Newsletter: California Inc.: It’s a big week for the Beatles (and the iPhone)
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.
Tom Wheeler, head of the Federal Communications Commission, gave cord cutting a big boost with an op-ed piece in the Los Angeles Times proposing a new rule that would require cable and satellite video companies to offer consumers the option to receive their channels through apps that provide streaming video over the Internet. If adopted, consumers will no longer have to rent a set-top box, month after month,” he wrote. Sounds good.
LOOKING AHEAD
Viacom moves on: Media company Viacom’s newly expanded board of directors meets Wednesday, its first extended session since the departure of former Chief Executive Philippe Dauman, who was ousted as part of a settlement last month between Viacom and Sumner Redstone and Shari Redstone. Directors are expected to discuss ways to shore up the company’s balance sheet, including whether to cut the dividend to shareholders or unload a stake in the company’s Hollywood movie studio, Paramount Pictures.
Consumer spending: On Thursday, the Commerce Department will release August retail sales figures, a key indicator of whether consumers are spending freely or being tightfisted with their moolah. Retail sales in July were flat compared with a month before. Last week, the Federal Reserve’s latest “beige book” survey of business conditions indicated that the economy grew at a modest pace this summer in eight of the central bank’s 12 U.S. districts. The findings represent a slowdown.
New flicks: Documentaries on Compaq Computer, the changing finances of higher education and the Beatles debut in L.A. theaters this week. Ron Howard’s “The Beatles: Eight Days a Week — The Touring Years,” to be released Thursday, details the Fab Four’s nearly four years of nonstop touring from 1962 to 1966. “Silicon Cowboys,” which chronicles Compaq’s quest to build a personal computer in the 1980s, and “Starving the Beast,” which looks at the shifting financial philosophies of public universities, both arrive Friday.
Here they come: Apple’s newest iPhones go on sale Friday. The iPhone 7 starts at $649; the iPhone 7 Plus starts at $769. The new phones resemble the iPhone 6S and the iPhone 6S Plus, and will be available with 32GB, 128GB and 256GB of storage. The company has added two new colors to the iPhone lineup: a high-gloss jet black and a matte black. The phones will not come with the traditional 3.5-millimeter audio jack. Instead, they’ll feature wired earphones that plug into Apple’s proprietary charging port and an adapter that works with 3.5-mm plugs.
VW deal: Friday is the deadline for owners of Volkswagens with 2-liter diesel engines that cheat on emissions tests to opt out of a $15-billion settlement. U.S. District Judge Charles Breyer has given the settlement preliminary approval, with a final decision expected Oct. 18. Terms call for the German carmaker to spend as much as $10 billion buying back or repairing Volkswagen and Audi 2-liter vehicles and paying owners an additional $5,100 to $10,000 each. As of Aug. 30, only 235 owners had asked to stay out of the settlement and pursue legal action on their own.
THE AGENDA
Monday’s Business section looks at the for-profit college boom that has gone bust. Closures of high-profile schools such as ITT Technical Institute have left thousands of students in limbo while raising questions about the future of an industry that provides vocational, technical and other training. At the same time, the Obama administration is pushing new regulations that would tie student debt limits to job prospects and make it easier for students to have loans forgiven if they were defrauded — with the schools potentially on the hook for the tab.
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:
Bank settlement: Calling it “outrageous” and “a major breach of trust,” local and federal regulators hammered Wells Fargo & Co. for a pervasive culture of aggressive sales goals that pushed thousands of workers to open as many as 2 million accounts that bank customers never wanted. Those practices, first uncovered by the Los Angeles Times in 2013, led to a massive $185-million settlement package. The settlements put to rest a lawsuit filed last year by Los Angeles City Atty. Mike Feuer as well as investigations by two federal regulators.
ITT shuts down: The company that operates the ITT Technical Institute announced that it was permanently closing all its campuses nationwide. It blamed the shutdown on the recent move by the U.S. Education Department to ban ITT from enrolling new students who use federal financial aid. The shutdown will affect about 35,000 students who were preparing for the start of classes this month. It will also cost more than 8,000 employees their jobs.
Back in action: Virgin Galactic’s new spaceship had its first flight test in Mojave, the first since an October 2014 crash that killed one of two test pilots. The test for the new SpaceShipTwo, dubbed VSS Unity at its unveiling in February, was what the Long Beach aerospace startup calls a “captive carry,” in which the spaceship stays attached to its carrier WhiteKnightTwo aircraft for the entire flight. The test flight was led by four test pilots — two in SpaceShipTwo and two on the carrier aircraft.
Uber arbitration: Uber drivers who have banded together to take the ride-hailing company to court now may have to shift strategies and settle for smaller payouts than they had sought. The U.S. 9th Circuit Court of Appeals in San Francisco said drivers who signed up with Uber in 2013 and 2014 must go to arbitration, not the courts, to resolve disputes with the company. The ruling could have an effect on dozens of lawsuits across the nation.
Airbnb diversity: Accused of doing too little to thwart discrimination on its short-term home rental platform, Airbnb announced policy changes that are intended to educate and punish hosts who don’t follow its rules and protect guests. In a 32-page report written by former American Civil Liberties Union director Laura Murphy, Airbnb detailed new policies such as voluntary anti-bias training for those who list their homes on the service, and suspensions for those who violate its code of conduct.
WHAT WE’RE READING
And some recent stories from other publications that caught our eye:
Fall of Theranos: Vanity Fair takes a long look at the decline of biotech start-up Theranos. Its founder, Elizabeth Holmes, “built a corporation based on secrecy in the hope that she could still pull it off. Then, it all fell apart.”
Who owns Anbang? The New York Times goes hunting for the owners of Anbang, a Chinese insurer behind a wave of multibillion-dollar deals. They find “relatives and friends of its politically connected chairman.”
Bad blood: The Washington Post tees off on the increasingly frosty relationship between Big Business and lawmakers. “After years of frustration with partisan gridlock and soured relations with both parties, chief executives of America’s biggest companies have pretty much given up on Washington.”
Rich relations: Bloomberg relates the story of Steven Sugarman, chief executive of Banc of California, which is paying $100 million for naming rights to L.A.’s new soccer stadium. “Sugarman’s brother is a minority investor in the team, marking the latest in a series of deals involving the CEO’s family and associates.”
Face time: This just in from Fast Company: “Though they were born and raised with cellphones, Internet connectivity and social media, both millennial and generation Z employees crave in-person communication in the workplace.”
SPARE CHANGE
So, OK, millennial and gen Z workers may not be the complete social misfits we thought. Still, workplaces are changing and this can be a challenge for managers, as this helpful educational film demonstrates.
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.
