Newsletter: California Inc.: So long to the set-top box?
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 stories coming up this week and the highlights of last week.
The week ended on a high note when the Bureau of Labor Statistics announced that employers across a broad spectrum of industries added a net 271,000 new jobs in October — far more than most analysts had forecast. Wall Street types say this increases the likelihood of a rate hike by the Federal Reserve next month. The 5% unemployment rate is the lowest in seven years.
Looking Ahead
Bank-a-palooza: The annual convention of the American Bankers Assn., the nation’s main banking trade group, gets going in earnest Monday morning in downtown Los Angeles. Bankers from across the country will be here to talk about bitcoin, cybersecurity and other issues. They’ll also hear from Richard Cordray, director of the Consumer Financial Protection Bureau, and from Jay Leno, who closes out the event Tuesday afternoon. The shindig takes place at the JW Marriott Hotel at L.A. Live.
NFL meeting: On Wednesday representatives from St. Louis, San Diego and Oakland will try to convince the National Football League not to move their teams to Los Angeles. The St. Louis Rams, San Diego Chargers and Oakland Raiders are all considering a relocation to the Los Angeles market. The cities will give presentations to a joint gathering of the NFL’s Los Angeles, stadium, and finance committees in New York. The current plan calls for a vote of NFL owners on the subject in January.
Short film: The weeklong movie festival AFI Fest will conclude in Los Angeles on Thursday with the world premiere of "The Big Short," the real-life story of four Wall Street outsiders who bet against the big banks ahead of the global financial crisis of the late 2000s. Directed by Adam McKay ("Anchorman") and based on author Michael Lewis' bestseller "The Big Short: Inside the Doomsday Machine," the film will screen at the TCL Chinese Theatre.
New face at Fox: An activist shareholder seeking greater involvement in 21st Century Fox’s affairs is expected to get a seat on the board at the company’s annual meeting Thursday at the Zanuck Theater at Fox Studios. In September, Fox said it had invited Jeffrey W. Ubben, 54, co-founder and chief executive of ValueAct Capital, to fill a newly created seat on its board. Ubben will stand for election at the meeting.
Viacom results: Viacom, which has seen its stock battered this year by investors, releases its earnings on Thursday amid concerns over the future of the cable TV industry. Last week Viacom competitor Time Warner lowered estimates of its 2016 earnings. Viacom, controlled by 92-year-old mogul Sumner Redstone, includes Comedy Central, MTV, VH-1, Nickelodeon and Paramount Pictures. The company acquired a significant minority stake in L.A.-based DigiTour Media in October.
The Agenda
Monday's Business section focuses on set-top cable boxes — arguably one of the least-popular consumer gadgets out there. They could be headed for the technology trash heap. New regulations will break the hold of pay-TV companies in forcing customers to pay monthly fees. A cable trade group says the government is trying to "fix something that isn’t broken." Even so, some providers, including Time Warner Cable, are experimenting with streaming-video apps that would replace the box.
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:
Tesla rival: Faraday Future, a mysterious electric car start-up taking shape in Nissan’s former U.S. sales office in Gardena, said it plans to sell its first vehicle in 2017 and is looking to make a $1-billion investment in a factory. Founded by former Tesla Motors employees, the company said it was eyeing several locations, including California, Georgia, Louisiana and Nevada. The company, which has about 400 employees, sees itself as a rival to Palo Alto electric car company Tesla and has ties to a Chinese billionaire who may be providing funding.
Fresh & Uneasy: When Fresh & Easy was taken over by investor Ronald W. Burkle's Yucaipa Cos. in 2013, it seemed as if the money-losing grocery chain would finally get a chance to turn things around. It didn't happen. Fresh & Easy filed for bankruptcy protection last month for the second time in two years. Stores will be closed by mid-November. Despite efforts to shake up the chain under Burkle, the problems plaguing Fresh & Easy got worse, employees and analysts said.
Trade pact: Details of the sweeping Pacific Rim trade agreement reached last month have been released, setting the stage for what is certain to be a period of intense scrutinizing, spinning and selling before the contentious deal comes up for a final vote in Congress as soon as early next year. The text of the Trans-Pacific Partnership lists thousands of tariff items that will go to zero or be reduced, including such sensitive products as rice, dairy and sugar. Its 30 chapters spell out uniform rules on intellectual property, labor rights, the environment and other areas of international commerce.
Bitter battle: It's a bitter legal fight between the sweetest of enemies. The sugar industry took to a Los Angeles federal courtroom last week and accused high fructose corn syrup producers of falsely claiming that their product is just as healthful as sugar. Corn syrup producers hit back, arguing that the sugar industry has long engaged in an unsavory campaign of misinformation. The false advertising spat pits two sweeteners that have each been blamed for contributing to a host of ailments, including diabetes, obesity and tooth decay.
Register bid: The opening salvo in a potential war for the Orange County Register was launched in Bankruptcy Court, with an attorney for the owner of the Los Angeles Times calling for an “open sale process” for the rival, struggling newspaper. The move could set up a contest for Register owner Freedom Communications between Tribune Publishing and a management-led, local ownership group that already has expressed desire to buy the company out of bankruptcy. Tribune signaled its interest by offering $3 million in the form of a refundable deposit to finance Freedom’s operations during bankruptcy.
What We're Reading
And some recent stories from other publications that caught our eye:
YouTube Red: Can YouTube be the next Netflix? The Hollywood Reporter delves into YouTube Red, the site’s new premium service that ditches ads in return for a subscription of $10 a month. To compete with the likes of Netflix, YouTube will have to pay big licensing fees for content. “The cost of licensing only goes up in a seller's market,” says the trade publication.
Slimmer Wall St.? Politico observes that pressure to change is having an impact on Wall Street. Financial firms are downsizing. “Financial reformers say that the shifts on Wall Street reflect both required regulatory changes and a realization on the part of big banks that the political tide is moving swiftly against them.”
School bond: An interesting take from the New York Times about a bond that was intended to pay for preschool for underprivileged children in Utah while also making money for investors. Goldman Sachs pocketed $260,000 from the deal. Now experts are saying the kids involved may have gotten short shrift.
Tech diversity: Medium.com adds to the growing conversation about diversity in the tech world. A former Twitter employee says, "There were moments that caused me to question how and why a company whose product has been used as an agent of revolutionary social change did not reflect the diversity of thought, conversation, and people in its ranks.”
The shallow end: The Daily Beast ponders the state of online journalism — and doesn’t like what it sees. “The Internet has quietly cemented its economy on saying the most extreme thing imaginable as loud as possible, and that economy is seeping into the dialogue of life and politics,” it says.
For the latest money news, go to www.latimes.com/business. Until next time, I'll see you in the Business section.
