Newsletter: California Inc.: Deal might take flight for Santa Monica airport
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.
A&T has reached a deal to buy Time Warner Inc. for $85.4 billion in a blockbuster marriage that would transform the telephone company into the nation’s largest entertainment company and a major force in Hollywood. The agreement, negotiated at breakneck speed and announced Saturday, accelerates the wave of consolidation sweeping through the telecommunications and media industries. By adding Time Warner’s expansive portfolio, which includes Hollywood’s largest film and television Warner Bros., and such popular TV networks as HBO, CNN, Cartoon Network, TBS and TNT, the bulked-up AT&T would surpass Walt Disney Co. and Comcast Corp., which owns NBCUniversal. The deal must still be approved by regulators.
LOOKING AHEAD
Airport feud: The Santa Monica City Council is scheduled to consider a deal on Tuesday with the Federal Aviation Administration in the city’s ongoing efforts to close its municipal airport. Santa Monica has been pursuing a “starvation strategy” that includes reducing flight operations, forcing out aviation businesses, shortening the runway and closing the airport by July 2018 if legally possible. The city’s aggressive approach prompted the FAA in September to open an investigation to determine whether municipal officials are violating federal agreements that date from 1948.
Tesla financials: Tesla Motors, under pressure to accelerate delivery of its electric vehicles, will release its earnings for its third fiscal quarter on Wednesday. After production problems early in the year, the Palo Alto-based automaker is running more smoothly lately. Third-quarter deliveries of Tesla cars hit 24,500 from July to September, up 70% from the second quarter. Analysts surveyed by FactSet Research predict the company will report a 50% jump in gross sales compared with the previous quarter.
Personal data sharing: On Thursday, the Federal Communications Commission is scheduled to vote on a proposal requiring high-speed Internet providers to get customer permission before sharing sensitive personal information, such as Web browsing history and a mobile device’s geographic location. The proposal is not as stringent as an earlier version that would have required the providers to also get a user’s approval before sharing “non-sensitive” data, such as a person’s name, address and type of data plan.
Samsung switch: Samsung Electronics, reeling from unexplained fires and overheating problems in its Galaxy Note 7 smartphone, will likely get a new leader at its annual shareholders’ meeting Thursday. Samsung Electronics Vice Chairman Lee Jae-yong is expected to be appointed executive director, formally taking the company’s top spot. The Harvard-educated Lee, 48, is thought to have been making key decisions for Samsung since his father, Lee Kun-hee, 74, was hospitalized after suffering a heart attack in 2014.
Game time: It’s a notable week for three of Los Angeles’ professional sports franchises. The NBA’s Lakers, ranked by Forbes as the 10th most valuable sports team in the world, launch their season on Wednesday at Staples Center against the Houston Rockets. The Clippers open their season Thursday at Portland. And the Galaxy will have their first game in the Major League Soccer playoffs on either Wednesday or Thursday (depending on results of other games) at StubHub Center.
THE AGENDA
Monday’s Business section looks at the high stakes of trade deals. Regardless of who wins the White House on Nov. 8, it’s clear that trade agreements are going to face tougher scrutiny, if not outright rejection. But there are winners and losers in any trade relationship. And while vast swaths of the Midwest may qualify as victims, California — especially Southern California — mostly has been a beneficiary of free trade with China.
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:
Keeps on chugging: The California’s economy notched up 30,000 new jobs in September, even though the gain didn’t affect the unemployment rate, which held at 5.5%. September marked the eighth consecutive month that California employers hired more people than they fired. Los Angeles County’s unemployment ticked up to 5% in September, but the jobless rate was down from 6.2% a year ago.
New streaming service: Google is closer to launching its own video streaming service, which would offer big-budget network TV programming without a cable or satellite subscription. According to executives not authorized to comment, CBS, the most-watched broadcast network, has signed on to provide its programming to the new service. Expected to be called Unplugged, the service would make a small package of channels available to online users for a monthly fee.
Labor dispute: SAG-AFTRA, the largest actors union in Hollywood, called a strike against several big video game companies over the pay of performers who do voice-over and motion-capture work for popular games. Many sophisticated games take years to develop and bring to market, employing large casts of actors — who want a bigger piece of the action. Companies affected include Electronic Arts, Activision Blizzard, Take Two, Warner Bros. and Disney.
Harris weighs in: The California Department of Justice is investigating Wells Fargo on allegations of criminal identity theft over its creation of millions of unauthorized accounts. California Atty. Gen. Kamala Harris, who is running for a U.S. Senate seat, has joined the growing list of public officials and agencies investigating the bank in connection with the accounts scandal.
Tesla’s fast lane: According to Elon Musk, driverless car technology is a problem that’s pretty much solved — regulators just need to catch up. And they might want to start moving faster because Musk isn’t slowing down. The Tesla CEO said all cars the company produces going forward will be equipped with the hardware needed to transform them into self-driving cars.
WHAT WE’RE READING
And some recent stories from other publications that caught our eye:
Hyperloop hiccup: Musk has a dream and its name is Hyperloop, intended to zip from Los Angeles to San Francisco in 35 minutes. However, says New York magazine, the ambitious project “has run into a few speed bumps.”
A well-placed pal: Bloomberg profiles Haim Saban, the billionaire chairman of Univision Communications. He has two goals at the moment. “He wants to take Univision public. … His other goal is to elect Hillary Clinton president.”
Now that’s a cool gig: The Wall Street Journal spends some quality time with Steve Edmundson, investment chief for the $35 billion Nevada Public Employees’ Retirement System. His strategy? “Do as little as possible, usually nothing.”
Danger signs: The Orange County Register says the local economy is growing, but danger signs are mounting. “Jobs are expanding at a healthy clip, but many of the new positions pay poverty-level wages. Home values are surging, but an extreme shortage of affordable residences is driving young families and working-age adults out of the county.”
Snake eyes: Is the Trump Taj Mahal casino in Atlantic City, N.J., dead or, in “Princess Bride”-speak, mostly dead? The Associated Press reports on union fears that the casino operator “will try to reopen the Taj Mahal in the spring as a nonunion facility following a 102-day strike.”
SPARE CHANGE
OK, since “The Princess Bride” is on the table, what’s your favorite bit? Seems too easy to cite Inigo Montoya’s classic line or the various permutations of “inconceivable.” I’ve always had a soft spot for Fezzik’s rhyming skills. But the best scene, without question, has to be the sword fight, with its fine showcasing of Bonetti’s Defense.
For the latest money news, go to www.latimes.com/business. Until next time, I’ll see you in the Business section.
David Lazarus’ column runs Tuesdays and Fridays. He also can be seen daily on KTLA-TV Channel 5 and followed on Twitter @Davidlaz. Send your tips or feedback to david.lazarus@latimes.com.
