Newsletter: California Inc.: Get set for some musical chairs this week at LAX
Welcome to California Inc., the weekly newsletter of the Los Angeles 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.
Wall Street goes back to business Monday after some solid jobs numbers were announced ahead of the weekend. The economy added 211,000 net new jobs in April, up from a downwardly revised 79,000 the previous month that was the weakest showing since last spring. The unemployment rate dropped to 4.4% in April, its lowest level in nearly a decade. The Federal Reserve also signaled confidence in the economy, holding a key interest rate steady while indicating that we remain on track for two more rate hikes this year.
LOOKING AHEAD
New chief: Banc of California gets a new leader this week. Doug Bowers, formerly chief executive of Square 1 Financial in Durham, N.C., will take over as the Orange County lender’s chief executive on Monday. He’ll replace Steven Sugarman, who led the bank through a period of rapid growth but was pushed out in January after months of controversy. Among the issues that raised concerns were bank deals that benefited members of Sugarman’s family.
Takeover talk: Walt Disney Co. will release its second-quarter earnings report Tuesday amid talk that the Burbank company may be a takeover target. Analysts have been speculating that Apple — which is sitting on a quarter-trillion dollars in cash — could make a move on the Mouse House. While neither company is commenting publicly (and such a tie-up is pretty unlikely), the combination would unite some of the world’s most successful brands in technology and entertainment.
First look: On Wednesday, Snap Inc., the Los Angeles company behind the popular app Snapchat, will report its first quarterly financial results since going public in early March. Investors will be looking to see if Snap executives reveal plans to combat Facebook, its biggest rival. The company now has around 2,000 employees and has helped establish L.A. as a vibrant tech hub.
Homeless money: The 50-person panel charged with recommending how L.A. County should spend $355 million a year in new homeless funds will hold its final meeting Wednesday. The committee, formed after voters approved a quarter-cent sales tax in March, must recommend a three-year budget to the board of supervisors. Tentative plans call for spending much of the money on rapid rehousing subsidies and on expanding and improving homeless shelters.
Trading places: Going to Los Angeles International Airport this weekend? Better double-check your flight’s gate or you could end up at the wrong terminal. On Friday, LAX launches what may be the biggest relocation operation in airport history. Delta will be moving its operations from Terminals 5 and 6 to Terminals 2 and 3, requiring 19 other carriers to relocate. The move, expected to be completed by May 17, will put Delta closer to the Tom Bradley International Terminal and its partner airlines.
THE AGENDA
Monday’s Business section delves into the wonky world of network neutrality. At its heart, the concept is simple: Internet service providers should treat all content equally. But “net neutrality” has evolved into a rallying cry for Silicon Valley technology companies, liberals and online free-speech advocates. It’s also now code for government meddling in the vibrant Internet economy.
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:
Healthcare bill: House Republicans narrowly passed legislation to roll back the Affordable Care Act, delivering on a years-long promise despite mounting concerns from patient advocates and medical groups that the legislation would strip protections enjoyed by millions of Americans. The tight vote, 217-213, with all Democrats opposed, underscored the limited appeal of the bill, which passed thanks to last-minute deal-making and the personal intervention of President Trump.
Writers contract: The entertainment industry went back to work after the Writers Guild of America reached a tentative deal for a new contract with the major Hollywood studios. Although the deal still has to be ratified by guild members, the possibility of a strike now sits squarely in the past, much to the relief of those in Hollywood who feared the specter of a work stoppage that would have had widespread impact throughout the business.
Media jitters: A slowdown in advertising spending and a rise in cord cutting by pay-TV customers are giving Wall Street fresh jitters about the health of the television industry. During the first quarter of the year, an estimated 762,000 pay-TV customers unplugged their satellite or cable TV subscriptions — a dramatic acceleration of the cord-cutting trend. At the same time, media companies began struggling to sell their commercial spots.
Retirement plan: A pioneering, California-led effort to create retirement security for low-income workers has been thrown into jeopardy after the U.S. Senate voted to block states from starting programs to automatically enroll millions of people in IRA-type savings plans. The measure, aimed at stopping the fledgling state retirement programs, was sent to President Trump, who has vowed to sign it.
Passenger treatment: If airlines don’t work to fix customer service issues on their own, the government will need to step in, U.S. lawmakers told several airline executives. That bipartisan message — along with sharply worded comments about airlines’ treatment of passengers — came during a hearing before a House committee. Just two days later, controversy flared anew when video emerged of a family with young children being kicked off a Delta flight.
WHAT WE’RE READING
And some recent stories from other publications that caught our eye:
Trump’s trade man: Peter Navarro, President Trump’s leading advisor on trade issues, is a hard-edged UC Irvine business professor who has turned off many of his peers with his abrasive manner and focus on protectionist policies, says Bloomberg. “His positions on trade have led many of his fellow economists to regard him as a traitor to their class.”
Protecting your home: The Wall Street Journal reviews a new type of home security system that, unlike others, doesn’t use cameras or motion detectors. Instead, the Aura system looks for disruptions in the radio waves (such as those from Wi-Fi) that ripple through your home. “This tech, developed over years in the lab, beats old-school motion sensors because a single pair of Aura sensors can spot movement through large swaths of a multistory home.”
Harsh work: Chicken processor Case Farms is one of the most dangerous places to work in the U.S., reports ProPublica. It has built its business “by recruiting some of the world’s most vulnerable immigrants, who endure harsh and at times illegal conditions that few Americans would put up with.” When those workers get hurt, demand better pay or safer conditions, the company uses their immigration status to get rid of them.
Rare diseases: Brian Loew has built a successful website by offering a forum for people to talk about their medical issues, says the Washington Post. Loew’s Inspire.com makes money through advertising and also in an unusual way — drug companies pay for access to users who are afflicted with specific conditions.
TV rivals: With Fox News in disarray after several scandals, a little-known rival may be using the opportunity to expand its conservative political influence, reports the New York Times. Sinclair Broadcasting Group, the largest owner of local television stations, is looking to buy more. Sinclair has used its 173 television stations “to advance a mostly right-leaning agenda since the presidency of George W. Bush.”
SPARE CHANGE
If we can agree (and we do) that this one is the best movie ever about the TV news biz, which one’s second-best? I know a lot of people like this one. I’ve always enjoyed this one. But this one is a good reminder of how important TV news can be, if it just rises to the occasion.
For the latest money news, go to www.latimes.com/business. Mad props to Scott J. Wilson for helping put this thing together.
Until next time, I’ll see you in the Business section.
