TOP STORIES -- Jan. 2-7

Talent Manager Grey Named Paramount Chief

Viacom Inc.’s co-president, Tom Freston, named talent manager and producer Brad Grey as Paramount Pictures’ chairman and chief executive.

Grey, 47, is set to take over by March 1 for industry veteran Sherry Lansing, who retires after 12 years as chief of the studio.

Grey is being given broad responsibilities over creative and business issues. He will be charged with restoring Paramount’s luster, tarnished by a box-office slump and management upheaval.

Paramount also has been reluctant to gamble on expensive film franchises such as “Harry Potter” that can potentially generate huge profit.

Grey will report directly to Freston.

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Delta to Cut Ticket Prices by Up to 60%

Delta Air Lines Inc. unveiled a stripped-down fare structure that slashed domestic ticket prices by as much as 60% and eliminated the unpopular Saturday night stay-over requirement, moves that benefit travelers but further threaten the troubled airline industry.

The action by the nation’s third-largest airline, which had been expected, is the biggest effort in more than a decade to simplify the industry’s often Byzantine menu of fares.

Atlanta-based Delta capped all coach fares -- including last-minute walk-up prices often bought by business travelers -- at $499 each way. Delta said it also would cap first-class seats at $599 and trim the number of fares it charges.

US Airways and Northwest Airlines Corp. swiftly matched Delta’s reduced fares in selected markets. Other airlines are expected to follow, analysts said.

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Ex-Tenet Exec Pleads Guilty in Referral Case

A former Tenet Healthcare Corp. hospital executive agreed to plead guilty to a single count of criminal conspiracy, the company said, making a deal during her trial on charges that she helped arrange kickbacks to persuade doctors to refer patients to Alvarado Medical Center.

Mina Nazaryan, Alvarado’s physician recruiter, had been indicted on several counts of conspiracy and other crimes and faced the possibility of more than 10 years in prison. With the plea, Nazaryan’s sentence could be five years or fewer, according to experts following the trial in federal court in San Diego.

A spokeswoman for the U.S. attorney’s office declined to say whether Nazaryan would testify against other defendants: Barry Weinbaum, Alvarado’s former chief executive, and the hospital’s parent, Tenet.

Lawyers for Nazaryan and Weinbaum did not return phone calls seeking comment. Tenet said in a statement that the plea would not affect its efforts to defend itself and Weinbaum.

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Payroll Growth for 2004 Totals 2.2 Million Jobs

The nation’s payrolls grew slightly more slowly than expected in December, but last month’s gains pushed the net number of jobs created last year to 2.2 million -- the largest annual increase since 1999, the government said.

Nonfarm payrolls in December increased by 157,000 from November’s results, which were revised higher, the Labor Department reported.

The unemployment rate in December remained virtually unchanged at 5.4%, as did the number of people actively looking for work -- 8 million.

Payroll growth in December was driven primarily by hiring in healthcare and social assistance, professional and business services, wholesale trade and financial activities, the Labor Department said.

Employment in construction and factories remained unchanged last month, while the retail sector cut payrolls in what is normally the busiest sales season of the year.

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Toyota Sales in U.S. Top 2-Million Mark

Toyota Motor Corp. in 2004 became the first import brand to top the 2-million annual sales mark as the domestic auto industry’s hold on American motorists continued to shrink.

Import brands from Asia and Europe accounted for a new high of 41.4% of the cars and light trucks sold in the United States, according to manufacturers’ data.

Asian automakers grabbed a 34.6% share of the market. The domestic brands’ 58.7% share -- a historic low -- was down from 65.6% four years earlier.

Torrance-based Toyota Motor Sales USA sold 2.1 million vehicles, up 10%. The American unit of its fellow Japanese automaker Honda Motor Co. saw sales rise 3.3% for the year to 1.4 million cars and trucks.

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California Proposes HMO Drug Regulations

California regulators proposed prescription drug protections for HMO members, describing the rules as the country’s first to mandate broad coverage of medically necessary treatments.

