Filmmaking Costs Decline
The average cost of producing a major studio movie fell more than $700,000 in 1998, to $52.7 million, while the cost of marketing those movies climbed 13 percent in the same period, according to the Motion Picture Association of America.
In his annual assessment of industry finances, MPAA President Jack Valenti said the 1.4 percent dip in production costs signals a more disciplined approach by studio executives in setting production budgets.
But the seven major studios found there was little they could do about the increasing costs of marketing those films through television commercials. In 1998, the average cost jumped to $25.3 million from $22.3 million in 1997.
Valenti also said domestic box-office receipts totaled $6.95 billion in 1998 a 9.2 percent increase over 1997.
Fluor Begins Downsizing
Suffering from the Asian economic crisis and its own cost structure, Irvine-based Fluor Corp. said it would cut 5,000 employees, reorganize its operations and narrow the range of construction projects it undertakes.
The nation's largest engineering and construction company said the moves will reduce overhead costs by $160 million a year but would require a $130 million pretax charge against earnings in the current quarter.
Chairman and Chief Executive Philip J. Carroll said the current cost structure is unsustainable because the firm expects only $6 billion in new construction orders this year, which is about half the level of two years ago. Many of Fluor's largest projects were derailed by the Asian economic crisis.
Mayor Funds LAUSD Candidates
L.A. Mayor Richard Riordan has raised more than $1.4 million for the candidates he supports in next month's Board of Education race.
The amount means the three challengers and one incumbent backed by Riordan should be able to dramatically outspend their rivals in a race the mayor has called critical for overhauling an incompetent school board.
Most of the money raised by Riordan came from a $1,000-a-person reception last month. Among the top contributors was billionaire Eli Broad, who donated $250,000.
Riordan is supporting board member David Tokofsky and challengers Genethia Hayes, Mike Lansing and Caprice Young.
Machinists Settle with Lockheed
Just hours before a strike deadline, machinists at the Lockheed Martin Skunk Works plants in Palmdale and in Marietta, Ga., narrowly approved a new contract calling for a 3 percent raise over three years.
The workers also won more flexibility in scheduling time off and will now be allowed to take vacation time in four-hour increments and sick time in one-hour stretches.
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