

Social Security recipients get boost: A bump in inflation means a 3.6 percent increase in benefits next year, the first raise since 2009. The increase starts in January. (AP)

Protests in Greece: That's after Prime Minister George Papandreou vowed to push through a new round of austerity measures. From Bloomberg:

Riot police in white helmets used tear gas to hold back demonstrators from the parliament building in the Greek capital today as lawmakers debated the extra austerity measures demanded by Greece's international creditors to keep aid flowing. Police said about 70,000 people gathered in Athens at the start of a 48-hour strike in one of the biggest protests yet against Papandreou's latest program of cost-cutting and tax rises.

NBA talks keep going: Both sides met for 16 hours yesterday and they'll be back at it again under the auspices of a federal mediator. (Boston Globe)

Unkind words for Jamie McCourt: LAT columnist Bill Plaschke says good riddance to Frank's estranged wife and the Dodger executive many, many folks in baseball grew to hate.

Together they didn't know anything about owning or running a baseball team, but they had too much ego to ask, so they walked into Chavez Ravine blindly pounding the team's infrastructure as if one of baseball's most revered franchises was a blue-and-white piñata. While both took their whacks, the furious tone was set by Jamie, who fired some good people, forced some other good people to quit, and generally created a bullying atmosphere that did not encourage good people to join. She tried to rebuild the organization in her image because, as it turns out, she was only concerned with that image. She preached community but only practiced Jamie. She talked about teamwork but only huddled with Jamie.

Rift between father-and-son Murdoch?: That's what the NYT is reporting, and it raises obvious questions about Rupert's heir apparent at News Corp.

Their disagreements, which were described in detail by more than half a dozen former and current company officials and others close to the Murdochs, stemmed in large part from the clashing visions of a young technocratic student of modern management and a traditionalist who rules by instinct and conviction. The tension grew worse as the gap between the New York headquarters and James's London operations, where he oversees the company's European and Asian holdings, proved difficult to bridge. The elder Mr. Murdoch reached his boiling point last winter, said one of the former officials, and delivered a blunt ultimatum to his son.

Real estate firm awarded $50 million: Newport Capital Advisors accused money manager Commonfund of reneging on an agreement involving several projects in Hollywood. (LAT)

Railroads being sued: An environmental group is accusing Union Pacific and Burlington Northern of producing harmful amounts of diesel pollution at rail yards in Carson, Commerce and downtown. (LABJ)

October 18, 2011

Kobe not playing in Italy after all

Well, at least he won't be playing exhibition games for the basketball team Virtus Bologna. Owner Claudio Sabatini, who kept insisting that a deal was almost done, appears to be backing off, according to an Italian newspaper. But there may be more to the story. From the LAT:

Those reading the tea leaves might see this as a sign that the NBA owners and players union might broker a deal as they meet Tuesday with federal mediator George Cohen. But it's also a sign that amid Bryant's desire to maximize his health, his overseas ventures never really seemed that realistic.

No word yet on today's bargaining session.

Tuesday morning headlines

Stocks wavering: So-so earnings and continued worries out of Europe point to a mixed session. Dow is hovering near the line.

B of A reports profit: The sale of assets offset continued losses in mortgage portfolio. Earnings topped analyst expectations. (DealBook)

Banks making more loans: The numbers remain modest and heavily weighted toward the strongest corporate and consumer borrowers. But banks are lending. From the NYT:

There are myriad explanations behind the uptick in loan growth, including more customers taking advantage of ultra-low interest rates and borrowers in need of cash drawing on their credit lines. Others believe the downbeat headlines in recent weeks have been overblown. If the confidence clouds hanging over Europe and the United States were removed, the lending figures would be even stronger, analysts and bankers say.

Mattel goes after Thomas the Tank: The El Segundo-based toymaker is nearing a deal to acquire Hit Entertainment, the British owner of the Thomas the Tank Engine brand. WSJ reports that the deal could be valued at $789 million.

NBA talks resume: This time with a federal mediator who will try to make some progress in negotiations that have gone nowhere. Today will be the first bargaining session in more than a week. (NY Daily News)

Lead at Disneyland: Glass windows, brass rail chains, door knobs and drinking water fountains are among the items that have high levels of lead, according to an environmental group. From the LAT:

The Mateel Environmental Justice Foundation filed a lawsuit in Orange County Superior Court in April against Walt Disney Parks and Resorts U.S. Inc., alleging excessive levels of lead in such commonly touched objects as the Sword in Stone attraction, where Disneyland photographers encourage children to pose while pulling on the sword handle. Other objects include brass door knobs at Minnie's House and stained-glass windows in a door at the entrance to a beauty salon in Cinderella's Castle. "We are asking the court to force Disney to take steps that should have been taken when we first told them that children at Disneyland are in danger of illegal lead exposures," Mateel President William Verick said in a statement.

Another CA pension fund opposes Murdoch: The California State Teachers' Retirement System is withholding its votes for the entire slate of nominees to the News Corp. board, including CEO Rupert Murdoch. Last week, Calpers said it would withhold its votes for Murdoch and his two sons. The News Corp. shareholders meeting is Friday in L.A. (LAT)

Trade bills could help port traffic: The legislation lowers tariffs on U.S. autos, beef, citrus, tree nuts, cotton and wine to South Korea, Panama and Colombia. That's good news for California farmers and manufacturers. From the Press-Telegram:

The U.S. Chamber of Commerce believes the deal could double California's trade with Korea by about 2020, primarily by opening a growing market for the state's film, high-tech, auto, aerospace and agricultural industries. In addition to cuts on existing auto tariffs, the plan eliminates a 15 percent tariff on California wine and an 8 percent tariff on computer parts, two of the state's top exports.

Airlines win slots in Long Beach: JetBlue Airways, Delta Airlines, and US Airways received the positions being vacated by Allegiant Airlines. Destinations will be announced shortly. (Press-Telegram)

October 17, 2011

Monday morning headlines

Stocks lower: Vague concern about Europe is about all it takes these days. Dow is down more than 130 points.

Decent bank earnings: It was Citigroup's seventh-straight quarterly profit - despite weak results from its investment bank. Wells Fargo reported a drop in the write offs of bad loans. (DealBook, AP)

New Apple iPhone off to fast start: Four million smartphones were sold in the first three days of sales - more than double the previous iPhone launch during its first three days. (PC Mag)

McCourts reach divorce settlement: Under the deal, reported by the LAT, Jamie McCourt would get about $130 million and relinquish any claim to a share of the Dodgers.

The settlement would remove Jamie McCourt as an obstacle to Frank McCourt's plan to retain ownership of the team by selling the Dodgers' television rights in U.S. Bankruptcy Court. The agreement also would appear to set up a winner-take-all court showdown for the Dodgers between Frank McCourt and Commissioner Bud Selig.

California frittering away $9.1 billion?: That's how much the state is sitting on, LAT columnist George Skelton reports. The money covers infrastructure bonds that have been sold and are costing the state $630 million in debt payments.

The borrowed money is stashed in various drawers throughout the bureaucracy instead of circulating around California creating jobs. Why? No one I talked to seems to know. They're trying to find out. Or they're waiting for someone to tell them. There's a vague partial explanation about the state changing its system of disbursing bond money three years ago and not yet adjusting to it. Something like that. Sounds a lot like bureaucratic inertia. The governor probably needs to kick some butt.

L.A. office rents keep falling: Average asking price in the third quarter was $2.47 a square foot, down from $2.56 a year earlier. Countywide, office vacancies rose slightly to 19 percent from 18.5 percent a year earlier. From the LAT:

The soft market was a boon for tenants willing to sign leases. But few companies are finding the need to expand their quarters with the economy tepid and hiring at a standstill. Business bosses "have gone on a personnel diet," said Jim Kruse of CBRE Group Inc., the real estate brokerage formerly known as CB Richard Ellis. "They are trying to get through and maintain as much market share as they can without putting a lot of cash into operations."

California has 1 in 4 solar jobs: That's way more than any other state, according to a study (Colorado was second). From the LAT:

The Golden State ranked first in the nation for generating electricity from both photovoltaic solar panels and concentrated solar power systems that use mirrors to create steam to run turbines, the study said. "This report shows that the solar industry is not only creating green jobs across California but that the industry is forecast to continue growing at a much faster pace than the overall U.S. economy," said Michelle Kinman, a clean energy advocate for Environment California. "California industry and policymakers have a tremendous opportunity to build on this solid foundation and make solar a centerpiece of the state's energy policy."

Doctors group supports legalizing pot: The California Medical Association is the first major medical association in the nation to urge legalization - despite questioning marijuana's medicinal value. From the LAT:

Dr. Donald Lyman, the Sacramento physician who wrote the group's new policy, attributed the shift to growing frustration over California's medical marijuana law, which permits cannabis use with a doctor's recommendation. That, he said, has created an untenable situation for physicians: deciding whether to give patients a substance that is illegal under federal law. "It's an uncomfortable position for doctors," he said. "It is an open question whether cannabis is useful or not. That question can only be answered once it is legalized and more research is done. Then, and only then, can we know what it is useful for."

Rocky Delgadillo's new jobs: The former L.A. City Attorney has been named the top executive of the L.A. County Medical Association. (LAT)

October 14, 2011

Friday morning headlines

Stocks higher: Better-than-expected retail numbers might be helping, though the market has been pulling back in the last hour. Dow is up about 70 points.

Consumers keep buying: Retail sales jumped 1.1 percent in September, the largest gain in seven months and another indication that the economy, while weak, is not dead. (AP)

But consumer confidence still terrible: Actually, the Reuters/University of Michigan number was worse than expected. Clearly, this makes no sense.

Good quarter for Mattel: Barbie dolls and "Cars 2" toys were behind a 6 percent increase in third-quarter earnings for the El Segundo-based toymaker. (AP)

Gas prices back up: Blame tighter supplies in California. An average gallon of regular in the L.A. area is $3.845 per gallon, about 3 cents higher than last week, according to the Auto Club. Meanwhile, oil prices are higher because of renewed confidence about the economy. (AP)

Gap closures create headaches: Mall owners already struggling to fill space must now deal the loss of a major retailer. Gap plans to shutter almost 200 of its stores in North America by the end of 2013. From the WSJ:

Gap stores are ubiquitous in U.S. shopping malls, and the planned closings comes at a bad time for mall owners, who are already weathering competition from online shopping sites and vacancies left from the bankruptcies of retailers such as Borders Inc., Linens 'n Things and Circuit City Stores Inc. Market researcher Reis Inc. reported last week that regional mall vacancies rose to 9.4% in the third quarter from 9.3% in the second, a record since it began publishing the data in 2000.

