Diller Lands Ticketmaster
Home Shopping Network owner Barry Diller last week upped his bid for the remaining 50 percent of Los Angeles-based Ticketmaster Group Inc. that he didn’t already own, and this time Ticketmaster’s board was satisfied with the offer.
Diller had offered $340 million for half the company in October, but the bid was rejected as too low by shareholders. This time, he agreed to swap stock worth about $400 million.
While the board signaled its assent, and shareholders are likely to concur, analysts say the deal will probably lead to the departure of Ticketmaster Chief Executive Frederic Rosen, who has strongly opposed the acquisition.
New BID Launches
Another downtown-area business improvement district kicks off this week. The Figueroa Corridor BID, approved last year by the L.A. City Council, covers a 40-block area along Figueroa Street from the Convention Center (and proposed Staples Arena) to the L.A. Coliseum and the USC campus.
The BID will raise $2.9 million a year for five years from 106 property owners in the area, including the Automobile Club of Southern California, Orthopedic Hospital, University of Southern California, California Science Center, Mt. Saint Mary’s College, and the Shrine Auditorium. The largest assessment will come from the Shammas Group of auto dealers.
Like other property-owner business assessment districts, the money raised will be used for street and sidewalk maintenance, security patrols and marketing above and beyond those services provided by the city.
Another Deregulation Delay?
The head of one of California’s biggest utilities warned last week that computer glitches might once again stall the onset of deregulation in the state’s power industry.
Pacific Gas & Electric Co. Chief Executive Gordon Smith said there are problems with computer simulation tests intended to ensure there is enough power during periods of peak demand. Unless test results improve, Smith said, the system may not be ready to meet the March 31 deadline.
The deregulated market in California was supposed to kick off Jan. 1, but computer problems prompted a three-month delay.
Feds Join Jacobs Suit
The federal government last week joined a whistle-blower lawsuit against Pasadena-based Jacobs Engineering Group, accusing the company of overbilling the military and various government agencies by $12 million since 1987.
The U.S. Atttorney’s Office will take part in a lawsuit filed in July by a former Jacobs employee. According to the complaint, Jacobs passed along rental costs for its corporate headquarters by charging higher rates on government contracts, in violation of contract rules. The company issued a statement saying it believes its accounting procedures were in compliance with federal regulations.
MTA Found Out of Control
An audit of the Metropolitan Transportation Authority released last week by the agency’s inspector general showed that the MTA has failed to set up basic accounting controls and has not performed an internal audit in two years.
The report found such deficiencies as a failure to set up a standard invoice process on the Pasadena Blue Line, which meant that its 84 subcontractors all submitted different bills to the MTA some of them containing too little information to judge what work was actually performed. The agency does not know how much real estate it owns, and has failed to keep track of the hundreds of millions of dollars collected from bus and rail riders every year, the report said.
The inspector general called for a new “organizational culture” at the agency.
Utility Merger Approved
The merger of L.A.-based Pacific Enterprises with Enova Corp. of San Diego, planned since October 1996, was finally granted approval by the U.S. Justice Department last week.
Pacific Enterprises, parent of Southern California Gas, and Enova, parent of San Diego Gas & Electric, are planning to sell fossil-fuel power plants in Carlsbad and San Diego, a condition of the Justice Department approval. Following the $6 billion merger, the combined parent company will be called Sempra Energy, but the two utilities will continue to operate separately.
More Taxes Ahead
The L.A. City Council has moved to extend indefinitely a $1.50-a-month city sanitation tax that was supposed to end this summer.
The tax, part of a $6 monthly fee on Department of Water and Power Bills, was approved by the City Council in 1996 as a temporary measure to avoid a budget shortfall. It contained a sunset clause calling for its demise in June 1998.
But Councilmen Richard Alatorre and Michael Feuer have proposed eliminating the sunset clause at the request of Mayor Richard Riordan.
FutureNet Back in Business
After nearly two weeks out of business following an action by the Federal Trade Commission, Valencia-based online marketer FutureNet Inc. on March 6 secured a court order allowing the company to continue operations.
FutureNet markets electricity and long-distance telephone service via the Internet. On Feb. 25, the FTC ordered it to shut down operations, accusing company officials of running an illegal pyramid scheme. A hearing on the charges is scheduled for April 13 in U.S. District Court.
Compiled by Dan Turner and Howard Fine