Newsletter: California Inc.: A great week to be rich and famous and flying out of LAX
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.
That tailwind Wall Streeters are feeling is Friday’s news that Americans stepped up their shopping last month. The Commerce Department said retail sales increased 0.4%, suggesting consumers are poised to spur faster growth in the April-June quarter after the economy barely expanded in the first three months of the year. Consumer prices rose a modest 0.2% after a 0.3% drop in March.
LOOKING AHEAD
Above the crowd: On Monday, a new terminal aimed at celebrities and wealthy travelers will open at Los Angeles International Airport. The facility will have an exclusive entrance, luxury suites, well-stocked refrigerators, private bathrooms and even daybeds. All that privacy and comfort comes at a steep price: a $7,500 annual membership fee plus $2,700 for each domestic flight or $3,000 for each international flight. The cost covers a posse of up to four people.
Upfront market: The major broadcast networks will unveil their new fall prime-time schedules to advertisers in New York this week in an annual ritual aimed at selling commercial time. Networks sell the bulk of their advertising during the springtime event known as the upfront market. NBC and Fox present their schedules Monday, ESPN, Univision and ABC go Tuesday, Turner Broadcasting and CBS have Wednesday, and the CW finishes things up Thursday.
Net neutrality: On Thursday, the Federal Communications Commission is expected to vote to begin dismantling tough net neutrality rules that the agency enacted in 2015. FCC Chairman Ajit Pai, appointed by President Trump, has made repeal of the rules a top priority. The net neutrality regulations prohibit broadband companies from blocking websites, slowing connection speeds and charging for faster delivery of specific content.
Bank deal: A proposed $142-million settlement of a federal class-action suit against Wells Fargo will go before a San Francisco judge for approval Thursday. The settlement could put an end to nearly a dozen similar cases filed across the country over the bank’s creation of millions of customer accounts without permission. Last week, plaintiffs’ attorneys filed documents saying up to 3.5 million sham accounts may have been created, far more than the 2.1 million originally estimated.
Face huggers: The week’s biggest movie opening is “Alien: Covenant,” which debuts Friday. It’s the latest entry in the long-running Ridley Scott “Alien” franchise and the first since 2012’s “Prometheus.” If it comes close to meeting analysts’ expectations of $50 million in its opening weekend, the xenomorphs will unseat “Guardians of the Galaxy Vol 2” as the top domestic film. A third “Diary of a Wimpy Kid’ movie also arrives this week.
THE AGENDA
Monday’s Business section bites into the rising fortunes of Domino’s Pizza. The pizza-delivery chain had been under siege for its lousy food and mediocre service. Complaints poured in that a Domino’s pizza crust tasted like cardboard and its tomato sauce like ketchup. Now the chain has overhauled its pizza recipe, rooted out poor franchisees and aggressively embraced digital technology.
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:
Oh, Snap! Snap Inc., maker of Snapchat, is at a crossroads. The Los Angeles tech start-up took a pounding from investors after reporting a $2.2-billion loss in its first quarterly earnings report since going public. If Snap follows the path of Facebook, investors who stick with it will see a rebound and be rewarded. But a less encouraging role model would be Twitter, which never recovered from its own early stock drop.
New Sony chief: Sony Pictures Entertainment named veteran media executive Tony Vinciquerra as its chairman and chief executive, replacing Michael Lynton after months of speculation about who would lead the struggling studio. Vinciquerra, 62, best known for his stint atop Fox Networks, will report to Sony Corp. CEO Kazuo Hirai when he takes the job June 1. Lynton had led the studio through a crippling 2014 cyberattack.
TV tie-up: Sinclair Broadcast Group will become a nationwide player with its planned acquisition of Tribune Media and its 42 TV stations, giving it a powerful platform to potentially launch a right-leaning programming service to rival Fox News. Baltimore-based Sinclair, which already is the largest TV station group owner in the U.S. with 139 stations, will gain a presence in L.A. with KTLA and New York with WPIX.
Hospital partnership: Cedars-Sinai and Torrance Memorial hospitals plan to team up to share resources, collaborate on patient care and provide wider access to clinical trials. Under the proposed partnership, the two Los Angeles-area healthcare facilities would keep their separate boards of directors and operate independently under their respective chief executives, each keeping their own employees and making their own staffing decisions.
Retirement plan: Despite a setback in Washington, California leaders say they will push ahead with their plan for a state-run retirement program — a move that sets the stage for a legal battle with businesses, trade groups and possibly federal regulators. Business and investment trade groups have lobbied hard against the state plans, which offer retirement savings accounts to private-sector workers who don’t have access to one through their jobs.
WHAT WE’RE READING
And some recent stories from other publications that caught our eye:
Shiver me timbers: The Hollywood Reporter takes an unsparing look at Johnny Depp and his “missing” millions. The star’s legal battle “has laid bare tumultuous finances, outrageous spending and troubling behavior on Disney’s new ‘Pirates’ movie in a case that could even change how the industry does business.”
Brexit fallout: The United Kingdom’s upcoming exit from the European Union is likely to imperil London’s position as the banker to the planet, the New York Times reports. Without the direct financial connections that membership in the EU facilitates, London “is likely to surrender stature to European competitors exploiting Brexit as an opportunity to capture spoils.”
Low-cost housing: The U.S. government’s primary program for developing housing for the poor is building less and costing more, an investigation by NPR and PBS’ Frontline found. The low-income housing tax credit program, created 30 years ago, is supposed to encourage private builders to construct low-cost residential units. But there’s little accounting of where the money is going.
Ghost ships: Vessels that sank long ago and settled on the ocean floor are disappearing, reports Outside Online. Illegal salvagers are pulling up every scrap piece of metal from ships that have been lying on the sea’s bottom for decades, including some warships sunk during World War II battles in the Pacific. “A recovered destroyer can easily result in a profit of $100,000.”
Pricing by algorithm: First, airlines and online retailers started using artificial intelligence software to change prices repeatedly throughout the day. Now even gas stations are doing it, the Wall Street Journal reports. “These new systems crunch mountains of historical and real-time data to predict how customers and competitors will react to any price change under different scenarios.”
SPARE CHANGE
That Johnny Depp story raises an important question: Best pirate movie? Sure, Depp’s first outing as Captain Jack was great fun (with the unending sequels considerably less so). No one buckled swashes like Errol Flynn. Dustin Hoffman made a fine pirate in an otherwise uneven visit to Neverland. But the best pirate movie, hands down, is the one where we learned the value of Bonetti’s Defense and Capa Ferro.
For the latest money news, go to www.latimes.com/business. Mad props to Scott J. Wilson for helping put this thing together.
Until next time, I’ll see you in the Business section.
