L.A. Market Ready to Support NFL Team, Study Finds

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The return of the NFL to the second largest television market will be successful because the market has not yet reached a saturation point, a new study has concluded.


The three-month study, sponsored by the Los Angeles Sports Council and the Los Angeles Area Chamber of Commerce, reported continued revenue, employment and attendance growth in the local sports market.


Los Angeles County sports organizations generated $1.2 billion in revenue last year while overall revenue among the 52 organizations surveyed increased to $1.7 billion, up 14 percent from the previous survey three years ago.


The analysis showed the sports industry generated $4.1 billion in total economic impact to the region, up from $3.6 billion in 2003, despite the lack of a professional football team and the cancellation of the professional hockey season.


“The NFL is additive, not a substitute for the current sports offerings in this marketplace,” said Jeff Marks, managing director of Sports Business Group, a consulting firm. “Football is going to reach a different demographic.”


Attendance at sports events reached 29 million last year, representing a 3.3 percent compounded growth rate since 1993. It could have been as high as 4.5 percent if the National Hockey League had not canceled its 2005 season.


The two highest paid attendances at a single-day event in 2005 were both auto races held at California Speedway in Ontario. The next highest attended events were both football games. The Rose Bowl game drew 93,486 and the UCLA vs. USC football game at the L.A. Coliseum drew 92,000.



Universal Settles Payola Probe


Universal Music Group Recordings Inc. has agreed to pay $12 million to settle a payola case that claimed the company provided vacations, electronics and other bribes to increase radio play for their artists, according to a statement from New York Attorney General Eliot Spitzer.


The bribes and gifts reportedly were used to gain airplay for songs on records by Nick Lachey, Ashlee Simpson, Brian McKnight, Big Tymers, and Lindsay Lohan, Spitzer said in papers filed in state Supreme Court with the settlement.


The company, which has corporate headquarters in Santa Monica and New York, agreed to pay the cash to charity, along with $100,000 to cover the cost of the investigation. The company didn’t admit guilt, but acknowledged “various employees and independent promoters acting on behalf of the company” engaged in the illegal practice. It also has agreed to reform its practices.


Universal, whose labels include Geffen, A & M; Records and Island Def Jam Music Group, has a nearly 26 percent share of the world market.



Cheesecake Share Purchase


Calabasas-based Cheesecake Factory Inc. announced that it recently repurchased 1.5 million shares of its common stock for an aggregate purchase price of approximately $50 million.


The repurchase was made pursuant to an existing share repurchase authorization provided by the restaurant chain’s directors to buy back up to 6 million shares in the open market as market conditions warrant. There are approximately 2.4 million shares remaining in the repurchase authorization, although the authorization does not require the company to purchase shares and may be terminated at any time.


“We believe the share repurchase represents an excellent investment opportunity for us at this time and an effective use of capital,” said chief executive David Overton in a statement.



Record Bets


Woodland Hills-based Youbet.com Inc. said that the company and its International Racing Group and United Tote subsidiaries shattered all previous records for betting volume on May 6, the day Barbaro streaked to victory in the 132nd Kentucky Derby at Churchill Downs.


United Tote processed a record $175 million in wagers for the full day’s race card at Churchill Downs, while International Racing Group handled $4.3 million in live operator assisted wagers on race day.


The company said its marketing initiatives this year enabled the company to sign up more than 6,000 new customers in the two days leading up to the Derby.



Bright Job Picture


Despite rising prices that have put the squeeze on companies’ bottom lines, an index of California employment conditions released last week showed the job picture remains strong, even nudging up slightly in the second quarter.


The California Employment Indicator Index from Chapman University rose slightly in the second quarter to 123.8, up from 122.5 in the first quarter and from 116.9 in the second quarter of 2005.


Chapman’s index takes stock of gross domestic product values, exports, state construction spending and the Standard & Poor’s 500. A reading over 100 generally points to future payroll job growth; the index has been over 100 for 11 consecutive quarters.


Payroll job growth in California is now averaging 1.8 percent year-over-year, ahead of the national average of 1.5 percent.



Insurance Appointment


Steven P. Erwin has been appointed senior vice president and chief financial officer for Woodland Hills-based 21st Century Insurance, the company announced.


Before joining 21st Century Insurance, Erwin served as chief financial officer of Health Net Inc. and at U.S. Bancorp. Earlier in his career, he was treasurer for BayBanks Inc. and senior vice president, chief financial officer and treasurer for Old National Bancorporation. He also served on the audit staff at Coopers & Lybrand.


“Steve’s experience in the CFO role is an important addition to the management team. His broader financial services perspective and his commitment to staff development will be greatly appreciated,” said chief executive Bruce W. Marlow in a statement.


Deborah Crowe, Howard Fine, David Nusbaum

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