Newsletter: California Inc.: Do state lawmakers deserve a raise?
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.
The death of Prince last week produced copious coverage. We weighed in with a story about how the pop star fiercely guarded his copyrights in an effort to protect his catalog from the digital shifts in the music industry. That’s why you have to hunt to find Prince’s music on YouTube.
LOOKING AHEAD
Tech stocks: An array of closely followed technology companies will release their quarterly earnings reports this week. Apple, Twitter and EBay will announce results Tuesday, Facebook on Wednesday and LinkedIn on Thursday. Analysts are estimating Apple sales to fall to about $52 billion, down from $75.8 billion in the last quarter, which included the Christmas shopping season. When LinkedIn last reported its earnings, in February, its weak revenue forecast triggered an abrupt drop in tech-stock prices.
Video streaming: Fullscreen, one of YouTube’s biggest video networks, will unveil its subscription-based service Tuesday. The ad-free video-streaming service will be available through Fullscreen’s website and via mobile devices for $4.99 a month. Culver City-based Fullscreen and other multichannel networks, which promote digital stars but are not affiliated with YouTube, are looking for ways to assume greater control of content and find new sources of revenue. Fullscreen has more than 70,000 creators with 600 million subscribers.
Legislator pay: A state panel will meet Wednesday to consider whether to grant pay raises to California lawmakers, who already receive the highest base pay of any state legislators in the country. Their starting salary is $100,113, far above second-place Pennsylvania’s roughly $85,000. The California Citizens Compensation Commission meeting will be held at Sacramento City Hall. Last year, the commission approved a 3% increase in base pay for state legislators and constitutional officers, such as the governor, attorney general and lieutenant governor.
Drug prices: The chief executive of Canadian drugmaker Valeant Pharmaceuticals International, J. Michael Pearson, is expected to testify Wednesday before a congressional committee that’s investigating his company’s drug pricing practices. Pearson, complying with a congressional subpoena, was deposed by the Senate Aging Committee last week during a nine-hour, closed-door meeting. Valeant faces a smorgasbord of problems: falling sales, pressure to cut its drug prices, massive debt, three federal probes of its accounting and pricing practices, and shareholder lawsuits in the U.S. and Canada.
Economic assessment: Federal Reserve policymakers will hold a two-day meeting Tuesday and Wednesday. They are not expected to announce an increase in the Fed’s benchmark interest rate but could signal if one is coming soon. Policymakers have been watching inflation closely as they decide whether the economy is strong enough for another small rate increase. One key indicator will come Thursday when the Commerce Department releases its initial estimate of economic growth in the first quarter. Analysts expect growth slowed from the 1.4% annual pace set in the fourth quarter.
THE AGENDA
Monday’s Business section goes behind the scenes of last week’s decision to boot Andrew Jackson off the front of the $20 bill and replace the former president with abolitionist Harriet Tubman. From the earliest ancient coins, currency has been used to make social and political statements. In the weeks after the assassination of President John F. Kennedy, a grieving nation bombarded the U.S. Mint with requests to create a coin in his memory. Within a month, a law was enacted allowing the mint to expedite a redesign of the half-dollar.
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:
VW buy backs: Volkswagen unveiled a broad plan to help U.S. owners of nearly 500,000 emissions-cheating diesel cars as the company tries to resolve one of the worst scandals in automotive history. But it’s still unknown exactly what help customers will get. The plan proposed by Volkswagen and regulators to U.S. District Judge Charles Breyer would include the company buying back the cars, canceling leases or fixing the cars to meet emissions standards. Separately, VW revealed that its cheating cost it $18.2 billion for 2015 alone — and that’s likely only part of the total bill. The company said it will not be able to release results of an internal probe of its emissions scandal this month as expected.
Uber payout: Uber will pay up to $100 million to drivers who had sought to be classified as employees, settling two lawsuits that posed a threat to the company’s on-demand business model, which relies on independent contractors. The San Francisco ride-hailing company announced it will pay an initial sum of $84 million to some 385,000 drivers to settle cases in California and Massachusetts. Uber, valued at $62.5 billion, said it will pay the drivers an additional $16 million if the company’s valuation reaches 1.5 times its current value after it goes public or gets bought.
Bank on it: Federal financial regulators moved forward last week on new rules for how banks pay their executives. They’re not aimed at addressing the wealth gap or cutting bankers’ multimillion-dollar salaries. Rather, the proposed rules, tied to the Dodd-Frank Wall Street Reform Act of 2010, aim to rein in the kind of excessive risk-taking that helped lead to the financial crisis. The key elements of the proposed rules would apply to the incentive pay of executives and some key employees of all banks, credit unions or wealth-management firms with more than $50 billion in assets. No salary caps, or pay limits, are included.
Blue skies: Two women were removed from a JetBlue Airways plane for reportedly staring at a flight attendant. The leader of a popular rock band was kicked off a Southwest Airlines flight for refusing to pull up his baggy pants. A UC Berkeley student said he was booted from a Southwest flight for speaking Arabic. Examples of passengers being removed from flights have gained increased attention since the Sept. 11, 2001, terrorist attacks. Flight personnel now find themselves focusing more attention on identifying potentially dangerous passengers than on serving drinks and snacks.
Red card: In sports, it’s an asset if you can play multiple positions. If you’re a sporting goods retailer, trying to do it all often ends in defeat. Sport Chalet learned that the hard way, abruptly announcing it was closing all of its 47 stores. The La Cañada Flintridge-based chain spent years battling financial troubles and struggled to keep pace with changing consumer tastes that made for exceptionally fierce competition. As Americans become more health conscious and fitness focused, the sporting goods industry has become increasingly specialized.
WHAT WE’RE READING
Some recent stories from other publications that caught our eye:
Party crashers: Fast Company looks at how the tech industry is crashing Hollywood’s party. Apple, Google, Facebook and Alibaba each are seeking a piece of the entertainment-industry action. “The slow but inevitable fraying of the cable TV bundle has sparked a newly intense battle to win over audiences who have never been more in play,” the magazine says.
Paycheck to paycheck: The Atlantic reveals the secret shame of middle-class Americans: Nearly half would have trouble scraping up $400 in an emergency. “Many of us, it turns out, are living in a more or less continual state of financial peril,” the magazine says.
Hard times: Pity the poor cable guy. Slate reports that as pay-TV companies increasingly turn to contract workers to install their services, those technicians face “brutal hours, low wages and an app that schedules every moment of their lives.”
What’s the buzz: The Hollywood Reporter takes a peek under the hood of BuzzFeed Motion Pictures. Since its founding a couple of years ago, “the 300-person team has become known for churning out viral hits on emerging video platforms, including Snapchat and Facebook, and it now boasts over 3 billion monthly video views.”
Not so sweet: Quartz examines Coca-Cola’s “worst marketing idea since New Coke,” a packaging design that makes it hard to tell which Coke you’re drinking. “This new design twist risks undermining the great work that went into establishing Coke’s distinctive color assignments — including the iconic silver can of Diet Coke.”
SPARE CHANGE
Say what you will about the merits of selling sugar water for a living, at least Coke gave us this commercial. And this one. And, of course, this one.
For the latest money news, go to www.latimes.com/business. Until next time, I’ll see you in the Business section.