NY park cleanup postponed: The owner of the property where protesters have been camped out for several weeks is looking for a way to appease everybody. From Bloomberg:

Demonstrators formed cleanup crews that swept and mopped through the night as crowds gathered ahead of the owner's planned move. More than 3,000 people had gathered at the site, according to an e-mail from Patrick Bruner, an Occupy Wall Street spokesman. "I've slept here, and the conditions are more sanitary than my own apartment," said Max Hodes, 28, from Brooklyn, who said he's a member of the protesters' crew that swept and scrubbed the area last night. "We have a moral imperative to stay here," he said, standing next to brooms and buckets.

iPhone goes on sale: It's the usual lineup of early adapters waiting to purchase Apple's latest smartphone, which is supposedly faster and better equipped. Steve Wozniak, who created Apple with Steve Jobs in a Silicon Valley garage in 1976, was first in line at a store in Los Gatos. (AP)

Netflix to offer CW shows: The streaming deal could be worth as much as $1 billion and illustrates how much the media markets are splintering. From the NYT:

The CW deal results from a yearlong evolution at Time Warner in which the chief executive, Jeffrey L. Bewkes, established a set of guidelines for monetizing content via subscription streaming services such as Netflix, Hulu Plus and Amazon Prime. "Our rules included bypassing the quick and easy money," Mr. Bewkes said in an interview Thursday. "We established a strategy to responsibly work with Netflix." That strategy included not separating the rights to TV shows, which would have allowed the same show to be sold into syndication on a traditional TV network and then sold, at a diminished rate, to an online subscription service.

McCourt's debt overload: The Dodger owners owes so much money that even selling the team for double or more what he had paid might not make him whole. From the LAT:

Baseball currently believes the total long-term debts for all McCourt entities funded by Dodgers revenue to be close to $600 million -- not including the $150-million bankruptcy loan, according to a person familiar with the matter but not authorized to comment publicly. The Dodgers did not respond to a request for clarification of their current debt status. In case of a sale, McCourt would have to pay off taxes as well as debts. In July, McCourt told the divorce court that "a sale would result in ... the incurrence of between $80 million and $200 million in tax liabilities."

Latest on NBA talks: Commissioner David Stern is talking about no basketball on Christmas Day unless the two sides can cut a deal by next week. Lots of posturing, very little movement. (LAT)

Princess to resume stops in Mazatlan, Puerto Vallarta: The turnabout comes a couple of months after the cruise line decided to bypass the two Mexican port cities because of concerns about drug-related violence. The additions don't take effect until November of next year. (LAT)

Big Long Beach real estate deal: Molina Healthcare is buying the Arco Center office high-rise for $83 million. The Long Beach-based health care company has been leasing more than 100,000 square feet of the property. (Press-Telegram)

October 13, 2011

Thursday morning headlines

Stocks lower: Weaker earnings from JP Morgan is helping bring down the market. Dow is off about 130 points.

JP Morgan profit falls: Lingering mortgage troubles and weak investment banking results are behind the 4 percent drop in third-quarter earnings. Even so, the banking giant beat analysts' expectations. (DealBook)

Jobless claims barely budge: More evidence of an anemic employment market, with weekly filings falling by 1,000, to 404,000. Real job growth would require the number to be under 375,000. (AP)

BlackBerry service restored: That's according to Research In Motion co-CEO Mike Lazaridis. The system has been on the fritz for more than a day. (CNNMoney)

Slovakia approves bailout plan: Crisis averted with all 17 euro-zone nations signing off on the expansion of a fund that will somehow aid in the Greek debt situation.

Insider sentencing: Hedge fund billionaire Raj Rajaratnam will serve 11 years, the longest-ever prison sentence for insider trading. From DealBook:

Calling him "the modern face of illegal insider trading," prosecutors accused Mr. Rajaratnam of using a corrupt network of well-placed tipsters - including former executives of Intel, I.B.M. and the consulting firm McKinsey & Company - to illicitly gain about $64 million. The 11-year sentence was near the low end of the range of roughly 19 to 24 years requested by the government.

Startups face cash crunch: Lots of new companies were formed recently in Silicon Valley, but they're now struggling to get financing. From the WSJ:

The average valuations of young companies have dropped recently to $3 million to $5 million, from $6 million to $8 million earlier this year, says Naval Ravikant, a Silicon Valley entrepreneur and investor who runs AngelList, a website where young companies can apply to seek "angel" or "seed" money. The start-up financing market "is getting weaker by the week, no question," he says. While AngelList has 50 to 100 start-ups applying for funding daily through its site, only one to two are getting financing, he estimates. "The survivor rate of these companies is way down."

NBA labor talks get mediator: It's the same guy who worked with NFL owners and the players union. He'll meet today with league and union leaders. (NYT)

Blue Shield gives back money: The California-based insurer says it will return $283 million to policyholders in December. From the LAT:

Blue Shield's action comes as insurance companies face the prospect next year of returning millions of dollars collected from policyholders but never spent on healthcare. Under new federal regulations, insurers must spend at least 80% of consumers' premiums on medical care and not reserve that income for administrative costs or profit. But with consumers going to doctors less and often skipping treatment during tough times, insurers may not meet the 80% requirement and be obligated to issue refunds.

Long Beach to ban marijuana dispensaries: The action comes after an appellate court ruled that the city's medical marijuana regulations violate U.S. laws forbidding distribution and sale of the drug. The ruling is being appealed. (Press-Telegram)

October 11, 2011

Assessing economic impact of shortened NBA season

With Laker and Clipper games representing nearly a third of Staples Center's annual bookings, a prolonged lockout would obviously become a big financial deal for AEG, which has a controlling interest in the venue. Losing an entire season seems unlikely, but even assuming that an agreement is reached at the end of the year, you're still looking at 30 canceled games. Blogdowntown's Eric Richardson checked in with economist John Blank on how the numbers pencil out:

Assuming 30 games are lost, and that each would have pulled in roughly 20,000 fans, the lockout would cost Staples Center 600,000 ticketed fans in 2011. That would equal perhaps $30 million in ticket sales, but Blank considers that money--much of which would go toward player salaries and other team expenses--a sunk cost that would not necessarily have gone back into Downtown. Outside the arena, those 600,000 fans might have spent an average of $20 on food and drinks, totaling $12 million. Another $4 million might have gone toward parking, and $6 million may have been spent on concessions inside the arena. That $20 million is then given a 2x multiplier to account for the effect of funds that are re-spent in the Downtown area. That leaves a total number for induced and indirect expenditures outside of ticket sales of $40 million.

These are not huge numbers for an economy as large as L.A.'s. As Matt DeBord notes at his KPCC blog:

There's plenty going on in L.A. at any given time. It's important to remember that in a properly diversified economy, every entertainment option -- from pro sports to fine dining to miniature golf courses to movie theaters -- is competing for consumer dollars. If something goes offline for a while, something else is ready and willing to fill the gap.

And what about the regional sports channels, like Fox Sports West? From the LAT:

"There is probably a lot more at stake at the regional sports network level than the national level," said Chris Bevilacqua, who heads Bevilacqua Media, a sports and media consulting firm. While the networks are protected against a lengthy disruption of games, their ratings and ad revenue will be adversely affected and there will be a scramble to find programming to fill holes left by the loss of the NBA.

Tuesday morning headlines

Stocks slip a bit: This morning it's Slovakia, if you can believe it. The Parliament is balking at an expansion of the Euro Zone's bailout fund, and that could present complications in preventing a Greek default. Dow is down about 20 points.

NBA cancels first two weeks: That's 100 games, and many more could follow if the players and owners don't get serious about a new labor contract. From AP:

The cost of cancellations would be staggering. Deputy Commissioner Adam Silver said the league would lose hundreds of millions of dollars; Hunter estimated players' losses at $350 million for each month they were locked out. Now ushers, security personnel, parking lot attendants, concession workers, restaurant employees and others all stand to have their hours cut or join the country's 14 million unemployed. A few teams also have either trimmed their staffs or instituted sharp pay cuts - some did that as the lockout began - and more layoffs could be forthcoming.

Roski changing course on stadium: The L.A. developer is willing to hand over 600 acres he controls in the City of Industry to any team that relocates there. The team would then finance the stadium and sell Roski a share of the franchise at market rate. This is quite different from AEG's downtown stadium proposal. (LAT)

99 Cents Only Stores finally cuts deal: The Commerce-based retailer is being sold to a group of investors, including its founding family, for $1.6 billion in cash. Under terms of the deal, Ares Management and the Canadian Pension Plan Investment Board will pay $22 a share, 7.3 percent above Monday's closing price. (DealBook)

Villaraigosa donor facing big fines: Koreatown real estate developer Alexander Hugh was indicted by a grand jury on charges of making illegal campaign contributions in 2009. The city Ethics Commission meets today to decide the fine on Hugh - it could be as much as $184,000. Prosecutors said they have no evidence that Villaraigosa knew of Hugh's activities. (LAT)

Carpool lane changes make traffic worse: Booting single-occupant hybrids off HOP lanes increases congestion - including in the HOP lanes, according to a study. (LAT)

Wall Street protesters moving uptown: Plan is to demonstrate in front of the homes of JP Morgan Chase CEO Jamie Dimon, billionaire businessman David Koch, News Corp. CEO Rupert Murdoch and hedge fund investor John Paulson. (Crain's NY Business)

Movie chains object to studio plans: Universal plans to offer "Tower Heist," the upcoming Eddie Murphy-Ben Stiller comedy, on premium video-on-demand just three weeks after it opens in theaters. And as you might guess, the theaters are not happy. From the LAT:

A number of independent theater chains including Sherman Oaks-based Galaxy Theatres, Regency Theatres in Calabasas and Emagine Theatres of Detroit, vowed not to play the movie "Tower Heist" in any of their locations if Universal proceeds with its plans for the early release. Additionally, many small cinema houses representing 50 screens around the country have also refused to book the movie. "We just feel it's a time to draw a line in the sand,'' said Rafe Cohen, president of Galaxy Theatres, which operates 106 screens in California, Washington, Nevada and Texas.

October 7, 2011

Report: NFL not happy with AEG's proposal for football

Hold everything - league commissioner Roger Goodell met in NY last month with L.A. City Councilwoman Jan Perry and an aide to Councilman Bernard Parks, and, according to Yahoo Sports, there is little interest in bringing a team to L.A. under the plan laid out by Anschutz Entertainment Group. Now, this may be some sort of negotiating tactic, but it's worth noting that the league owners will be holding their annual fall meeting in Houston next week and L.A. isn't expected to be a major agenda item. That can't sit well with the folks at AEG, who want to cut a deal with an existing franchise as soon as possible. No team, no stadium. So what's the NFL beefing about? From Yahoo:

What AEG is proposing is a landlord-tenant relationship it has successfully developed with the Los Angeles Lakers, Clippers and Kings. All of those teams play at the Staples Center, which is across the street from the proposed stadium. In essence, AEG sells the tickets, advertising and sponsorship deals for those teams, takes a cut and then pays the teams. The deal works well because none of the teams had the capital to build a Staples-style arena. The NFL, however, is a different beast. Five NFL team executives have said over the past two months that what AEG is asking for is not acceptable for an NFL team. "You're talking about a team being disconnected from season ticketholders and rights holders," another NFC team executive said. "There's no team that will do that and I don't think you can get approval from the rest of the owners for an arrangement like that."

See, NFL owners don't like the idea of giving part of their profits to some third party, whether it's AEG or the city of L.A. (the city would want to make some money on the stadium deal as well). Furthermore, the debt service for building the stadium could eat into profits. Another question: Would any NFL owner be willing to sell AEG a stake in his team at what's likely to be a discounted price? Billionaire Ed Roski had earlier proposed something similar, but Yahoo says he's backed off. All of which could make Roski's City of Industry stadium a better bet.

