The Fox and the Ducks
The Anaheim Mighty Ducks filed suit last week against West L.A.-based Fox Sports West, claiming the cable sports network damaged its reputation and jeopardized merchandise sales and game attendance by shifting the team’s games to a little-watched startup network.
Fox last month shifted Ducks games from Fox Sports West to its new Fox Sports West 2, a Southern California regional sports network. Two of the region’s biggest cable systems operators, Continental Cablevision Inc. and Century Communications Corp., have refused to carry the new network, which now can only be seen by about 400,000 subscribers.
According to the suit, many fans are angry about no longer being able to see the Ducks on television. The team’s contract with Fox Sports West expires in 1998, the suit said.
After that time, analysts believe the Ducks may leave the network, considering that the team is owned by Walt Disney Co. which also owns the ESPN and ESPN 2 sports networks.
Low ranking for L.A.
Los Angeles and Orange counties ranked only No. 30 on this year’s list of the top 50 entrepreneurial regions in the U.S. by Cambridge, Mass.-based Cognetics Inc.
According to the economic research firm, Salt Lake City is the country’s biggest hot spot for enterpreneurs. This is the second year in a row that the Utah community has topped the Cognetics list, which is compiled by economist David Birch.
The study ranks metropolitan regions based on the proportion of young startups with more than five employees to total businesses. Although L.A. ranked well behind such entrepreneurial hotbeds as Atlanta, Birmingham and Phoenix, it was the top region for growing young companies in California.
The San Francisco Bay Area placed No. 31 on the list, and San Diego was No. 33.
California in general had a suprisingly poor showing on the state rankings, placing only No. 18. Critics of the Birch survey pointed out that California still has far more entrepreneurial companies than any other state, and the proportional basis of the Cognetics study makes its results decieving.
Around the dial
Viacom Inc. is reportedly looking for buyers for its 10-station radio group, which includes two FM stations based in Burbank.
According to the Wall Street Journal, Viacom rejected an offer of $700 million from Walt Disney Co. for the entire group, and the company is now considering a plan to break the group up and sell individual stations. Analysts value the 10 stations at between $700 million and $900 million.
In L.A. County, Viacom owns KYSR-FM (98.7) and KIBB-FM (100.3). Both are ranked among the top 25 in the L.A. market in terms of audience share, and both play an adult contemporary format.
Radio station values rose substantially last year as a result of industry consolidation following the relaxation of ownership rules by the Telecommunications Act of 1996. One result in L.A. was the recent sale of Glendale-based KSCA-FM (101.9), which was purchased by Heftel Broadcasting Corp. for a reported $112 million. The station changed format from adult album alternative to Spanish-language last week.
Las Vegas-based Heftel is the owner of KLVE-FM (107.5), a Spanish-language outlet that is the top-rated station in the L.A. radio market.
Great Western settlement
Chatsworth-based Great Western Financial Corp. will have to pay up to $17.2 million to mutual fund customers it allegedly defrauded, under a tentative settlement approved last week by a federal court judge.
The payment would settle two class-action lawsuits filed by investors who bought mutual funds at Great Western between 1992 and 1995. The amount of payments to each investor depends on how many file claims within the next few weeks, and how much of the settlement will be needed to pay legal fees.
The plaintiffs claim Great Western did not adequately inform them of the risks involved with stock market investing. Customers during the relevant period lost an average of 10 percent of their investments.
Some of the settlement costs will be paid from a reserve worth between $6 million and $8 million that Great Western has already set aside, while the rest will be covered by the thrift’s insurance company.
Hammering a hardware deal
L.A.-based merchant banker Leonard Green & Partners is negotiating with Kmart Corp. and Waban Inc. to buy a majority stake in a new company that will merge the hardware chains owned by the two retail giants.
Kmart, which owns 168 Builders Square stores around the nation, is considering a plan to spin off its hardware operation to focus on its core business. Waban, meanwhile, has been exploring strategic options for its Homebase chain, which has 84 stores nationwide.
The deal under discussion would bring Green majority ownership of a new company merging both chains, creating the third-largest hardware retailer in the country. Terms of the proposed deal have not been disclosed.
Green is noteworthy for having merged the Payless Drug Stores Northwest chain, which it acquired from Kmart, with Thrifty Corp. in 1994 to form Thrifty Payless Inc. That chain was later sold to the Rite Aid Corp.
Compiled by Dan Turner