Newsletter: California Inc.: Will the weak U.S. box office kill a mega merger of theater chains?
Welcome to California Inc., the weekly newsletter of the L.A. Times Business section.
Here’s a rundown of upcoming stories this week and the highlights of last week.
Sure, we’re all still in the throes of the “Brexit” vote, but you just wouldn’t know it if the U.S. stock market is any measure. Stocks closed near record highs Friday following an encouraging June jobs report. Now let’s see if the market retains its momentum given all the hazards that abound during this particularly tumultuous summer — from domestic violence and weak corporate profits to terrorism and a still-uncertain Chinese economy.
LOOKING AHEAD
Payday loans: Starting Wednesday, Google will no longer accept ads from payday lenders. The Internet search giant announced in May that it would be banning ads for loans that require repayment within 60 days in order to protect its users “from deceptive or harmful financial products,” delivering another blow to an industry under fire from regulators and consumer advocates. Google, a subsidiary of Mountain View, Calif.,-based Alphabet Inc., also said that in the U.S. only it will ban ads for any loans with an annual percentage rate of 36% or higher.
Emmys: Nominations for the 68th Emmy Awards will be announced on Thursday. Anthony Anderson, star of “Black-ish” and Lauren Graham of “Gilmore Girls” will present the nominations from the Wolf Theatre at the Television Academy’s newly opened Saban Media Centre at 8:30 a.m. Pacific time. Voting is done by the academy’s 20,000 members, who are divided into 29 “peer groups” of specialized fields.
Tech IPO: Japan’s Line Corp., the company behind one of Asia’s most popular messaging apps, will offer stock publicly to investors for the first time Thursday. The company is hoping to raise $1.3 billion in an initial public offering split between the New York and Tokyo stock exchanges. The company’s Line app has more than 210 million monthly users. Popular in Japan, Thailand and Taiwan, Line is planning to grow by expanding further into Southeast Asia.
Theater deal: Stockholders in Carmike Cinemas Inc. are scheduled to vote Friday on a takeover offer by AMC Entertainment Holdings Inc. AMC agreed in March to buy Carmike for $30 a share in a deal that was valued at $1.1 billion, including the assumption of Carmike’s debt. But on June 30, AMC Chief Executive Adam Aron said the deal is now in doubt, partly because of “the considerable weakening of the industrywide movie box office.” The merger would create the nation’s largest movie theater chain.
Rocket mission: Hawthorne-based SpaceX is scheduled to launch a rocket carrying supplies bound for the International Space Station on Sunday at 9:45 p.m. Pacific time. Among the almost 4,900 pounds of supplies, equipment and scientific research materials is the first of two international docking adapters, which will allow spacecraft to dock to the station when transporting astronauts as part of NASA’s Commercial Crew program. The rocket will launch from Cape Canaveral Air Force Station in Florida.
THE AGENDA
A rumble shakes the air as two British F-35 fighter jets take a low approach and circle a landing strip. Nearby, a U.S. Air Force F-35 roars down another runway, only to decelerate rapidly. Moments later, an Air Force F-35 takes off, afterburner blazing. Monday’s Business section heads up to a Mojave Desert test site to check out progress on the nation’s most expensive weapons program ever: the F-35, projected to cost $379 billion once all 3,000 planes are delivered to the U.S and allied air forces. The program supports an estimated 10,000 jobs in the Southland.
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:
Job growth: A government report showing job growth of 287,000 jobs last month — following revised gains of just 11,000 in May — is expected to bolster confidence among employers and Federal Reserve policymakers that the expansion in the labor market and the broader economy remain on track. But analysts said it would not be enough to push the Fed to raise interest rates later this month, given the increased risks created by Britain’s surprising vote to leave the European Union.
Electricity costs: Southern California Edison warned that if regulators overturn a settlement agreement related to the shuttered San Onofre nuclear plant, California electricity consumers could face higher costs. The utility’s argument, in a filing with the California Public Utilities Commission, was its first detailed response to an order that could lead to full reconsideration of the settlement. The deal left consumers on the hook for $3.3 billion to permanently close the nuclear plant in 2013.