"If Roski were to put together a favorable package, I think this thing could get done there pretty fast," a league source said. Last Sunday, CBS NFL insider Charley Casserly hinted that Roski's site could be pulling ahead. "What's interesting about that site is that it's a 600-acre site which would be totally devoted to football," Casserly said. "In other words, you'll have plenty of room for the stadium, parking, entertainment, the 'NFL experience.' Sounds like a Super Bowl site to me."

Cautionary note: The NFL is notoriously difficult to read, so there's no telling what the true sentiments might be. But these do seem to be some significant roadblocks.

October 5, 2011

Dodgers fail to persuade bankruptcy judge to expand case

Lawyers for owner Frank McCourt wanted to obtain financial documents from other struggling franchises to prove that the Dodgers were being singled out by Baseball Commissioner Bud Selig. But Judge Kevin Gross said such a fishing expedition "would be more burdensome than is appropriate." He'll issue a formal ruling later in the week, but he didn't expect to reverse an earlier order denying the Dodgers access to other teams. From the LAT:

Dodgers owner Frank McCourt has said for months that he has been held to a double standard by Commissioner Bud Selig, most notably by the rejection of a proposed television contract. Dodgers attorney Sid Levinson said the team should be entitled to see what factors Selig used in approving or rejecting the contracts of other teams in order for the court to determine whether the commissioner treated McCourt in good faith. "What was the commissioner's agenda?" Levinson said.

The real fun starts on Oct. 31 for what's expected to be a weeklong hearing that will include the testimony of both McCourt and Selig. That should provide some indication of who will own the team next year.

Wednesday morning headlines

Stocks waggle around: Looking for direction, as they say. Dow is up about 50 points.

Mixed jobs data: Private employers added 91,000 payroll jobs last month, according to ADP, which was a bit higher than expected. But announced firings jumped more than 200 percent that same month, partly due to planned reductions at Bank of America and in the military. Government numbers for September come out Friday. (Bloomberg)

Greece shut down: Civil servants walked off their jobs today to protest the nation's austerity measures that have resulted in thousands of government layoffs. From AP:

Air traffic controllers joined the 24-hour strike, grounding all flights to and from Greek airports. State hospitals were running on emergency staff, while lawyers, teachers and tax officers also didn't work. Public transport employees were holding work stoppages in the morning and evening, and state television and radio pulled news programs off the air.

European banks facing huge losses: They're holding a ton of Greek debt that undoubtedly is worth less than its face value. From DealBook:

As Europe's debt crisis continues to fester, financial firms exposed to troubled sovereign debt face a brutal fallout. Weaker banks are moving closer to the embrace of their governments. Shares of Dexia -- which held more than 21 billion euros of Greek, Italian, Spanish and Portuguese bonds at the end of last year -- collapsed in recent days. The situation led the Belgian and French governments, three years after originally bailing out Dexia, to guarantee the bank's future financing needs.

NBA preseason canceled: And Commissioner David Stern says that regular season games will be scratched if the impasse with players continues into Monday. Both sides say they're far apart. From the Washington Post:

National Basketball Players Association president Derek Fisher predicted the day before that Tuesday's meeting would be "huge" with regards to saving an 82-game season but told reporters that it "was not the day for us to get this done." "We were not able to get close enough to close the gap," Fisher said. "We find ourselves where we expected to be: a lockout that may jeopardize a part, or our whole season." Union executive director Billy Hunter was asked when the owners and players might convene again and replied: "Maybe a month. Two months. Your guess is as good as mine."

Protesters disrupt OC meeting: A group called ReFund California burst into a Balboa Bay Club ballroom during a meeting of the California Bankers Association and chanted "Make banks pay!" From the LAT:

The bankers listened as protesters accused them of causing the economic meltdown by peddling bad loans, accepting government bailouts and then doing little to compensate for the damage inflicted. Police stood by as protesters were ushered back to West Coast Highway, where members of the Service Employees International Union and the liberal group MoveOn.org chanted, "Shame, shame, shame!" "You've made your point. Now get out," Balboa Bay Club security chief Drew Witthuhn said as the group shuffled out into the rain.

Movie museum coming to LACMA: Location will be the site of the old May Co. store that's now owned by the L.A. County Museum. The Academy of Motion Picture Arts and Sciences has worked out a memorandum of understanding with LACMA, but no details were offered. (The Wrap)

Checks going out to Madoff victims: They better not spend it all in one place: Just $312 million is being paid to 1,230 account holders, which works out to less than a nickel on the dollar. More money is expected to be distributed. (Bloomberg)

Air fares are cheaper than you think: The average airline ticket, adjusted for inflation, has actually fallen 16 percent since 1995, according to government data - and that includes fees. From the WSJ:

The business is capital-intensive, labor-intensive, highly leveraged and fiercely competitive. It is also vulnerable to external shocks, including terrorism, oil-price spikes, waning consumer confidence and high taxes. Even though the industry generates billions of dollars in annual revenue, it rarely is able to cover its huge expenses, much less show a decent return on invested capital.

Disney adds to 3D lineup: After its success with "The Lion King," the Mouse House plans 3D versions of "Finding Nemo," "The Little Mermaid," and other hits. (AFP)

October 3, 2011

Monday morning headlines

Choppy stocks:Greek default worries vs. higher auto sales. For now, Dow is down about 15 points.

Good month for automakers: Well, the economy isn't all bad - GM sales were up 20 percent in September compared with a year earlier and Chrysler was up 27 percent. (Bloomberg)

Factory activity picks up: The widely watched Institute for Supply Management was a little higher in September than in the previous month. But growth remains weak. (Reuters)

The mess in Greece: Once more Athens is on the brink of default. From the NYT:

Two bailouts have not been enough. Greek public debt continues to mount, and so does the pressure on the government to find more revenue and make more cuts. Europe's strategy, to the extent it can be discerned, is to put off restructuring Greece's debt as long as possible and build up enough backing for a bailout fund so that banks with large exposure to the sovereign debt of Greece and other troubled euro-zone countries, like Portugal, Ireland, Italy and Spain, can survive an all-but-inevitable Greek default. But the austerity-driven recession in Greece has made its budget deficit even worse than experts predicted, and the country has not kept all its promises to the "troika" -- the European Union, the International Monetary Fund and the European Central Bank -- that is keeping Athens afloat.

Insurer no longer covers cancer drug:Blue Shield of California is the first major insurance company to end payments for Avastin since a federal advisory committee recommended that the FDA rescind the drug's approval as a treatment for breast cancer. (NYT)

IMG wants to remove Ovitz: The one-time super-agent tried - and failed - to take over the sports management powerhouse, and acting CEO Mike Dolan is so ticked off that he's trying to push Ovitz off the board. (The Wrap)

Protesters still camped out at City Hall: They're mimicking the Wall Street demonstrations, and they plan to stay a while. From the LAT:

Tents and blankets dotted the lawn in front of City Hall on Sunday. Some people stood on the sidewalk holding signs or, in the case of one protester, playing a bagpipe, while others sprawled on blankets in the shade, painting signs, or circling up for impromptu strategy sessions. Passing cars honked in support. Supporters donated necessities such as pizza and portable toilets. The movement takes issue with corporate influence on government and the shift of wealth and political clout toward the richest 1% of the population. Many protesters carried signs with variations on the slogan "We are the 99%."

Jamie McCourt unloads home: Sale price of the 8,400-square-foot Holmby Hills property is $6.5 million, about what she and Frank McCourt paid in 2004. The estranged couple's main residence is next door: a 20,000 square-foot Palladian-style villa that they bought for $25 million. (LAT)

No break in NBA lockout: After a weekend of talks, the players and the league will meet again today and Tuesday. But it looks doubtful that the regular season will be starting on Nov. 1. (Boston Globe)

Impact of Santa Monica Airport: The facility boosts economic output by $275.2 million and supports nearly 1,500 full- and part-time jobs, according to a new report. Some nearby residents don't think it's so wonderful. (Daily Press)

September 30, 2011

Kobe's Italian play is in jeopardy

Now the LAT reports chatter about scheduling conflicts of some kind. Apparently the Italian basketball league Legabasket had the nerve to reject schedule adjustments for the sake of Bryant being able to play 10 games for Vurtus Bologna within a specified period. Amid all this hubbub, the bigger question is why play at all? Why run the risk of serious injury, why make such outrageous pay demands ($3 million), and why not show solidarity with lesser players who don't have such attractive offers?

Friday morning headlines

Stocks bouncing around: This is the final day of the quarter, so you should expect a bumpy ride. At last check, Dow was down 20.

Consumer mood improves: No longer horrible - just miserable. The Thomson Reuters/University of Michigan index is at 59.4, up from 57.8 earlier in the month. The index finished at 55.7 in August. (Reuters)

Outrage over B of A's debit card fee: And switching to another bank may not be the answer because other institutions are likely to impose a fee as well. This is the result of Congress capping the debit fees charged to retailers. From The Atlantic:

The only thing surprising about this news is that Congress was so blind to reality that they expected anything different. Did they really believe that banks would just shrug when their revenues declined by billions of dollars? Since they can't get as much money from customers indirectly through debit interchange fees paid by retailers any longer, they're going the direct route and charging customers for using debit.

Gas prices drop a bit: An average gallon of regular in the L.A. area was $3.875, down about a nickel from last week - and a much slower decline than that of oil. (Auto Club).

Wall Street bearish on Perry: And for all the obvious reasons. From the WSJ:

Some bankers say they would prefer a more moderate candidate, and worry the Texas governor's style and stances on social issues could sink him in the general election. Their unease, along with rules against governors accepting money from certain financial executives, could crimp Mr. Perry's ability to tap into his party's single biggest source of cash. "Wall Street would only really go for him if they thought he could win--and they don't," said Rick Hohlt, a Washington lobbyist and Republican fund-raiser.

Netflix penetration: Stunning stat: More than a third of all Americans ages 13-54 use the movie rental service at least once a month, according to a study. No wonder there's such a fuss over prices. (THR)

Big payday for fired executive: Ousted H-P CEO Léo Apotheker is leaving with $13.2 million in cash and stock. Shareholders should be so lucky: H-P stock lost nearly half its value during his 11-month tenure. (San Jose Mercury News)

Kobe's Italian deal almost set: The Lakers star will be paid $3 million to play about 10 games for the team Virtus Bologna. The contract allows Bryant to return to the Lakers immediately when the lockout ends. (AP)

September 27, 2011

Business Update on KPCC: How to send McCourt on his way

There's no assurance that a bankruptcy judge will agree that the Dodgers should be sold - and there's no assurance team owner Frank McCourt wouldn't try challenging that decision (his only real leverage is that he's still the owner of the Dodgers). Anyway, we kick around those prospects during this week's business chat. Also, a look at how the NBA lockout might unfold over the next few weeks. Available at kpcc.org and podcast (Business Update with Mark Lacter). Transcript is after jump

Continue reading "Business Update on KPCC: How to send McCourt on his way" »

*Brown plans to sign downtown stadium bill

The governor has scheduled a bill-signing ceremony with representatives of Anschutz Entertainment Group, which bought - oops, make that sponsored - legislation that will fast-track any environmental challenges to construction of the stadium. Under the bill, any objection would be filed with the state Court of Appeal and decided within 175 days. From the LAT:

AEG officials said [the bill] would protect the project from protracted litigation and give investors and the NFL important confidence that the project will not be delayed for years. However, some environmentalists oppose SB 292 for giving special treatment to one developer on provisions of a law meant to protect Californians from unreasonable traffic, air pollution and other environmental problems.

