Newsletter: California Inc.: Tech takes off in the Southland
Welcome to California Inc., the weekly newsletter of the L.A. Times Business Section.
I'm Business columnist David Lazarus, and here's a rundown of upcoming stories this week and the highlights of last week.
With a Fed rate hike now in the rear-view mirror, investors are looking this week for proof of the central bank’s economic optimism. They didn’t see it last week when declining oil prices sent a chill through financial markets. We also learned Friday that preliminary data show California employers added just 5,500 net new jobs in November, though there's a fair chance the final figures could be revised upward.
Looking Ahead
Star Wars: Hollywood will be watching early in the week to see if box office returns from "Star Wars: The Force Awakens” sustain themselves and match the sky-high financial expectations. Analysts believe the movie could take in as much as $220 million in ticket sales during its opening weekend in the U.S. and Canada, breaking the record of $209 million set by "Jurassic World." Experts say “The Force Awakens” could eventually bring in $1.5 billion to $2 billion during its global run.
Tracking drones: Own a drone? Time to register it. A new Federal Aviation Administration website for registering unmanned aircraft debuts Monday. Under new rules, those who already have a drone must register it by Feb. 19. People who buy one later must register it before its first outdoor flight. Registration will cost $5 and must be renewed every three years, but the fee will be waived until Jan. 20. The FAA hopes registration will make it make it easier to identify owners and educate amateur aviators following near-collisions with planes and helicopters.
Air pollution: President Obama’s controversial Clean Power Plan, aimed at reducing carbon emissions from coal-fired power plants, is scheduled to go into effect on Tuesday. The plan is designed to reduce carbon emissions at U.S. power plants by 32% as of 2030 while ramping up production from renewable sources like wind and solar. Two dozen states have filed lawsuits to block the Environmental Protection Agency from implementing the plan, though California Gov. Jerry Brown supports it.
Football injuries: Christmas Day brings the debut of “Concussion,” starring Will Smith. It's a film that tackles the hot-button issue of brain injuries in the National Football League. The NFL, which collects about $10 billion in annual revenue, is trying to resolve thousands of concussion-related lawsuits filed by former players. The league has proposed a $1-billion settlement, which some players have challenged in court. The NFL has not commented directly on the film.
The Agenda
Monday's Business section looks at the fast-growing tech scene in Southern California. Virtual reality, connected cars, e-sports, on-demand services — all are becoming important elements of the local economy, and all are poised for rapid growth in 2016 — along with some challenges.
Story Lines
Here are some of the other stories that ran in the Times Business section in recent days that we’re continuing to follow:
New med school: Challenging the status quo in medicine and education, healthcare giant Kaiser Permanente said it plans to establish a medical school in Southern California. The nonprofit health system said it hasn't selected a site yet for the Kaiser Permanente School of Medicine, but classes will begin in 2019. Kaiser will face tough competition from more established and better known medical schools in pursuing top students and faculty members. The Oakland-based company didn't provide details on what it expects to spend in creating the school.
Tighter security: Two weeks after the mass shootings in San Bernardino, Disnelyland and Universal Studios have started using metal detectors to screen guests in addition to other enhanced security measures. Disneyland and Disney California Adventure last week began randomly screening guests using a walk-through metal detector and have increased the number of uniformed officers outside the park. Disneyland officials also said security officers with bomb-sniffing dogs would patrol the resort. Toy guns also have been banned from the park and guests older than 14 can’t wear masks or costumes.
Lion in winter: Sumner Redstone, the ailing 92-year-old executive chairman of Viacom and CBS, is largely confined to his Beverly Hills mansion. Once bustling with activity, the compound is quieter these days. The girlfriends are gone and Redstone, according to a lawsuit, has become “a living ghost.” It's a humbling turn of events for a man who outmaneuvered rivals to build one of the world's largest media empires, including the nation's most-watched TV network, prominent cable channels and movie studio Paramount Pictures.
High gas prices: California's stubbornly high gasoline prices in 2015 resulted from state regulations, trouble with imports and an outage at a major refinery, the oil refining industry told regulators. Speaking to the state Petroleum Market Advisory Committee for the first time since expensive California gasoline brought huge profits to oil refineries this year, representatives of the Western States Petroleum Assn. said the unusually large gap between the state's average price for a gallon of regular gas and the national average involved matters out of the oil refinery industry's control.
He's back: Steven Spielberg is returning to his longtime production home at Universal Pictures. The studio announced a five-year deal with Spielberg's Amblin Partners, a new consortium of companies that includes DreamWorks Studios, Participant Media, Reliance Entertainment and Entertainment One. The newly minted entity, which has more than $300 million in financing lined up, is expected to produce four to seven films a year. Those projects will help bulk up Universal's already robust film slate.
What We’re Reading
And some recent stories from other publications that caught our eye:
Out of this world: The New York Times hits one out of the park with a look at how shell companies are being used to mask high-end home purchases in ritzy Los Angeles neighborhoods. Taking center stage is a rule-breaking Bel-Air residence known as “Starship Enterprise.”
Slave labor: An investigation by the Associated Press finds that supermarkets around the world are selling shrimp peeled by slaves. The workers are Burmese immigrants in Thailand who are forced to work for little or no pay. “The problem is fueled by corruption and complicity among police and authorities,” the AP says.
Against the current: These are challenging times for Yahoo. So, as the Wrap reports, maybe it wasn’t prudent for Chief Executive Marissa Mayer to throw a lavish, Great Gatsby-themed holiday party at San Francisco's Pier 48. Initial reports pegged the cost of the shindig at $7 million, but Yahoo insiders later insisted it was closer to $2 million. Either way, it was some serious coin.
Noteworthy: There are people who collect stamps or butterflies. Then there are those, says the Wall Street Journal, who are in the hunt for dollars with a “fancy” serial number that can be considered a "repeater," a "ladder" or a "flipper." Weird? Not to notaphilists.
Shake, rattle, roll: How does an interest rate hike work? The New York Times gets a gold star for creating a Rube Goldberg machine that brilliantly illustrates the mechanics of higher rates with spare parts, ping pong balls and foam packing peanuts more clearly than any prose.
Spare Change
Not to take anything away from the New York Times' accomplishment, but the Japanese TV show "Pythagora Switch" kind of owns this territory. See for yourself.
For the latest money news, go to www.latimes.com/business. Until next time, I'll see you in the Business section.
