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.
This week begins with a nice economic tail wind. We learned from the Commerce Department on Friday that the economy performed better at the end of last year than initially estimated, expanding at a 1% annual rate from October through December. That was an improvement from the initial estimate last month of 0.7% growth. Consumer spending, meantime, grew at the fastest pace in eight months.
Mental competency: Attorneys for Sumner Redstone, the 92-year-old billionaire who controls CBS Corp. and Viacom Inc., will ask a Los Angeles Superior Court judge on Monday morning to dismiss the mental competency case brought against him by his former companion Manuela Herzer. Herzer, who was Redstone’s primary caregiver until mid-October, wants a judge to determine that Redstone lacks the mental capacity to handle his affairs. Herzer and her attorneys have called Redstone a “living ghost.”
Farm water: The California Board of Food and Agriculture will take up the controversial issue of irrigation runoff when it meets Tuesday in Sacramento. On the Central Coast, farmers and environmentalists have been fighting over a plan that would require tighter farm-by-farm monitoring of irrigation runoff and force growers to adopt a minimalist approach to applying fertilizers and chemicals. Separately, the board will get a briefing on the current state of affairs regarding the drought.
Yosemite changes: Some of the most historic place names at Yosemite National Park — the Ahwahnee Hotel, Curry Village, Wawona Hotel — will officially disappear Tuesday. The changes are the result of a feud between park officials and the outgoing lodging concessionaire, DNC Parks & Resorts at Yosemite Inc., which claims it owns the names of various park features. The Ahwahnee will become the Majestic Yosemite Hotel, Curry Village will become Half Dome Village, and the Wawona Hotel will become Big Trees Lodge.
Disney meeting: The Walt Disney Co. will hold its annual meeting of shareholders Thursday in Chicago. The company is coming off a quarter in which it earned record profit, largely due to the success of “Star Wars: The Force Awakens.” But Disney also had a 6% decline in operating income for its closely watched media networks unit, which includes ESPN and other broadcast and cable networks. Concerns about the effect of cord cutting and other changes roiling the TV business have brought Disney’s stock price down about 20% since November.
Employment news: The Labor Department releases the latest jobs report Friday. Economists expect it to show that job growth accelerated in February to 195,000 net new positions and the unemployment rate held steady at 4.9%. This will be the last read on the labor market before Federal Reserve policymakers meet March 15-16 to decide whether to raise a key interest rate.
Monday’s Business section delves into negative interest rates. That’s when central banks charge financial institutions to hold their money — the idea being that this prods private lenders to make more loans to businesses and consumers, thereby stimulating the economy. It’s been done in Europe and Japan. Is the United States next?
Here are some of the other stories that ran in the Times Business section in recent days that we’re continuing to follow:
iPhone tussle: The Apple saga continues. Chief Executive Tim Cook said the Obama administration should have done more to work out a technical solution with his company before seeking a court order forcing it to hack an iPhone used by one of the shooters in the San Bernardino terrorist attack. Meanwhile, Apple said the judge in the case had overstepped her authority and violated the company’s constitutional rights. It turns out, however, that Apple is more amenable to Chinese government requests. The company has censored apps that wouldn’t pass muster with Beijing officials. And it has moved local user data onto servers operated by state-owned China Telecom and submits to security audits by Chinese authorities.
Fare hikes: Despite falling fuel costs that are boosting profits for airlines, the nation’s largest carriers are increasing their fares $10 per round trip, the third increase of the year. The fare hike on most U.S. routes was initiated by Southwest Airlines, the nation’s largest domestic carrier. It was matched soon after by Delta, United and American Airlines. The latest hike, combined with prior increases in January and February, combined to raise airfares $22 for round-trip flights. The fare hikes come at the same time that airlines are reporting near-record profits as they also collect hefty revenue from passenger fees.
Something fishy: Sea World employees posed as animal rights activists in an attempt to spy on critics who oppose the San Diego park’s killer whale shows. The acknowledgment came at the end of a conference call to discuss SeaWorld Entertainment’s earnings. Chief Executive Joel Manby said the company’s board “directed management to end the practice in which certain employees posed as animal rights activists.” Last year, People for the Ethical Treatment of Animals accused a San Diego SeaWorld employee named Paul McComb of posing as an activist to spy on them. Manby said that McComb, who had been placed on leave during the investigation, has returned to work.
Medical device pioneer dies: Alfred E. Mann, a pioneering Los Angeles entrepreneur and philanthropist whose companies have developed breakthrough medical devices including the first rechargeable pacemaker and the insulin pump, died last week at the age of 90. Over the course of seven decades, Mann founded 17 companies. He recently resigned from the board of two of them: MannKind, a Valencia firm that developed an inhalable form of insulin; and Sylmar’s Second Sight Medical Products Inc., which makes an electronic retina that gives rudimentary sight to patients blinded by certain eye diseases.
New boss: When Jack Griffin announced Feb. 4 that he had wrangled a $44-million cash infusion for Los Angeles Times owner Tribune Publishing, he portrayed it as a vote of confidence in his business strategy, including his plan to acquire the Orange County Register. But by last week Griffin was out as chief executive, replaced by Justin C. Dearborn, a longtime associate of Michael Ferro, the Chicago entrepreneur who made the investment. Griffin’s ouster appears to have been orchestrated by Ferro, now the largest shareholder and chairman of Tribune Publishing. Dearborn is former chief executive of Merge Healthcare, a Ferro-backed Chicago information technology firm IBM acquired for $1 billion.
WHAT WE’RE READING
And some recent stories from other publications that caught our eye:
Like that: You don’t mess willy-nilly with something as big as Facebook. As Bloomberg reports, “The most drastic change to Facebook in years was born a year ago during an off-site at the Four Seasons Silicon Valley.” That’s when the wheels were set in motion for — gasp! — fiddling with the “like” button.
Jet, blue: Could flying get any worse? Yes, says the Economist, thanks to new sub-coach classes being devised by airlines. They’re known in the industry as “basic economy” or “last class,” but that’s just “shorthand for giving up some of the few remaining comforts of flying economy.”
Skillful investment?: Lawmakers are taking aim at fantasy sports, arguing that these businesses look more like gambling than entertainment. But Mark Cuban writes in USA Today that he’s buying in to the industry because “fantasy sports is a game of skill” and that “a player’s success or failure is determined by their skill.”
Gender blender: An interesting take on gender bias from the Washington Post. It looks at a study showing that “male students assumed their male classmates knew more about course material than female students — even if the young women earned better grades.”
Too much hassle: The New York Times ran a story about the breakfast cereal business. But what caught our eye was this particular sentence: “Almost 40% of the millennials surveyed by Mintel for its 2015 report said cereal was an inconvenient breakfast choice because they had to clean up after eating it.”
Are robots going to take over the planet? It sure looks like we’re getting there. Check out this creepy-cool video from Boston Dynamics showing a robot named Atlas in action. And thank your lucky stars it doesn’t yet have anger issues when you mess with it.
For the latest money news, go to www.latimes.com/business. Until next time, I’ll see you in the Business section.