No way this wasn't going to go through - not with the prospect of a few thousand temporary construction jobs (never mind that it means zero for the overall economy). It is disappointing to see Brown and Democratic lawmakers provide developers like AEG a special exemption from what any other business in California has to go through. Reform the environmental laws for everybody - not just the bizjocks.

*Brown also extending the same break to other large projects throughout the state. He said it's time for "big ideas and big projects."

September 23, 2011

*Major League Baseball makes push for Dodger sale

The league says that Frank McCourt's plan to hold onto the team is "dead on arrival" and asked a federal bankruptcy judge to bypass his reorganization efforts by ordering the sale of the Dodgers. The idea, it seems, is to accelerate the process so that the franchise can "emerge quickly from bankruptcy under new ownership and with the financial stability necessary to adequately prepare for the 2012 baseball season and beyond." Since he's still the team's titular owner, McCourt would no doubt prefer to delay the proceedings for as long as possible. From the LAT:

The Dodgers asked the court last week to authorize an auction of the team's television rights, the key to McCourt's strategy to emerge from the bankruptcy proceedings as owner. In their filing, the Dodgers said they would try to work with Commissioner Bud Selig but would ask the court to approve a television rights sale even if he would not. "The only path to emergence is through a sale of the Dodgers," the MLB filing reads. McCourt has argued that Commissioner Bud Selig forced the Dodgers into bankruptcy by rejecting a proposed broadcast contract with Fox Sports. In Friday's filing, the league argued that the Dodgers are McCourt's sole significant source of income and that some revenues from any television deal would be diverted toward his personal expenses as well as to his obligations to his ex-wife Jamie, rather than be invested in upgrades to the team and to Dodger Stadium. "The sale proposed in the media rights motion -- the centerpiece of the [Dodgers'] sole reorganization strategy -- is dead on arrival," the filing read.

A hearing is set Oct. 12.

*Here's the MLB motion, via LA Weekly.

September 22, 2011

Report: NBA will postpone training camp, exhibition games

Labor talks between the league and the players ended without much progress, and Yahoo Sports is reporting that the first two weeks of the pre-season will be canceled. The two sides are looking to reconvene next week, but the end of next week will be October and as we saw with the grocer talks, these things seldom move quickly. Even if a deal is reached fairly soon, they'll need a free agency period and then training camp and then a few exhibition games. The first game of the regular season is scheduled for Nov. 1, but that's probably out of reach. From ESPN:

Stern, according to one source, told Hunter in Thursday's meeting the owners want to reduce the players' cut of basketball-related revenue (BRI) to a figure well below 50 percent. The players were guaranteed a minimum of 57 percent of BRI would be spent on salaries at the end of the last agreement. The players union had offered to reduce their percentage to as much as 54 percent in negotiations to accommodate the owners' contention they lost $300 million last season, with the stipulation that a mechanism would be instituted to reward the players if future revenue increased.

My guess is January.

September 19, 2011

L.A. not an especially big town for college football

The local TV market (which also covers OC) has a college football fan base of about 2.6 million, or 17 percent of the population, according to calculations by the NYT's Nate Silver (how does he come up with this stuff?). That compares with 41 percent in Atlanta, 30 percent in Tampa-St. Petersburg, 28 percent in Houston, and 27 percent in Dallas-Fort Worth. (Birmingham, Alabama is at a frighteningly high 85 percent.) Actually, L.A.'s fan base is considerably bigger than other markets in the West, which leads to Silver's other finding: Pac-12 teams, including a powerhouse like Oregon, are not especially popular, based on the number of fans. If you ever wonder why Western teams will sometimes get the short end on polls and such, this could be a good reason.

The Pacific-12 plays plenty of good football, but the low avidity of college football fans in the Western United States means that it's in the second-tier as a television product: only U.S.C. and U.C.L.A. have at least 1 million decided fans each. Despite their strong performance on the field, meanwhile, Washington and Oregon rank outside the top 40 in terms of their fan footprint. And other conference schools, like Oregon State, Stanford and Washington State, do poorly by major-conference standards. As compared to these teams, new additions Colorado (0.5 million fans) and Utah (0.4 million) look tolerable -- but their fan bases are likewise middling by national standards.

fanbase.jpg

As you can see, only USC and UCLA have fan bases in the top 25.

fanbase2.jpg

All of which is a reminder that the L.A. market is vast and diverse - and football, be it college or pro, comprises a relatively small part of the pie.

Fan-unfriendly TV rules something else to look forward to when the NFL returns to L.A.

We got a little taste of it Sunday afternoon when fans watching the closing minutes of the weird-but-exciting Oakland-Buffalo contest were advised that, "Due to contractual obligations, we now leave this game to bring you the start of your next scheduled game after these words from your local station." See, L.A. is considered a secondary market to San Diego, which means that Charger games get priority over any other game - no matter the score. Consequently, KCBS was forced to switch over to the opening minutes of the Chargers-Patriots game. But wait, it gets worse. From the Breeze:

Before the shotgun snap even took place with Bills quarterback Ryan Fitzpatrick calling signals, the swirling CBS logo came up, followed by a commercial for McDonald's sausage McMuffins, one for a cell phone company, another for Nissan, one more for McDonald's extra-value menu, a station promo the "CSI" season premiere, and then an aerial shot of with Jim Nantz proclaiming: "Looking down at Gillette Stadium in Foxboro, Mass. - Chargers, Patriots ... hello friends." Nantz and Phil Simms bantered a bit, sized up the weather conditions, and eventually kickoff occurred. Meanwhile, back in Buffalo...

The NFL's television rules have always been unfriendly to fans, especially the fans in cities that have a team. There's the blackout rule, of course (home games cannot be televised locally if they're not sold out 72 hours prior to its start time), but there's also the no opposing games rule (no other NFL game can air opposite the local club's broadcast). Bottom line: If and when pro football returns to L.A., game selection will be severely restricted - just another future present from the folks at Leiweke & Co.

September 7, 2011

*Are evironmentalists caving in on stadium plan?

The Natural Resources Defense Council sure seems to be. Its senior attorney David Pettit sounded like an AEG sycophant on "Which Way, L.A." last night, pointing out that giving the developer special legal relief for the downtown stadium project was a good idea and that environmentalists need to "bend a little" at a time of high unemployment. Wowser - how that place has changed! What's weird is that a few days earlier Pettit was taking an appropriately aggressive position on the AEG bill (as have other environmental groups). The segment also featured the predictable parroting of AEG's inflated job estimates by State Sen. Alex Padilla, who has been dutifully carrying the developer's water this week. I'm guessing that with the AEG bill more or less a done deal, the NRDC is choosing to get whatever concessions it can and move on. To argue that the region could use some jobs is fine, but as we've pointed out the numbers will likely be way lower than what AEG is touting - and keep in mind these are short-term jobs. There's another issue to consider: It's the idea of making special accommodations to a single, politically-powerful company. Somewhere out there are litigants who have been making their way through the slow-moving appellate process and whose cases will be delayed for goodness knows how long because AEG is being allowed to move to the front of the line. Not fair, not right - and it's happening before our eyes.

*Update: The Assembly just passed the AEG bill by a vote of 59-13. Now it's onto the Senate.

So what about the traffic coming out of downtown stadium?

The city's preliminary deal with Anschutz Entertainment Group is light on the mitigation front, which has some traffic engineers wondering just how the developers plan to keep cars moving after the games. From the LA Weekly:

Robert Shanteau, a California consulting traffic engineer who helped create statewide standards for traffic signals that detect bicycles and motorcycles, is bothered that no City Council member seriously broached the subject of the massive costs to rebuild downtown roads and possibly freeway on-ramps and off-ramps. Those infrastructure needs were left out of both the MOU and the city's key analysis, the so-called "Comprehensive Economic Analysis of the Proposed Downtown Los Angeles Stadium and Convention Center Project." "In working for public agencies," Shanteau says, "I have found it impossible to provide unbiased professional input on a project when the City Council members have already made up their minds they want it."

Presumably, the traffic issue will come up in the environmental impact report that AEG is preparing on the stadium. Thing is, what happens if the mitigations proposed are not deemed adequate? Would the City Council be willing nix the entire project? Doubtful. And what happens if the stadium requires more infrastructure work than AEG is willing to pay for? Does that mean it's on L.A.'s dime? Better not be.

Traffic engineers and environmental leaders say congestion downtown can be expected to worsen drastically, despite rosy depictions by AEG, with "mitigation" around Farmers Field easily costing tens of millions of dollars. Under the city's longtime approach to development, they say AEG won't pay for more than a fraction of that, while taxpayers can expect to pay about 90 percent. And they expect the mitigations to fall short, leaving downtown with permanent new traffic problems. [AEG flak Michael] Roth sees it differently, assuring L.A. Weekly that an extensive traffic study launched by AEG, which he says has long been under way, will show that "we will be OK on traffic."

Quentin Fleming, a consultant who teaches strategic management at USC's Marshall School of Business, was at a June meeting in Mar Vista where Leiweke and an AEG traffic engineer again touted downtown's easy-in/easy-out access. Fleming couldn't believe what he was hearing. "AEG's claim defied reality," he says. "If the stadium is going to be as 'successful' as AEG claims, traffic is going to be a nightmare."

James Moore who handles transportation issues at the Rand Corp., tells the Weekly: "We have no business making the stadium decision without this level of [traffic] analysis in all dimensions."

September 1, 2011

McCourt is offered $1.2 billion for Dodgers

The bid is being led by L.A. Marathon founder Bill Burke and "funded in part by Chinese investors," the LAT is reporting, citing sources. Sounds flaky already. If true, the sale price would set a record for a Major League Baseball team. Nobody is talking.

It also is uncertain whether negotiations with the Burke group -- or any other group -- might explain why McCourt's attorneys have yet to pursue the cable television rights sale that they said would be the key to getting the Dodgers out of bankruptcy court. Bruce Bennett, the Dodgers' lead bankruptcy attorney, had promised to move forward on the issue at an Aug. 16 court hearing but did not do so. Fox Sports has threatened to sue for damages if the Dodgers void the two years remaining on the current cable contract to pursue a new one.

[CUT]

The letter was presented on behalf of the Burke group by Signal Capital Management of New York. The firm has offices in Beijing, according to its website. Shane Rodgers, chairman and chief executive officer of the firm, said in an email that the firm would not comment "on any potential or proposed transactions." The letter did not specify who would finance the Burke bid, other than to say the money would come from "certain state-owned investment institutions of the People's Republic of China" as well as unidentified American investors.

Keep in mind that any sale would have to be approved by Commissioner Bud Selig and the other owners.