Although they hailed the thrust of the draft regulations, patient advocates said they feared that vague language could allow health maintenance organizations to raise drug co-payments beyond the reach of many consumers.

HMO representatives said they were still assessing whether the proposed rules preserved the health plans’ ability to charge more for higher-cost drugs when others would do as good a job.

The regulations are intended to ensure that HMOs cover drugs prescribed by doctors for medical conditions, said Cindy Ehnes, director-designate of the state Department of Managed Health Care, which drafted the proposed rules.

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Chinese Oil Firm Said to Be Eyeing Unocal

A Chinese oil company reportedly is considering a $13-billion takeover offer for El Segundo-based Unocal Corp.

If it comes to pass, the deal would be China’s largest acquisition of an American company.

CNOOC Ltd., an arm of China’s state-owned China National Offshore Oil Corp., is mainly interested in Unocal’s exploration and production in Asia, the Financial Times reported on its website.

A Unocal spokesman declined to comment. A spokesman for CNOOC, China’s third-largest oil company, also would not comment.

CNOOC’s interest is at an early stage and no talks have been held, unnamed sources told the Financial Times.

Reuters news service quoted anonymous sources as saying CNOOC was eyeing several foreign oil companies.

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Wal-Mart to Settle California Gun Lawsuit

Wal-Mart Stores Inc. will pay $14.5 million to settle a lawsuit filed by the California attorney general that accuses the giant retailer of a host of gun law violations, state officials said.

The settlement requires Wal-Mart to pay $5 million in fines. Atty. Gen. Bill Lockyer said the deal also called for Wal-Mart, which agreed last year to halt gun sales across California, to reform its practices should it ever resume firearm sales in the state.

Wal-Mart also will spend at least $4.5 million to comply with state and federal laws governing firearm sales. An additional $3 million is earmarked for a public service campaign and for developing a program to encourage California gun dealers to verify buyers’ ages.

A Wal-Mart spokesman declined to comment.

Lockyer’s lawsuit, filed in Sacramento County Superior Court, followed an audit last year of five Wal-Mart stores that uncovered 2,891 alleged violations between 2000 and 2003.

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Resort Hotel Is Planned for Mammoth Lakes

Developers hoping to turn Mammoth Lakes into an upscale ski resort said that construction of the area’s first luxury hotel would begin with the spring snowmelt.

Canadian developer Intrawest Corp. said it would erect a $140-million Westin hotel scheduled to open in the spring of 2007.

The 230-room hotel, dubbed the Westin Monache, would be the largest in town. It is the centerpiece of Intrawest’s planned $1-billion makeover of Mammoth.

Company and city officials in the Eastern Sierra town of 7,500 hope that the hotel will attract guests who will stay longer than just a weekend.

The Westin will be built in the Village at Mammoth, an upscale collection of lodging, shops and restaurants.

Intrawest will manage the hotel as a Westin franchise, but the units will be owned by individual investors as condominiums. Prices are expected to range from the low $300,000s to more than $1 million.

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Krispy Kreme to Revise Earnings Lower for 2004

Krispy Kreme’s stunning decline grew even worse when the company said it planned to revise downward its fiscal 2004 profit to correct errors in how it accounted for payments to franchisees in Northern California and Michigan.

Krispy Kreme Doughnuts Inc. said the earnings restatement might result in the delisting of its stock from the New York Stock Exchange.

The restatement also may put it in default on a $150-million line of credit, and the company said it had asked lenders for a waiver.

Krispy Kreme said it believed that cash on hand, “combined with cash generated from operations,” would be sufficient to fund its business.

But the restatement, the company said, would shrink profit for the 2004 fiscal year. The decline would be $3.8 million to $4.9 million.

Krispy Kreme had said earlier that it earned $56.8 million on sales of $665.6 million in the fiscal year ended Feb. 1.

For a preview of this week’s business news, please see Monday’s Business section.