Newsletter: California Inc.: Want to be in the drone biz? Pass this test
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.
Pharmaceutical company Mylan is still in the news after hiking the price of life-saving EpiPens by more than 400%. But keep this in mind: Of roughly $250 million raised for and against 17 ballot measures coming before California voters in November, more than a quarter of that amount — about $70 million — has been contributed by deep-pocketed drug companies to defeat the Drug Price Relief Act, which would limit drug prices charged to state healthcare programs. Spending on the measure could set a state record over coming weeks.
LOOKING AHEAD
No buzz kill: New federal rules for small commercial drones go into effect Monday. Among the changes, commercial operators will no longer need to get a pilot’s license to fly a drone — they’ll just need to pass an aeronautical knowledge test and clear a background check by the Transportation Security Administration. To pass the FAA-administered test, drone operators must be able to read aeronautical charts, understand and decipher aviation weather reports and understand the new operational rules. It will cost about $150 to take the test.
Cannabis confabs: The state Water Resources Control Board kicks off a monthlong meander through California cannabis country Wednesday, with a meeting in the Mendocino County seat, Ukiah. The agency wants to talk to cultivators about its permit process that will govern waste discharge, erosion and other water-quality issues. Officials will hit Humboldt the next day, meeting in Eureka. (Try not to giggle, but the next stop is Sept. 7, in Weed.)
Retirement proposal: A bill that would create state-run retirement accounts for millions of private-sector workers in California was passed by the state Assembly last week. This week, it will head back to the state Senate and likely to the desk of Gov. Jerry Brown. Senate Bill 1234 would create the California Secure Choice Retirement Plan, which would offer individual retirement accounts to most California workers whose employers do not already offer a retirement plan. If Brown signs the bill, the program would launch early next year, though it might take months more for workers to begin enrolling.
New Fox CEO: Stacey Snider will take over as chairwoman and chief executive of 20th Century Fox Film on Thursday. Snider, whose elevation was announced in June, had originally been expected to replace outgoing studio chief Jim Gianopulos in June 2017 after his current contract expires. But Gianopulos announced last week that he was stepping down at the end of August. The transition comes as 21st Century Fox CEO James Murdoch and Executive Chairman Lachlan Murdoch move to put their stamp on the studio. Before she joined Fox in late 2014, Snider was co-chair and chief executive of Steven Spielberg’s DreamWorks Studios.
Labor Day travel: If you plan to fly over the Labor Day holiday, be prepared for huge airport crowds. During the holiday period from Wednesday to Sept. 6, 15.6 million people are expected to fly on U.S.-based airlines, a 4% increase compared with the same period last year, according to a forecast by Airlines for America, a trade group for the nation’s airlines. The increase breaks down to 2.23 million air travelers a day, an increase of 82,000 fliers a day, the trade group said. Los Angeles International Airport will be the second-busiest in the nation (after Atlanta) for the weekend, the trade group forecast.
THE AGENDA
Monday’s Business section looks at what some say is the Next Big Thing on the technology front — energy storage in all its forms, including hydro, thermal and chemical (read batteries). Its supporters not only sing its praises but also tout what they say is its inevitability. “We’re going to have 10 times as much energy storage on the grid by the end of this decade and that is going to impact every facet of the energy industry,” says one industry player. But the electrical grid, as many other hand found, is a harsh taskmaster. Inventor Thomas Edison grappled with storage as far back as the 1880s.
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:
Chinese investment: Los Angeles real estate has long attracted foreign investment, be it from Japan, Canada or South Korea. But no one is building from the ground up the way the Chinese are today. Chinese developers such as Greenland, Oceanwide and Shenzhen Hazens are pouring billions into the city, adding thousands of new residential units in soaring skyscrapers that will fundamentally change the city’s skyline. Since 2014, Chinese developers have been involved in at least seven of 18 land deals downtown in excess of $19 million.
Mexican manufacturing: Despite what you might have heard on the presidential campaign trail, Mexico’s manufacturing surge has not been an unalloyed disaster for American workers. U.S. manufacturing production, it turns out, is rising as well. Factory output has nearly reached its all-time high this year, and is up more than 30% since 2009. Factory jobs are still way off from their peak of more than 19 million in 1979. But they have been climbing slowly since the end of the Great Recession in 2009.
Rate hike? Federal Reserve Chairwoman Janet L. Yellen signaled that an increase in a key interest rate was on the table at the central bank’s next meeting in September but that a hike was far from a sure thing. In her first public comments in two months, Yellen said the economy was improving to the point that policymakers soon could nudge up the benchmark federal funds rate for the first time since December. But she didn’t give a timetable.
New Viacom chief: For Thomas Dooley, securing the job as chief executive of Viacom might be the easy part. Fixing the struggling media company will take more work. The key question is whether someone who has worked within Viacom most of his career — since 1980 — and who is the longtime lieutenant of the ousted chief Philippe Dauman, can stabilize and revitalize a company that has been roiled by months of turmoil.
Successful Games: An unexpected drop in the TV ratings for the Rio Games won’t keep the event from being the financial success that NBC predicted. NBCUniversal took in more than $1.2 billion in advertising sales for its 17 days of coverage across its broadcast network, cable channels and streaming video. Although the network’s average audience of 24.9 million viewers was down 18% from the London Games, NBC said the audience levels guaranteed to advertisers were met through the available ad time NBC had going into the Games.
WHAT WE’RE READING
And some recent stories from other publications that caught our eye:
Deep roots: Property tax is among the most hated of all American levies. But, says the Atlantic, “the origins of the property tax aren’t American at all. It, instead, has roots that date back to Europe’s feudal system.”
Paper tiger: Mutual funds spend more than $300 million every year printing and distributing written reports. So, asks the Wall Street Journal, who wouldn’t want a switch to digital copies? The paper industry for one.
Uber alles: Bloomberg explores the unsettling world of treasure hunters digging up the graves of Nazi soldiers. Some $50 million worth of military memorabilia is sold each year, “and Nazi items fetch a premium.”
Passing Go: FiveThirtyEight rolls the dice on how crowdfunding is driving a nearly $200-million renaissance in board games. “The barrier to entry is much lower, especially with board games,” says one expert. “All you need is a pencil and paper.”
Good eats: Some required reading for foodies from the New Yorker — a look at “the most exclusive restaurant in America,” where the tables are all booked until 2025.
SPARE CHANGE
It’s not easy to pick a favorite food movie — there are many tasty treats to choose from. High on my list would be “Big Night,” “Tampopo” and “Ratatouille,” with a special chef’s-choice award to Monty Python for the Mr. Creosote scene from “The Meaning of Life.” (Fair warning: Naughty bits lurk there.)
For the latest money news, go to www.latimes.com/business. Until next time, I’ll see you in the Business section.
David Lazarus’ column runs Tuesdays and Fridays. He also can be seen daily on KTLA-TV Channel 5 and followed on Twitter @Davidlaz. Send your tips or feedback to david.lazarus@latimes.com.