August 30, 2011

*AEG accuses Antonovich of conflict of interest over stadium exemption

If you're not making much headway on the basic argument - that you should be exempt from standard legal challenges all other California businesses have to deal with - why not go on the offensive by accusing one of your opponents of a conflict? At issue is a payment dispute between the wife of L.A. County Supervisor Mike Antonovich and an affiliate of stadium developer Anschutz Entertainment Group. Christine Hu Antonovich claims that AEG Business Management Consulting owes her money (her attorney says it's under $200,000) for introducing AEG executives to Chinese officials. From the LAT:

County supervisors Tuesday were scheduled to consider a motion by Antonovich opposing AEG's push in Sacramento to curtail the time period allowed for legal challenges to its $1-billion stadium proposal. But in a letter Monday, AEG lawyer James Sutton said a vote should not be cast until the county's lawyers determine whether Antonovich should be disqualified from participating.

No way to know whether Hu Antonovich is really owed the money (AEG doesn't believe there was a binding agreement for payment), but perception-wise, her relationship with the developer does raise all kinds of red flags. And Antonovich didn't think any of this would come out? Daily News also has the story.

*Update: Antonovich withdrew his motion.

How far along is AEG on stadium project?

Good question. The L.A. Planning Department has been waiting five months for documents from Anschutz Entertainment Group on the proposed facility. So far, nothing. From the OC Register:

Under the EIR process, companies and their consultants must provide studies and other research on a wide range of environmental areas dictated by city officials. Once the EIR is complete, it must be approved by city officials before it is released. Following its release the report is subject to public comment which must be addressed by the company before final approval. [Hadar Plafkin, the Los Angeles Planning Department's environmental review coordinator], said most projects begin filing documents and data with the city shortly after filing a notice of preparation (NOP) with the city. While AEG officials repeatedly have said the project has a tight deadline in order for the stadium to open in time for the 2016 NFL season, Plafkin said his department won't be rushed. "We decide when an EIR will be adequate," Plafkin said. "And it won't release it until we feel it's adequate."

City Councilwoman Jan Perry got into the potential economic benefits of a new stadium on KPCC's Patt Morrison show.

August 29, 2011

New NFL stadium complication: Rose Bowl neighbors aren't interested

The downtown facility only works if developer AEG finds an NFL team willing to relocate to Los Angeles. And that only works if the team, along with AEG, finds a place to play for the three or four years it will take to finish the stadium. Coliseum or Rose Bowl, right? Well, there are problems. AEG doesn't want to negotiate directly with the Coliseum Commission, instead preferring to do a deal with the stadium's chief tenant, USC. And now comes word that residents living near the Rose Bowl want no part of an NFL team. From the Star-News:

"If you bring in 10 NFL games, you really put the neighbors in a tough space," said Lee Zanteson, president of the Linda Vista/Annandale Association. "It degrades the quality of life because you live in a commercial area now. Would you buy a house in a neighborhood where the NFL plays?" Too many events, too much traffic and overuse of the Rose Bowl and the Arroyo area where the stadium rests have made the tony section of town less attractive, Zanteson said.

One group of residents won't be enough to kill a deal. But there are other issues:

The Rose Bowl Operating Company's board, the City Council, UCLA and the Tournament of Roses would have to work in concert to allow a professional football team to temporarily call the Rose Bowl home, [Pasadena City Manager Michael] Beck said. And even if all those parties agree in principle, a potential clash between the NFL schedule and the "Granddaddy of Them All," the Rose Bowl, would create a scheduling nightmare, according to Beck. The time to mark the field with the Rose Bowl and rehash the field for the NFL would make it next to impossible to play an NFL game during the run-up to the annual bowl game. The same issue would surface if the professional team held a home playoff game in the same year that Bowl Championship Series National Championship Game comes to Pasadena, Beck added.

Over and over comes the same basic question: Are all these problems worth the time and expense it would take to bring the NFL back to L.A.? Unless you're AEG, the mayor, the City Council, or a few stray sportswriters, the answer continues to be no.

August 25, 2011

Group relocates 2014 convention because of uncertainty over construction

The Society of Critical Care Medicine would have brought in 5,000 people and filled 1,900 hotel rooms - not a huge meeting, but not chopped liver either. However, the group, which ran into construction issues at a previous convention location, decided to bypass Los Angeles because of the anticipated work at the Convention Center, according to a memo from L.A. Inc. The event will be held in SF instead. AP's Jacob Adelman discovered this additional nugget:

A framework stadium plan approved by the City Council this month requires developer Anschutz Entertainment Group to finish work on the new convention center hall before the existing one is demolished. But [Society of Critical Care Medicine CEO David Martin] said he was told by officials with Los Angeles' convention and visitors bureau, known as LA Inc., that part of the new building would overlap with the existing one, so the latter would have to be removed before the former is built. Martin said he was told that the planned completion time on the new hall would be the end of 2013, which was too close for comfort to the date of his group's convention.

This will not be the last group to cancel a meeting or convention because of the AEG construction.

August 24, 2011

NBA owners keep trying to pretend that their teams are real businesses

They're not, of course, which is why the current push to cut costs - even if it means killing off the upcoming season - doesn't make a whole lot of sense. For all the financial chatter you hear these days from those earnest-sounding NBA honchos, a sports franchise is mainly about ego and power - and maybe just a teensy-weensy bit about profit and loss. Writing for Grantland, Malcolm Gladwell says that in some ways pro teams are like works of art:

Forbes magazine annually estimates the value of every professional franchise, based on standard financial metrics like operating expenses, ticket sales, revenue, and physical assets like stadiums. When sports teams change hands, however, the actual sales price is invariably higher. Forbes valued the Detroit Pistons at $360 million. They just sold for $420 million. Forbes valued the Wizards at $322 million. They just sold for $551 million. Forbes said that the Warriors were worth $363 million. They just sold for $450 million. There are a number of reasons why the Forbes number is consistently too low. The simplest is that Forbes is evaluating franchises strictly as businesses. But they are being bought by people who care passionately about sports -- and the $90 million premium that the Warriors' new owners were willing to pay represents the psychic benefit of owning a sports team.

The owners, Gladwell writes, "are asking us to believe that these 'businesses' lose money. But of course an owner is only losing money if he values the psychic benefits of owning an NBA franchise at zero -- and if you value psychic benefits at zero, then you shouldn't own an NBA franchise in the first place."

August 16, 2011

*Chargers executive pushes back on move to L.A.

Not so fast, says the team's special counsel, Mark Fabiani, who calls AEG's plan to break ground on a downtown stadium by next June "really far-fetched." Fabiani's comments come as San Diego Mayor Jerry Sanders, desperate to keep the team in town, prepares to look for ideas at sports and entertainment districts around the country (seems a touch late, no?). The Union-Tribune called it "his strongest show of support yet for building the Chargers a new football stadium." Fabiani, perhaps trying to temper the speculation about a move to L.A., laid out on the team's Web site all the hurdles faced by AEG over the next 10 months:

(1) The current non-binding Memorandum of Understanding between the developer and the City of Los Angeles must be converted to a real, binding legal contract - which will require significant and time-consuming negotiations.

(2) The developer will have to finish its Environmental Impact Report (EIR), submit that report to the public for review, and then have the report certified by the City. Generally the EIR process on a major project such as this can take as many as 18 months, sometimes even longer.

(3) All of the inevitable court litigation over the EIR will have to be resolved before construction can begin. (Both Los Angeles City and California state officials have said that they will oppose the kind of EIR litigation exemption that Ed Roski received for his City of Industry project.)

(4) The downtown L.A. stadium project may have to survive a public vote, if project opponents succeed in gathering enough signatures to place a measure challenging the stadium project on the ballot.

(5) The developer will have to find an NFL owner willing to sell either some or all of his team at a price acceptable to all parties. (Recent press reports indicate that the L.A. downtown developer wants to be a majority owner of a team).

(6) Whichever team is bought must apply to the NFL to relocate and must satisfy the NFL's relocation guidelines.

(7) The NFL must decide on a relocation fee (a recent L.A. City analyst's report concluded that such a fee could be in the neighborhood of $500 million) and approve the move of a team.

(8) The entire multi-billion dollar project, which envisions not just the construction of a stadium but the replacement of hundreds of thousands of feet of convention space at private expense, must be financed in capital markets that are under enormous stress because of the ongoing world financial crisis.

Now, maybe all of these issues can be resolved over the next 10 months, but the challenge will be a gigantic one by any measure.

Keep in mind that the Chargers and the city of San Diego face enormous financing challenges in trying to build a downtown stadium (which, by the way, also includes plans to upgrade the convention center). The city had been hoping for development dollars, but the state's budget woes makes that unlikely.

*Update: L.A. Mayor Antonio Villaraigosa doesn't think the legislature should give AEG's downtown stadium an exemption from environmental lawsuits. The company's CEO, Tim Leiweke, is asking for protection from frivolous litigation, though no specific legislation has been introduced. (LAT)

August 15, 2011

Promises, promises - AEG is never short of them

Several weeks ago Tim Leiweke & Co., citing a study that AEG itself had commissioned (but never released), said that a downtown stadium and updated convention center would generate $42 million in annual tax revenue for the city - an impressive-sounding number that happens to bear little resemblance with reality. Once you break down the specifics, as AP writer Jacob Adelman did, the revenue number is based on some pretty tall assumptions - that AEG will draw an annual Pac-12 championship, major boxing championships, and of course, Super Bowl after Super Bowl. Some of this might happen, but certainly not all of it. From AP:

The projected 38 events outnumber tallies for comparable venues such as Atlanta's Georgia Dome, which hosts about 33 events each year. Arlington, Texas' Cowboy's Stadium, Glendale, Ariz.'s University of Phoenix Stadium and Indianapolis' Lucas Oil stadium each draw 25 events per year, according to a Metropolitan Research and Economics tally of events at comparable NFL venues released separately by AEG. "Thirty-eight does seem high to me," said Daniel Rascher, president of San Francisco Bay Area-based consultancy SportsEconomics. "It just seems it would be pretty amazing to have that many events in basically a football stadium."

[CUT]

AEG also expects to host a boxing match each year with 50,000 people in attendance, adding $380,625 to government coffers. Fight promoter Roy Englebrecht, who helped form Golden Boy Promotions with boxing champ Oscar De La Hoya, said AEG is unlikely to stage a match with such a crowd even once, let alone every year, unless it virtually gives tickets away. "If you look back in the history of professional boxing in the United States, you could probably put on one hand the number of championship fights that drew 50,000," he said.

Also highly suspect are the number of additional conventions that would come to L.A. with an updated facility. The AEG-paid research says 14; the city's own consulting firm says five. Big difference. Frankly, even five may be pushing it. From LAT columnist Mike Hiltzik:

L.A.'s chief regional competitors (Anaheim, San Diego and San Francisco) are upgrading their own convention centers, so they're likely to maintain their competitive lead over L.A. Also, downtown Los Angeles offers only 1,685 hotel rooms within half a mile of the convention center. In Anaheim and San Diego, the figure is closer to 8,000. In San Francisco, it's 19,000. The marketing challenge for even a spiffy new L.A. convention center "should not be underestimated," the consultants wrote, understatedly.

Folks, this is only the beginning of what is likely to be the incredible shrinking stadium deal.

August 9, 2011

Which NFL team is most likely to come to L.A.?

