Newsletter: California Inc.: A big week for entertainment-industry giants
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.
Wall Street returns to business Monday after some serious mixed news Friday. Employers added a larger-than-expected 200,000 jobs and wage gains accelerated in January to the fastest annual pace since the recovery began. But that didn’t stop the stock market from diving 666 points to close out its worst week in years, apparently amid fears of rising interest rates.
LOOKING AHEAD
Team Mickey: Walt Disney Co. reports first-quarter results for fiscal 2018 on Tuesday. During the quarter, the company announced plans to acquire TV and movie assets from 21st Century Fox for $52.4 billion. The proposed acquisition includes Fox’s 20th Century Fox film division and TV studio, as well as its international and cable TV businesses.
Take off?: SpaceX’s Falcon Heavy rocket is scheduled to launch for the first time next week. It’s a biggie for the Hawthorne company. The new rocket is the world’s most powerful and could mean transport of bigger payloads into space, including satellites, scientific gear and even humans en route to Mars. There are launch windows Tuesday and Wednesday.
Team Fox: 21st Century Fox will report fiscal second-quarter earnings on Wednesday. Analysts will be listening closely after the announcement for insights into Fox’s focus for a post-Disney-deal future. One item of particular interest: The company has locked up TV rights to Thursday night NFL football games through 2022, reportedly for a whopping price of more than $3 billion.
Jobless claims: The Labor Department releases the latest jobless benefit claims on Thursday. The number of people who applied for benefits in late January fell by 1,000 to 230,000, keeping initial U.S. jobless claims near a 45-year low. New unemployment claims have fallen 8% over the last year.
Spruced Goose: The giant white dome that once housed the famed Spruce Goose aircraft but now serves as a cruise terminal is reopening Saturday. Carnival Cruise Line, which occupied half the dome, plans to sail larger ships from Long Beach and expanded its terminal operation to take up the entire 142,000-square-foot facility.
THE AGENDA
Germany was first, shipping the Volkswagen Beetle to the United States in 1949. Japan came next, winning U.S. customers in the 1970s with its small imports. After that, South Korea, with its Hyundais and Kias. Now, it’s China’s turn. Or is it? GAC Motor plans to start selling a gas-powered seven-passenger SUV in the U.S. next year. But Chinese automakers have tried and failed to enter the market before, crippled by sub-par quality, tough safety standards and ill-conceived partnerships.
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:
Healthcare bombshell: Amazon.com, Berkshire Hathaway Inc. and JPMorgan Chase & Co. announced they were joining up to develop technologies to reduce healthcare costs for their roughly 1 million U.S. employees. The move triggered speculation that any solutions could spread throughout the private sector, but some skeptics doubted that high costs were really a problem that technology could solve.
Consumer victory: A federal appeals court ruled that the structure of the Consumer Financial Protection Bureau is constitutional, dealing a blow to opponents of the independent agency created in the aftermath of the financial crisis. The CFPB is run by a sole director who can be removed only for cause, unlike most presidential appointees who can be replaced at will.
Reunification talks: CBS Corp.’s and Viacom Inc.’s boards have formed committees to evaluate a merger. The two media companies, both controlled by the Sumner Redstone family, were one entity until Redstone divided his empire in 2006 in a bid to generate more wealth. But now the companies face steep challenges as consumers migrate to streaming services and other entertainment platforms.
Bursting bubble?: Bitcoin whipsawed investors last week, falling below $8,000 for the first time since November before recovering, as a miserable 2018 continued for cryptocurrencies. Investors are confronting a mounting list of concerns about the industry, including escalating regulation, a record $500-million heist at a Japanese exchange and fears of price manipulation.
Harsh discipline: The Federal Reserve ordered Wells Fargo & Co. to cap its growth and improve its corporate governance for what the regulator called “widespread consumer abuses and other compliance breakdowns,” leading the San Francisco bank to say it would replace four board members. The action by outgoing Fed Chief Janet Yellen stems from the bank’s fake accounts scandal and other consumer abuses.
WHAT WE’RE READING
And some recent articles from other publications that caught our eye:
Harassment story: The Washington Post reports on nine women of color who claim Hollywood manager Vincent Cirrincione preyed on them sexually. “Several said they viewed Cirrincione, who is white, as an important gatekeeper for black actresses in an industry notoriously difficult to break into.” Cirrincione admitted pursuing sexual relationships but denied he sought sexual favors in exchange for representing actresses.
Lack of perspective: The New York Times wonders why there aren’t more female economists, and why relatively few women are studying the dismal science. “Because economics has an outsize influence on public policy, it means that many important debates are likely to be dominated by men’s voices for years to come.”
Get happy: The New Yorker checks out HappyOrNot terminals, which measure customer satisfaction. “HappyOrNot was founded just eight years ago, but its terminals have already been installed in more than a hundred countries and have registered more than 600 million responses — more than the number of online customer ratings ever posted on Amazon, Yelp or TripAdvisor.”
Dishonor system: If you’ve ever considered how easy it might be to fool self-checkout machines you are far from alone. The Atlantic looks at a practice now so pervasive that it’s committed even by customers who would never traditionally shoplift. “Anyone who pays for more than half of their stuff in self checkout is a total moron,” says one Reddit commentator cited in the article.
SPARE CHANGE
From the Wall Street Journal, a moving video about Mexico City’s “Little L.A.,” where undocumented people deported from the United States after growing up in the country — Dreamers — try to acclimate to their new surroundings. They are frequently strangers in a strange land.
For the latest money news, go to www.latimes.com/business. Mad props to Laurence Darmiento and Scott J. Wilson for helping put this thing together.
Until next time, I’ll see you in the Business section.
