Newsletter: California Inc.: Jay-Z album comes with streaming-service string attached
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.
Financial markets will be keeping an eye this week on developing efforts by Republican lawmakers to repeal and replace Obamacare. The Senate last week released its version of a bill passed by the House, which includes big cuts to Medicaid and the possibility of millions more Americans being uncovered. Republicans say their bill would be an improvement over the Affordable Care Act by lowering premiums and giving states more flexibility.
LOOKING AHEAD
Murdoch deal: Britain’s secretary of state for culture, Karen Bradley, said she will decide by Thursday whether to require additional regulatory scrutiny of the nearly $15-billion bid by Rupert Murdoch’s company, 21st Century Fox, for full control of Sky, the European pay-TV company. Bradley can either approve the controversial transaction or refer it to the Competition and Markets Authority. Some in Britain worry that the deal will give the Murdoch family too much control over media in Britain.
State spending plan: Friday is the deadline for Gov. Jerry Brown to enact a budget for 2017-2018. The governor is considering a $183-billion budget sent to him by the Legislature, a plan that broadly boosts government spending while continuing the recent effort to build up cash reserves. The budget approved by lawmakers allocates $105.6 billion to healthcare and $74.5 billion to K-12 schools and community colleges,
Minions are back: The yellow, Tic Tac-shaped goofballs return Friday as Universal Pictures and its in-house animation group Illumination Entertainment unleash the computer-animated comedy “Despicable Me 3,” starring Steve Carell, on American theater screens. Analysts are waiting to see the box office returns (estimates sit at $90 million or more) but — spoiler alert -- they will be huge. “Despicable Me 2” opened with $83 million in 2013, followed by the “Minions” spinoff two years later ($115 million).
Bank closing: This is the final week of operation for Banamex USA, the troubled Citigroup banking subsidiary based in Century City. Last year, Citigroup agreed to shut it down after the subsidiary was fined $140 million over its anti-money-laundering systems. Citigroup also agreed in May to pay $97.5 million over Banamex violations of the Bank Secrecy Act. Banamex served customers doing business in Mexico and the U.S. A separate Banamex bank continues to operate in Mexico.
Music for some: Jay-Z, platinum-selling rapper and founder of the brand Roc Nation, will release his new album, “4:44,” on Friday, but some fans are complaining about being left out. The album will be released exclusively on the streaming service Jay-Z co-owns, Tidal, with customers of Sprint getting free access. Sprint is one of the primary investors in Tidal. Jay-Z’s wife, Beyonce, also issued her most recent album, “Lemonade,” as a Tidal exclusive.
THE AGENDA
Monday’s Business section looks at trends on the age-discrimination front. The federal Age Discrimination in Employment Act turns 50 this year — about the age when many American workers begin to encounter the kinds of biases the law was intended to prevent. At this “milestone of middle age,” quipped Victoria Lipnic, acting chair of the U.S. Equal Employment Opportunity Commission, the law is grappling with new forms of age discrimination in the Internet era.
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:
Over at Uber: Travis Kalanick resigned as head of ride-hailing service Uber, just a week into a leave of absence spurred by the death of his mother and meant to quell concerns about his management style amid a torrent of scandals at the company. His ouster was orchestrated by investors, led by the Silicon Valley venture capital firm Benchmark. But some Uber employees immediately started a petition calling on the board of directors to bring Kalanick back.
Housing prices: Los Angeles County’s median home price has reached its highest level ever, real estate firm CoreLogic reported. CoreLogic said the county’s median price in May rose 6.8% from a year earlier to reach $560,500 on sales that jumped 4.8%. But when inflation is figured in, prices have still not reached the level of summer 2007, when home values peaked right before the housing bubble burst and the national economy crashed.
Solar power glut: California is producing so much solar electricity that it’s paying other states to take some of it. Why doesn’t California, a champion of renewable energy, use all the solar power it can generate? The answer, in part, is that the state has achieved dramatic success in increasing renewable energy production. But it also reflects sharp conflicts over the best way to weave these new electricity sources into a system dominated by power generated by fossil fuels.
Tesla in China? Tesla is working with the city of Shanghai to “explore the possibility” of opening a factory in the area. Sales in China generate a hefty chunk of Tesla’s revenue, and moving some manufacturing near those buyers would slash some costs. “While we expect most of our production to remain in the U.S., we do need to establish local factories to ensure affordability for the markets they serve,” a Tesla spokesperson said in a statement.
Investment choices: A former worker for Los Angeles finance giant Capital Group is suing the firm, alleging it violated federal retirement savings rules by pushing workers into its own funds rather than offering investments from outside firms that charge lower fees. Capital Group is the latest of several investment firms that have been targeted by suits claiming that companies push employees into actively managed mutual funds at a time when cheaper, passive funds are a better alternative.
WHAT WE’RE READING
And some recent stories from other publications that caught our eye:
Film fiasco: Just hours before the premiere of the sequel to the Oscar-nominated documentary “Buena Vista Social Club” at this year’s Sundance Film Festival, the producer pulled the new film from the lineup. IndieWire reports that the stunning move developed from a long-simmering feud between filmmaker Lucy Walker and distributor Broad Green Pictures. “‘The Buena Vista Social Club: Adios’ represents what can happen when inexperience and self-interest collide with a top-flight filmmaker,” according to the IndieWire report.
Trump and Bayrock: Bloomberg delves into the shadowy relationship between President Trump and a dormant real-estate development firm, the Bayrock Group. Before he was president, Bayrock put Trump in contact with Russian investors to discuss deals in Moscow. “The company was also a bridge between murky European funding and a number of projects in the U.S. to which the president once lent his name in exchange for handsome fees.”
Protecting planes: With concern over cyberthreats rising, some in the aviation industry want to give real-time warnings to pilots of hacking attempts, reports the Wall Street Journal. “Proponents of alerting see advanced systems on aircraft as being able to identify attempted or successful cyberintrusions, with the data feeding into artificial intelligence features powerful and adaptable enough to automatically respond to the hazard.”
Overtime pay: California and a handful of other states are moving to enact a sweeping reform of worker overtime standards after a federal effort to do so failed, the Orange County Register reports. A California bill would mandate that employers pay overtime to salaried workers earning less than $47,476, beginning in 2018. The Obama administration had tried to implement the same rule nationwide, but a Texas judge blocked it in November.
Food for less: An innovative grocery store in Massachusetts is building its business on selling food that other stores don’t want, reports Fortune. Daily Table, owned by Doug Rauch, takes food that is either excess inventory at other stores or is fast approaching its “sell by” date. The approach allows the store to set prices that are much lower than elsewhere. “Rauch aims to solve two of America’s biggest food problems: wasted food and access to affordable nutrition.”
SPARE CHANGE
The story about Uber giving the heave-ho to founder Travis Kalanick got me thinking about tunes featuring bad bosses. Bob Dylan nailed it with “Maggie’s Farm.” Johnny Paycheck spoke for many with “Take This Job and Shove It.” Dolly Parton paid her dues working “9 to 5.” Then there’s the great Roy Orbison who’s “Working For The Man.”
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.