All the usual suspects have been bandied about for months, but after reading ESPN's breakdown of potential candidates, only three or four would seem to really be in the running. I'm thinking San Diego, Buffalo, and perhaps St. Louis and Minnesota. On the Chargers:

Not only does the proposed stadium in downtown San Diego seem like a long shot, simply getting a public vote on the stadium in 2012, which the Chargers had hoped for, looks unlikely at this point. The Chargers seemingly meet all the requirements to be Los Angeles' next NFL team. AEG wants to buy at least a 30 percent minority interest in the first team that moves into Farmers Field, and [Chargers owner Alex] Spanos seems willing to sell roughly that amount. AEG needs a team to be able to commit to move to Los Angeles by May 2012 and the Chargers can get out of their lease in San Diego between Feb. 1 and May 1. The Chargers already have some history with AEG and Casey Wasserman, who is partnering with AEG on Farmers Field. Two years ago, the Chargers signed a deal with the Wasserman Media Group to help market the team in Los Angeles, and for two years the Chargers held their training camp at the AEG-owned Home Depot Center in Carson.

Oakland and SF are also mentioned as possible contenders, but that doesn't seem likely. By the way, AEG head Tim Leiweke told reporters this afternoon that the construction schedule would be very tight if they want to complete the stadium in time for the 2016 season. "We have no margin for error here," he said. It's worth mentioning that a memorandum of understanding - what the City Council signed off on today - is not the same as a done deal. That won't happen until the environmental review is completed next year.

*Council approves downtown stadium deal

Vote is 12-0. Blogdowntown's Eric Richardson previews what's next in the process.

*Let's not forget Ed Roski's efforts at a stadium in City of Industry. His point man, Majestic Realty's John Semcken, just released this statement:

"Our stadium proposal will generate more money, jobs and long-term success for the region and the NFL. We are more active than ever and are currently working with the league, owners and teams to bring a franchise back to Los Angeles."

Throwing cold water on downtown stadium deal

The City Council will be approving the memorandum of understanding with AEG later today, but all sorts of questions remain about whether the deal makes sense. Former LAT columnist Tim Rutten doubts whether L.A. will ever become a top-tier convention city, even with an upgraded convention center, and there's also the financial aspect of bringing an NFL team to L.A. He was on Madeleine Brand's show this morning.

August 4, 2011

Many more hearings in McCourt divorce case

Not much came out of today's hearing. The question of whether Jamie McCourt owns half the team isn't likely to be ruled on by a Superior Court judge until next year - and even then it might be eclipsed by whatever happens in U.S. Bankruptcy Court. Meanwhile, hearings have been scheduled on Frank McCourt's efforts to reduce monthly support he pays his ex-wife. There's also the matter of $291,252 in past-due property maintenance costs that Jamie McCourt says her husband owes. Ugh. (LAT)

Council committee brushes aside potential conflict in stadium deal

The law firm of Nixon Peabody does a lot of work for the city - and as one of the nation's largest firms, there are bound to be conflicts. That includes its work in analyzing the bond financing portion of the proposed downtown stadium deal. From the LAT:

One is that it represents Regal Cinemas, a tenant of AEG's LA Live entertainment complex, which is near the stadium site. Philip Anschutz, chairman of AEG, is also an investor in Regal, according to city officials. A second conflict involves Nixon Peabody's representation of Anschutz Exploration Corp., another Anschutz company. A third is that a lawyer with the law firm previously worked for Majestic Realty, which is backing a competing stadium plan. Deputy City Atty. Marilyn Garcia said those client relationships would not compromise Nixon Peabody's work on the stadium deal for the city.

Not that any of this much matters. No amount of analysis is likely to upend the bond package with AEG.

July 28, 2011

Downtown stadium plan is all about convention center upgrade

Which is probably what AEG honcho Tim Leiweke had been thinking would happen all along: Dangle the prospect of a rebuilt convention center, and city officials will go along with the football stadium. It's a cynical, but reasonable argument. See my post over at LAO.

July 25, 2011

*New stadium proposal shifts greater share of debt burden to AEG

A draft memorandum of understanding would require the city to issue $195 million worth of bonds, not the $350 million that was first proposed by AEG head Tim Leiweke. The LAT reports that the bonds would be the responsibility of the city's beleaguered general fund, but would be repaid with revenue from the project. A further $80 million in bonds would be the responsibility of AEG. From the Times:

If AEG fails to pay the taxes necessary to cover those bonds payments, the city could foreclose on L.A. Live, said Chief Legislative Analyst Gerry Miller, who co-wrote the report. "Those bonds are not on the city's books, so the developer is 100% on the hook for that," added City Administrative Officer Miguel Santana, L.A.'s top budget official.

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Miller said 27% of the Convention Center project would be paid for from new tax revenue generated by the projects, while 73% would come from various payments made by AEG. The project would provide the city with an estimated $410 million in "net new revenue" over a 30-year period, according to the report. Of that total, $210 million would go to city coffers and $200 million would be used to repay the bonds, Miller said.

I have not seen the draft MOU, but officials are characterizing it as a sweet deal for the city. We'll see. The City Council will hold a day-long hearing about the stadium plan on Friday, though Council President Eric Garcetti told me last week that a vote isn't likely before mid-August.

*The rave reviews are already coming in. This from Maria Elena Durazo, executive secretary-treasurer of the Los Angeles County Federation of Labor:

In our current economy and with the unemployment levels we are experiencing, we need more good jobs. Farmers Field will create more than 30,000 good jobs in construction, tourism and entertainment. We are committed to making this project a reality and are excited about the prospect of putting Angelenos back to work.

**Here's the MOU - happy reading.

July 22, 2011

*McCourt loses round in bankruptcy court

The Dodgers owner cannot use the loan he had arranged to operate the team during the bankruptcy process. Instead, McCourt was ordered to negotiate with Major League Baseball for a loan. The ruling reverses the court's interim approval of the $150 million loan from JP Morgan's Highbridge, From the LAT:

The ruling does not mean McCourt will lose ownership of the Dodgers. Instead, the ruling sets the stage for the parties to argue the core issue in this case: Can McCourt auction the Dodgers' cable television rights to pay off the team's creditors and remain the owner, or can Selig get the court to enforce the league rules to which McCourt agreed, including rules that grant Selig the right to approve all television contracts and the right to strip an owner of his team upon filing for bankruptcy?

*Came across an interesting line from the ruling by Judge Kevin Gross:

It is clear that [Major League Baseball] needs and wants the Dodgers to succeed and the debtors are best serviced by maintaining baseball's good will and contributing to the important and profitable franchise group under the commissioner's leadership.

That can't be great news for McCourt.

July 21, 2011

Garcetti says stadium deal 'keeps getting sweeter and sweeter'

He also told me that the protections being offered by Anschutz Entertainment Group "keep getting stronger and stronger." As Kevin posted on Wednesday, the City Council president has presented a list of principles that he would like to see included in any agreement with AEG, covering areas like signage revenue and repayment of bonds. Garcetti wasn't specific and he certainly didn't seem threatening in the event that some of the principles fell short. Sounds like he's laying out his own political groundwork. "Our consultants look at this and say there are probably only two cities in the country that can get a deal as close to the one they're talking about now - New York and L.A., maybe Chicago," he told me yesterday afternoon, adding that no other developer "would be able to give away anywhere near as much as what they're putting on the table." He said "that's a good indicator that we're negotiating well." Well maybe, maybe not - it'll be many months, even years, before we get an idea of how well the city did. Meantime, Garcetti said that a Council vote probably won't happen until mid-August, a couple of weeks past the deadline set by AEG's Tim Leiweke. But considering where the vote is headed - for better or worse - Leiweke isn't likely to complain.

July 20, 2011

Judge could issue key ruling in Dodger case on Thursday

Lawyers for owner Frank McCourt and Major League Baseball presented arguments in U.S. Bankruptcy Court for why their side should be financing the team during the bankruptcy period. They're saying that this could be an important indicator about how Judge Kevin Gross views the case. Towards the end of today's 10-hour session, Gross said that his ruling will be about dollars and cents, not control. For the MLB side, that apparently was an encouraging comment. (LAT)

July 18, 2011

McCourt calls MLB loan 'deal with the devil'

Frank McCourt calling somebody else the devil? Now that's chutzpah for you - or as Michelle Bachmann would say, shutz-pah. At issue is whether the Dodgers should be financed during its bankruptcy proceedings with a loan arranged by McCourt or a cheaper one being offered by Major League Baseball. A bankruptcy court is set to hear arguments Wednesday, another step in what's likely to be a long and contentious process. From the LAT:

The attorneys for McCourt called the proposed Major League Baseball loan a "deal with the devil" and argued the bankruptcy court has no grounds to impose an MLB loan upon the Dodgers over one McCourt has arranged, even if the league offers better financial terms. "The financing purportedly offered by the commissioner is nothing but a pretext for the commissioner to burden and exert control over the Dodgers in furtherance of the commissioner's ulterior motive of seizing control of the [Dodgers] and ousting Mr. McCourt," the attorneys for McCourt wrote.

Once the loan matter gets settled, the Dodgers will ask the court to approve a sale of the team's cable television rights, a sale that Commissioner Bud Selig has vetoed and which McCourt insists will put him on better financial footing.

July 13, 2011

NFL deal is said to be close - really

They've been saying that for several weeks now, but the Washington Post reports that an agreement in principle could be completed sometime between Friday and next Tuesday, barring further complications. Both sides are meeting today in NY. It's getting close to exhibition season, and the potential loss of some serious money. From the Post:

Talks between the full negotiating teams broke off temporarily last Friday after they stalled over the details of a rookie pay system. The league wants to curb the amount of guaranteed money in the contracts of rookies selected in the first round of the NFL draft. The players side appears willing to agree to some provisions, but has been resisting a system as restrictive as the one the league is seeking.

Other issues remain unsettled. They may include rules for free agency and ongoing court oversight of the agreement, according to people familiar with the talks. But it was not clear if disagreement over any of those issues could cause the talks to unravel if negotiators are able to work out the particulars of a rookie compensation system.

July 7, 2011

McCourt's MLB witch hunt is turned down by bankruptcy judge

Bankruptcy Judge Kevin Gross turned down the Dodger owner's efforts to collect documents in matters ranging from the financial records of the New York Mets to security at Angel Stadium. Lawyers have been trying to prove that Commissioner Bud Selig had it in for McCourt. "This is clearly, in my mind, not an appropriate occasion to turn this hearing into a trial on the commissioner," Gross said. From the LAT:

Gross' ruling sets up a July 20 hearing, at which he will decide whether Dodgers owner Frank McCourt can use his own financing during the bankruptcy process. MLB has offered to extend a loan on better terms -- at a lower rate of interest and without $9.75 million in fees. McCourt argued that he should not be compelled to accept a loan from MLB because the league is "overtly hostile" toward him, and his attorneys claimed that the documents and deposition would be necessary to show how Selig had treated the Dodgers far differently than other teams in financial trouble.