Fly to Havana: Scheduled commercial airline service to Cuba from 10 U.S. cities — including Los Angeles — has won tentative U.S. government approval. Eight U.S. airlines are expected to begin round-trip service as early as this fall between the United States and the Cuban capital, Transportation Secretary Anthony Foxx said. It has been more than 50 years since the last scheduled air service from the U.S. to the island nation.
Tesla crash: Federal investigators are looking into whether Tesla Motors’ autopilot feature was engaged during a nonfatal crash — the second inquiry by the National Highway Traffic Safety Administration into the automaker’s self-driving technology in as many weeks. The wreck involved a Tesla Model X in Pennsylvania. The driver in the crash reportedly told police that he was using Tesla’s assisted driving feature, which helps motorists steer, stay in lanes and drive at the speed of traffic.
Drug fight: A high-priced prostate cancer drug discovered at UCLA is at the center of a multibillion-dollar takeover battle. Several giant pharmaceutical firms are looking to buy San Francisco biotech firm Medivation, which sells the drug Xtandi for about $129,000 a year per patient. Last month, the U.S. government turned down requests from two nonprofit groups to allow other companies to sell the drug at lower prices, ensuring that Medivation would continue to hold its monopoly on Xtandi.
WHAT WE’RE READING
And some recent stories (and a video) from other publications that caught our eye:
Cooling tempers: A Silicon Valley investor thinks he has a way to cut down on shootings by police during traffic stops: An app that launches a Facetime-like conversation between officer and driver. “Exchanging information such as driver’s license and registration over the mobile app, rather than face to face, could keep tensions from escalating during a traffic stop,” says USA Today.
Super PAC: A political action committee called Voters for Hillary appears to have a been a sham to make money, not support Hillary Clinton, reports ProPublica. “Its main effect had been to fuel a sharp spike in the penny stock of a questionable company with close ties to the PAC’s officials.”
Toxic dust: Swirling clouds of coal ash that settle upon a small Oklahoma town illustrate the flaws in the government’s attempts to control the often-toxic byproduct of burning coal for electricity, says the Center for Public Integrity. The plight of Bokoshe, Okla., is “a microcosm of a fierce — some say one-sided — battle over coal ash that has dragged on in Washington’s corridors of power for nearly four decades — and is not over yet.”
Future shocks: After the June 29 death of Alvin Toffler, author of the influential 1970 bestseller “Future Shock,” the New York Times took a look back at the futurist’s predictions. “It seems clear that his diagnosis has largely panned out, with local and global crises arising daily from our collective inability to deal with ever-faster change,” is the conclusion.
Wine and polo: Bloomberg does a video profile of Tom Barrack, the billionaire Los Angeles real estate mogul and co-founder of Rebuilding America Now. The story describes Barrack’s new focus: “He’s applying lessons he learned as a deal maker on Wall Street to a personal asset: his 1,300-acre ranch in California.”
SPARE CHANGE
When an investment company led by L.A. billionaire Alec Gores acquired Hostess Brands, it was the culinary news of the week, even in foodie Los Angeles — home to a super-abundance of quinoa, vegan restaurants and gluten-free cooking. Say what you will, but the Hostess Twinkie — that shelf-stabilized tubular confection of wheat flour, corn syrup and oil — might epitomize 20th century American food technology.
Even haters have to admit the spongy yellow cake has infused itself into our culture. There was Weird Al Yankovic creating a gross Twinkie wiener sandwich in his movie “UHF.” Woody Harrelson’s disappointment in “Zombieland” at finding a load of Sno Balls instead of a Twinkie. (Fair warning: Woody indulges in some adult language.) And, of course, Dan Aykroyd and company in the classic “Ghostbusters” imagining the prospect of a giant malevolent Twinkie.
David Lazarus is on vacation.
For the latest money news, go to www.latimes.com/business.
