Struggling Arco Seeks New Digs
Atlantic Richfield Co. is leaving its signature downtown headquarters.
Officials at Arco, a cornerstone of the downtown corporate community since 1972, said the move from Arco Plaza is part of a $500 million cost-cutting effort forced by declining oil prices. A total of 325 employees will be relocated beginning in March to a yet-undisclosed location. Arco is now seeking to sublease 275,000 square feet of office space.
The announcement came as Arco, the nation’s sixth largest oil company, registered a fourth-quarter loss of $794 million, or $2.47 a share, compared with net income of $382 million, or $1.17 a share for the like period a year ago. However, Arco’s latest fourth-quarter operating earnings of $70 million were ahead of expectations.
In addition. El Segundo-based Unocal Corp. said it will cut 475 jobs, or 6 percent of its workforce, after its fourth-quarter net income fell 79 percent. The tumbling earnings came as the price of a benchmark barrel of West Texas crude oil blend stands at about $13 a barrel. During the past 10 years, the price consistently ranged between $17 and $21 a barrel.
Then There Were Two
Hughes Electronic Corp.’s DirecTV is acquiring the assets of struggling rival PrimeStar Inc. and a related operation for $1.8 billion.
The move leaves the fast-growing satellite television industry with just two major players. El Segundo-based DirecTV has 7 million subscribers, while No. 2 EchoStar Communications Corp. has 2 million.
Together, the two firms will control many of the channel slots on satellites capable of reaching the entire United States. That will pose a challenge for would-be competitors to break into the growing field.
DirecTV acquired the assets and customer base of PrimeStar after that company tried to strike a deal with News Corp. and cable giant Tele-Communications Inc. The Justice Department blocked that deal over antitrust concerns.
Getting Back at Ovitz
The folks who run Creative Artists Agency keep getting madder at Michael Ovitz, their former boss.
In the latest chapter of the ongoing feud, CAA managers sent a clear message to Ovitz: Keep your hands off our talent. The message came in the form of an advisory to some of CAA’s biggest stars, who include Tom Hanks and Steven Spielberg, that if they retain Ovitz as a manager, CAA will no longer represent them as an agency.
Ovitz, who founded CAA more than two decades ago, had nothing to say about the directive, which came a week after he coaxed big moneymaker Robin Williams away from the agency to his new talent management firm.
Ovitz, it seems, was busy making other deals. He will now represent some of television’s biggest animators after reaching a deal with Ellen Goldsmith-Vein to merge her successful Gotham Group into his Artists Management Group. Among others, Ovitz’s firm will now manage the likes of Paul Germain, the creator of “Rugrats,” and Bill Kopp, creator of the “Roger Rabbit” shorts.
Actors Union Approves Merger
Seeking strength in numbers, the nation’s second-largest actors and broadcasters union approved a merger with the first, the Screen Actors Guild.
The American Federation of Television and Radio Artists said 68 percent of its members voted to merge with SAG.
“It’s clear that AFTRA members understood the need for strength and unity to deal with the consolidation of ownership going on in the entertainment and broadcast business,” AFTRA National President Shelby Scott said.
SAG members were still voting late last week on whether to approve the merger. In October, the SAG board recommended the merger on a 60-37 vote.
Quiet on the Streets
Film shoots on L.A. streets fell 4 percent last year as belt-tightening by studios took its toll.
Some observers called the decline in the number of days spent shooting outside sound stages a temporary glitch that could improve if box-office receipts pick up. They also blamed it on the weak Canadian dollar and tax breaks in that country that encourage shooting there, along with a threatened actors strike in this country early last year that disrupted L.A. shooting schedules.
The numbers marked the strongest indication to date that the soaring entertainment-industry growth of the mid-1990s might now be leveling off. The numbers were released by Entertainment Industry Development Corp., which issues permits for 80 percent of the shooting done in the county.
It’s, Like, a Settlement
Robinsons-May has agreed to leave the Sherman Oaks Galleria as part of an out-of-court settlement of a lawsuit claiming it was responsible for the decline of the once high-profile mall.
The suit was filed last May by Douglas Emmett Realty Advisors, which leads a partnership that owns the mall. The firm alleged that Robinsons-May, the mall’s largest tenant, did not adequately staff or stock its two Galleria stores and violated its lease by waiting until April 1998 to reopen a store damaged in the Northridge earthquake.
St. Louis-based May Department Stores denied the allegations and filed a counter-suit claiming mall management failed to attract customers and tenants.
Neither side would comment in detail on the terms of the settlement, which allows the Galleria to proceed with major renovations.
CB Keeps Growing
The world’s largest real estate services company is getting bigger.
Los Angeles-based CB Richard Ellis Inc. has agreed to merge its business in Japan with Ikoma Corp.
The foreign market expansion comes at a time when investors in CB Richard Ellis are concerned than a possible economic slowdown in this country could hurt business. The company’s shares have fallen in value more than 40 percent since early 1998.
Compiled by Danny Pollack