July 1, 2011

Different kind of sports owner

L.A. billionaire Tom Gores, who made his fortune in the private equity business, appears to be treating his newly purchased Detroit Pistons like any other investment. That is, he fired CEO Alan Ostfield and installed two partners from his firm, Bev Hill-based Platinum Equity. Actually, this is pretty standard stuff when a private equity firm takes over. From DealBook:

When a buyout shop, especially a firm like Platinum that specializes in turnaround situations, takes over a company, it comes in, puts a transition team on the ground and radically restructures. It looks to execute a "100-day" plan that deals with the most pressing problems at the company, whether it's weakness in the executive ranks or holes in the company's strategy. From there, a private equity firm carefully monitors the investment on a monthly or quarterly basis. These early and aggressive actions by Mr. Gores underscore the private-equity nature of this deal. What is more, Platinum's $2.75 billion buyout fund invested in the team alongside Mr. Gores's personal funds.

Normally, private equity funds want to make a return on their investment and then sell out after a few years. Given Gores' personal interest - Michigan native and basketball nut - he might hang in there longer than usual. Of course, he and the other owners first have to get past the labor dispute.

June 30, 2011

McCourt nightmare no surprise - LABJ called it in 2004

Please forgive this former Business Journal editor for a bit of bragging from yesteryear: Reporters Danny King and Jonathan Diamond turned up all kinds of red flags about the debt that McCourt was taking on at the time of the Dodger sale. You can't access the piece because of the Business Journal's recently imposed pay wall, but here's the lede from March 1, 2004:

It's the kind of deal that gives hope to the Everyman who has always dreamed of owning a major league sports franchise--especially those who watch late night "no-money-down" infomercials.

And more:

Fox Entertainment Inc.'s $421 million sale of the Los Angeles Dodgers to real estate investor Frank McCourt, finalized last month, isn't really a $421 million sale. The number is actually $371 million because under terms of the deal, Fox, which is controlled by Rupert Murdoch's News Corp., agrees to refund $50 million by Feb. 13, 2006. But that's just for openers. In classic real estate leveraging, the rest of the financing comes through what amounts to a seller-financed deal. The difference is that instead of securing the debt with the property being sold, Fox is looking to McCourt's other real estate holdings, mostly in Boston. It is a lesson in how a motivated seller will do almost anything to unload an asset and a savvy real estate investor may barely dip into his pocket to pay for it. "It's very common in real estate, especially if you're buying from a financial institution," said Jim Thomas, the L.A. real estate developer and investor who owned a majority stake of NBA's Sacramento Kings from 1992 to 1999.

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Ever since reports surfaced that McCourt was interested in purchasing the Dodgers, there have been questions raised about his ability to both finance the deal and operate the ball club, which had a payroll last year of $106 million, fourth highest in the league. In the end, Major League Baseball Commissioner Bud Selig said McCourt was a qualified owner. "The banks were satisfied. We were satisfied," Selig said. "There's no doubt in my mind that he will be a good owner of a very storied franchise."

Even then, there were strong indications that McCourt had violated baseball rules that capped owner debt levels at 40 percent of total assets. Which of course begs the question: Why did Commissioner Bud Selig approve a sale that he had to know was suspect?

Downtown stadium deal all but assured

Councilman Bill Rosendahl has been about the only city official to question the project, and even he seems to be coming on board. "We all want a football team. We all want a stadium. I mean, it's a no-brainer," Rosendahl said this morning during a committee hearing. We all want a stadium? Where did that come from? Oh well, opposition to the plan has been tentative and ill-defined from the start, and the AEG people are determined to bulldoze this thing through - despite obvious concerns about the city's role in financing. (Just curious: Has the city released a line-by-line analysis of the ancillary costs connected with this project - everything from infrastructure needs to the time being spent by city staffers? And where is that money coming from?) AEG head Tim Leiweke wants the city to commit to the plan by July 31 - even though final approval must await completion of an environmental impact report next year. From the City Maven:

"The point of this is not to get a football team," [said Chief Legislative Analyst Gerry Miller]. "The point of this is to leverage a football team and a stadium to generate economic activity and to generate money we don't have today to fix a convention center that has to be fixed. We have to fix it one way or another." That said, Miller cautioned that the facts and figures reported by AEG may not be part of the final negotiated deal. The deal they propose in public (is) not necessarily the deal that (CAO) Miguel (Santana) and I will recommend to you," Miller said.

The one potential roadblock - financing bonds that will be used to construct a replacement of the West Hall - appears to have been resolved, with AEG revising its earlier offer. Instead of pushing the city for $350 million worth of bonds, AEG says the new figure will be in "the high 200s." That reduces L.A.'s potential exposure on the bonds.

June 28, 2011

*Bankruptcy judge grants routine motions to keep Dodgers operating

That includes paying vendors and employees, and keeping up with tax and insurance obligations - pretty standard stuff in the first day of bankruptcy hearings. What seems up in the air (at least according to the news reports I've seen) is which financial package will be chosen to keep the team going over an extended period. Dodgers owner Frank McCourt turned to a hedge fund to provide $150 million in so-called debtor-in-possession financing, but he's paying 10 percent interest, plus fees. MLB says its $150 million bankruptcy loan would save the Dodgers up to $4.5 million and reduces the interest rate by 3 percent. From AP:

After granting several of the motions, [Judge Kevin] Gross ordered a 30-minute recess, allowing time for discussions between attorneys for the Dodgers and MLB, which opposes the team's request for authorization to enter into a $150 million financing arrangement. "It's a foregone conclusion that a loan is going to be approved," said Dodgers attorney Bruce Bennett. "We have to decide which one and on what terms."

*Update: McCourt will be able to use the financing he obtained this week to pay the team's immediate bills, though the league can challenge that during a hearing scheduled for July 20. July 20? Just a small indication of how long this is likely to drag out. (LAT)

Dodgers might sell for a record-setting $1 billion. Really.

Forget about the current scumbag owner - just concentrate on the value of the Dodger brand, the nation's second-largest TV market, and Vin Scully as your play-by-play guy. Also remember that a franchise like this doesn't become available all that often. Actually, it's still not available, but the financial folks who value sports teams are definitely having a look, just in case Frank McCourt or Major League Baseball winds up selling the team. From Bloomberg:

"I wouldn't be surprised if it was $1 billion," said Gordon Saint-Denis, president of Katonah, New York-based Major League Sports Consulting LLC, adding that a sale probably would attract six to eight serious bidders. "It is the Dodgers. It is L.A., where they could put together some serious consortiums of wealthy people in the entertainment industry."

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Charles Baker, a partner with DLA Piper's Global Sports Media and Entertainment Practice, said he's been approached by two parties interested in buying the Dodgers. He declined further comment. Former Dodgers All-Star Orel Hershiser and his ex-teammate Steve Garvey said they would be interested in forming an investment group if the team were for sale; Dallas Mavericks owner Mark Cuban, who bid on the Chicago Cubs and Texas Rangers, told TMZ.com that he might not be interested because it may take too long to untangle the franchise's finances.

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Even with the legal entanglements, former Madison Square Garden President Bob Gutkowski said the Dodgers would attract the interest of anyone wishing to own a professional sports franchise. "It's beachfront property," said Gutkowski, a partner in the New York-based sports consulting firm Innovative Strategic Management.

Earlier this year, Forbes valued the club at $800 million, right behind the Yankees and Red Sox. Frankly, $1 billion sounds like an unlikely price tag, especially since any sale could become entangled in all kinds of litigation that would probably devalue the organization.

Major League Baseball says it's all McCourt's fault

Time to take off the gloves. The league accuses the Dodger owner of siphoning off more than $100 million in club revenue and driving the Dodgers into a liquidity crisis. From AP:

In papers submitted in Delaware bankruptcy court Tuesday, the league objected to the Dodgers' request for authorization to enter into a $150 million financing arrangement with a group of lenders in order to meet cash flow needs, including a Thursday payroll deadline. Commissioner Bud Selig claims in the filing that his office can provide a loan on better terms, and argues that the court should reject McCourt's financing proposal because it compels the team to sell valuable future broadcast rights to meet current expenses and to provide money for McCourt's personal use.

MLB is offering to finance the Dodgers' operations at 7 percent interest, with no fees, which would seem to be a much better deal than what McCourt was stuck agreeing to with another lender. Bankruptcy hearing should be getting underway later this morning.

June 27, 2011

Selig's statement on Dodger bankruptcy

Baseball commissioner says that today's filing "does nothing but inflict further harm to this historic franchise."

The Commissioner's Office has spent the better part of one year working with Mr. McCourt and his representatives on the financial situation of the Los Angeles Dodgers, which was caused by Mr. McCourt's excessive debt and his diversion of club assets for his own personal needs. We have consistently communicated to Mr. McCourt that any potential solution to his problems that contemplates mortgaging the future of the Dodgers franchise to the long-term detriment of the club, its loyal fans and the game of Baseball would not be acceptable.

My goal from the outset has been to ensure that the Dodgers are being operated properly now and will be guided appropriately in the future for their millions of fans. To date, the ideas and proposals that I have been asked to consider have not been consistent with the best interests of Baseball. The action taken today by Mr. McCourt does nothing but inflict further harm to this historic franchise.

McCourt scrapes up enough money to keep going, but it's going to cost him

Guess where the Dodgers owner came up with the $150 million to keep operating? Yep, another loan - at a fairly hefty 10 percent interest rate. McCourt asked at least seven lenders before the Highbridge Capital hedge fund agreed to the financing. From Bloomberg:

The one-year $150 million loan from Highbridge, a New York- based hedge fund, sets interest at the London interbank offered rate, or Libor, plus 7 percent, providing that Libor is no lower than 3 percent, according to a court filing today. The team can draw $60 million initially and $90 million later. Highbridge, which will have first claim on the Dodgers' assets, gets a $4.5 million deferred commitment fee, plus 0.5 percent of the unused part of the loan, payable monthly.

A bankruptcy judge will have to sign off on this debtor-in-possession financing - and you can be sure that Major League Baseball will have something to say about that. The big question is how the filing impacts the Fox television contract - specifically whether the judge is willing to consider the long-term deal even though Major League Baseball turned it down. The bankruptcy code allows all contracts to be revisited, so at the least McCourt has bought some time (and his loan allows him to keep meeting payroll). But the process can often drag out for many months, even years. So it's virtually certain that the club will not be sold this season. Meantime, there's no telling whether Fox will want to do business with McCourt, even if the judge opens the door. The LAT reported last week that Fox would not support McCourt in a bankruptcy filing, though Fox has not said that publicly.

By the way, the Dodgers are being advised by L.A. attorney Bruce Bennett from the law firm Dewey & LeBoeuf. Ironically, Bennett represents a committee of creditors in the Tribune Co. bankruptcy.

Dodgers file for bankruptcy

Looks like a preemptive strike just days before the team was supposedly going to miss payroll and allow Major League Baseball to take over the franchise. Now that the courts are in the picture, Commissioner Bud Selig will not have that option, at least for a while. This morning's filing lists assets of as much as $1 billion and debt of as much as $500 million. Owner Frank McCourt says it's all Selig's fault - specifically, his unwillingness to sign off on the team's lucrative television contract.

"He's turned his back on the Dodgers, treated us differently, and forced us to the point we find ourselves in today," McCourt said in a statement. "I simply cannot allow the commissioner to knowingly and intentionally be in a position to expose the Dodgers to financial risk any longer. It is my hope that the Chapter 11 process will create a fair and constructive environment to get done what we couldn't achieve with the commissioner directly."

McCourt says that the Dodgers have received a commitment for $150 million in financing, which keep operations going for a while. No word on where that money is coming from. And no comment so far from MLB. By the way, there's an interesting list of creditors, ranging from Manny Ramirez and Andruw Jones (owed $21 million and $11 million respectively); Continental Airlines and Bank of America (more than $300,000 each); and the City of Los Angeles ($240,000). (Bloomberg, Dodgers press release)

June 25, 2011

Steve Soboroff steps down as Dodgers vice chairman

The L.A. businessman says that the team's ownership woes make it impossible for him to do the stuff he had been hired to do, which had something to do with improving the fan experience. His hiring, of course, had been a disaster from the start - made all the worse when he opened his mouth in defense of Frank McCourt (and he wasn't even one of McCourt's lawyers). Anyway, the LAT's Steve Dilbeck provides a partial recap:

He chided MLB monitor Tom Schieffer for going into the Dodgers clubhouse his first day on the job to tell the team his work would not affect them, criticized the hours Schieffer kept, and then in the clincher, ripped Schieffer and MLB when he asked for additional stadium security the day after Osama bin Laden was killed and couldn't locate him. Since another team official had reached Schieffer with the request and he approved it within minutes, McCourt had to apologize to MLB. And remember, Soboroff managed to pull all this off his first 2 1/2 weeks on the job.

June 21, 2011

McCourt's lawyer talking lawsuit

Yeah, this thing is going to be messy. Attorney Bob Sacks told the LAT and other news outlets that the Dodger owner would not surrender control of Dodger Stadium and other assets even if Major League Baseball were to put the team up for sale. McCourt split up the Dodger entities into separate business interests that would remain under his control, Sacks said.

"There is the possibility of some fairly acrimonious and extreme litigation going forward, which Frank is hopeful will not occur," Sacks said. "If baseball were to act precipitously against Frank, which has been threatened, then there will be a showdown on that issue."

Only desperate people would go to court in this situation - and McCourt is more than desperate. He's delusional. The Business Insider's Dashiell Bennett lays out the absolute BEST case scenario for McCourt:

He sues MLB and Selig. He holds the parking lots at Dodger Stadium hostage, infuriating the league and fans. He somehow doesn't go broke fighting the years-long legal battle, at the end of which a judge rules that (despite the "best interests of baseball" clause in the MLB Constitution) the league improperly took over his team. He is reinstated as owner. MLB grudgingly allows the TV deal from FOX to go through. Another divorce judge rules that the team he co-owned with his wife in a community property state belongs entirely to him. He pays his wife $100 million and business as usual resumes at Chavez Ravine.

Now even assuming that all those improbable outcomes happen, what has he got left? The Dodgers are still losing games and money. His debt is out of control. He can't get a loan from MLB or a bank. His fans hate him. His players hate him (cause he can't give any of them a raise.) The team continues to flounder under uncertain ownership. Attendance slips even further, driving down the value of everything he owns. Oh, and all other 29 MLB owners hate his guts for embarrassing them, wasting their money, and generally being a pain in the butt. Congrats, you're the king of an angry, disgruntled, and flat broke kingdom.


L.A.'s $14 million annual bill for "self-supporting" convention center

Before anyone signs off on the downtown NFL stadium complex, here's a little reminder of what city promises can cost long-term. As explained by Bloomberg's Chris Palmeri and Andy Fixmer, L.A. still pays $48 million in annual debt service on $417 million in outstanding bonds for the 1985 addition to the Convention Center - the project that was supposed to be self-supporting. Unfortunately, only $34.2 million in taxes are allocated to the center. That $14 million difference is paid by the city's general fund, which is about the last thing the general fund needs to pick up.

The cost came to light as the City Council is being asked to issue more debt for a $1.4 billion football stadium and convention center expansion. Anschutz Entertainment Group Inc., the company controlled by billionaire Philip Anschutz, wants to to tear down part of the convention center to make way for the stadium and build a new addition, paid for with $350 million in bonds sold by the city. "We stand by our commitment that this project will not cost the taxpayers or the city's general fund any money," Michael Roth, a spokesman for the company, said in an e-mail.

Writer D.J. Waldie has his doubts. From the KCET website:

Estimates by AEG's consultants are so rosy (naturally) that the Convention Center's current indebtedness could easily be paid off and the stadium would still make money for the city . . . except no one knows what kind of revenue sharing deal the NFL will extract from AEG to bring a team here or how much AEG will expect the city to backfill AEG's bottom line. And so the real costs to the city cannot be calculated and revenue assumptions are not even guesses.

Don't underestimate the ringleader for this costly and unnecessary project, AEG's Tim Leiweke, though the guy must be getting antsy. His original deadline for getting a deal from the city has long since passed, and now he's talking about a July 31 date for the city to commit to the project. Considering how business gets done at City Hall, that's not much time.

June 20, 2011

*Report: McCourt's Fox deal rejected by Commissioner Bud Selig

That's what the LAT's Bill Shaikin just tweeted. That could set in motion a whole bunch of things, starting with the Dodgers not being able to meet payroll at the end of the month, Major League Baseball taking control of the team, and owner Frank McCourt suing MLB. From LAT:

Selig was said to be aghast over a provision in the divorce settlement that would divert almost half the immediate payment from that television contract for the benefit of the McCourts rather than for the benefit of the Dodgers. After court documents revealed that the McCourts had used more than $100 million from team revenues for personal purposes, baseball officials have asked McCourt to ensure any upfront payments from the Fox contract be used exclusively on the team. The settlement terms announced Friday call for an upfront payment of $385 million, with up to $173.5 million reserved for the McCourts and their attorneys.

The McCourts agreed that their settlement would be "null and void" if Selig rejected the Fox contract. So that, too, is off the table.

*Here's Selig's statement:

"Pursuant to my authority as commissioner, I have informed Los Angeles Dodgers owner Frank McCourt today in a detailed letter that I cannot approve the club's proposed transaction with Fox. This decision was reached after a full and careful consideration of the terms of the proposed transaction and the club's current circumstances. It is my conclusion that this proposed transaction with Fox would not be in the best interests of the Los Angeles Dodgers franchise, the game of baseball and the millions of loyal fans of this historic club.

"Mr. McCourt has been provided with an expansive analysis of my reasons for rejecting this proposed transaction. Critically, the transaction is structured to facilitate the further diversion of Dodgers assets for the personal needs of Mr. McCourt. Given the magnitude of the transaction, such a diversion of assets would have the effect of mortgaging the future of the franchise to the long-term detriment of the club and its fans.

"As I have said before, we owe it to the legion of loyal Dodger fans to ensure that this club is being operated properly now and will be guided appropriately in the future. This transaction would not accomplish these goals."

Edited post

June 17, 2011

Deciphering the McCourt's (sorta) divorce settlement

View more videos at: http://nbclosangeles.com.

Here you have Frank and Jamie being questioned by reporters (via NBC 4) about the agreement that could lead to a settlement later this summer. But first Major League Baseball (aka Bud Selig) must sign off on the team's long-term television deal with Fox, and there's no telling whether that will happen. If Selig does turns down the deal, today's agreement becomes null and void. That probably would lead to Selig seizing the club - and perhaps McCourt suing MLB. Of course, very little about the McCourts is predictable, so let's not jump the gun just yet.

*Report: McCourts reach divorce settlement

LAT is citing sources. No details, but the McCourts and their lawyers are scheduled in Superior Court at this hour to discuss the agreement. The big question, of course, is ownership of the Dodgers.

*LAT's Bill Shaikin tweets that the settlement is contingent on Commissioner Bud Selig's approval of Frank McCourt's TV deal with Fox - and at last check, that was far from a sure thing.

*Here are more details from the LAT on the settlement deal. Still sounds like it comes down to whatever Major League Baseball concludes in its investigation of Dodger finances. That supposedly will be completed next week.

June 13, 2011

Mavs-Heat top Lakers-Celtics in ratings

Well, sort of. Last night's series-ending game was the highest-rated Game 6 in 11 years, including last year's match-up between the Lakers and Celtics. Of course, that series went to a Game 7, which had many more viewers than last night. ABC carried Sunday's overall ratings, another reminder of the power of special event television, even in an Internet age. (Deadline.com)

June 7, 2011

NBC holds onto Olympics

Mildly surprising, given that the king of Olympic coverage, Dick Ebersol, recently left the network and that ESPN was apparently making noises about making a competitive bid. In the end, though, NBC won the auction with a $4.38-billion bid that will extend the network's Olympic reign until 2020. That will cover the 2014 Winter Games in Sochi, Russia; the 2016 Summer Games in Rio de Janeiro; and the next two Olympics after that. Ebersol helped engineer the winning presentation. (NYT)

June 6, 2011

USC stripped of national championship

It's the first time a major college championship has been vacated in major college sports since polling began - all because of the shenanigans connected to former Heisman Trophy winner Reggie Bush. From the BCS announcement (via USA Today):

"The BCS arrangement crowns a national champion, and the BCS games are showcase events for post-season football," executive director Bill Hancock said in a statement. "One of the best ways of ensuring that they remain so is for us to foster full compliance with NCAA rules. Accordingly, in keeping with the NCAA's recent action, USC's appearances are being vacated. This action reflects the scope of the BCS arrangement and is consistent with the NCAA's approach when it subsequently discovers infractions by institutions whose teams have played in NCAA championship events."

May 31, 2011

How did McCourt meet Dodgers payroll?

He drew cash advances on the team's corporate sponsorship deals, ESPN reports, citing three people familiar with the matter. Business owners don't do stuff like that unless they are absolutely desperate (be sure to cash those checks quick, guys!).

Current team sponsors were contacted and offered discounts on their annual bills and luxury box stadium seats in exchange for cash up front, according to two sources. It is not known which sponsors took the offer, or the depth of discount they were given.

Sounds like judgment day is fast approaching - McCourt is still short on the next payroll, coming due in a couple of weeks. Meanwhile, attendance is down almost 200,000 for the season, or 7,013 per game, according to the LAT (though the number of people actually attending the games is down even further). Some of this no doubt relates to the public's dislike of McCourt, but the team's poor showing is perhaps a bigger factor - as are security concerns after the parking lot beating on opening day.

May 25, 2011

*Mike Brown is new Lakers coach

Team will make the announcement later today, ESPN is reporting.

Brown's union with the Lakers came together quickly. An ESPN analyst and the 2008-09 NBA coach of the year, he emerged as the leading candidate for the vacancy created when Phil Jackson retired after a strong face-to-face interview Saturday with Lakers brass including executive vice president of player personnel Jim Buss, ESPN The Magazine's Ric Bucher reported.

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Brown's interview, combined with his track record of success in Cleveland, moved him ahead of the two other candidates the Lakers interviewed, Rick Adelman and Brian Shaw. Shaw, a longtime Lakers assistant under former coach Phil Jackson, had a public endorsement from superstar Kobe Bryant, but Shaw will likely be moving on to another franchise after the hiring of Brown. He is a candidate for the head coaching job in Golden State, though sources say the Warriors want to hire a coach with prior head coaching experience.

*First positive sign of the new hire: LAT's Bill Plaschke t