Digest/turner/26″/LK1st/mark2nd
Murdoch Foiled
News Corp.’s American Sky Broadcasting suffered a major blow when a deal to buy its valuable orbital satellite slot fell apart.
Primestar Inc. had been negotiating a $1.1 billion deal to buy the slot from American Sky, a joint venture between Rupert Murdoch’s News Corp. and MCI Communications Corp. The deal raised antitrust concerns from the Justice Department, which filed suit in May to block it. Justice officials say it would deter competition between cable and satellite TV because Primestar is owned by major cable operators Time Warner Inc., MediaOne, Comcast and Cox Communications.
American Sky is now said to be negotiating a deal for the satellite slot with El Segundo-based DirecTV, the nation’s dominant satellite TV company, although analysts say the ultimate price is likely to fall far short of Primestar’s original offer.
Sports Sponsorships
The Staples Center arena, currently under construction in downtown L.A., has announced some big-league sponsorship agreements that will pump millions into the pockets of the center’s owners and provide heavy exposure to the arena’s marketing partners.
The eight major sponsors are Anheuser-Busch, BankAmerica Corp., the Los Angeles Times, McDonald’s Corp., Pacific Bell, PepsiCo., Toyota Motor Sales, and United Airlines. Two others will be announced later.
Costs of the sponsorship deals were not disclosed. The marketing partners will have their names printed on towers flanking the center, and will be allowed to sit in on architectural plans for the arena’s interior to incorporate their marketing messages into the design.
Alameda Corridor Agreements
Tutor-Saliba Corp., the same contractor repeatedly cited for inflated expenses on the Metro Rail project, was awarded a $712 million contract to build the most crucial portion of the $2.4 billion Alameda Corridor project.
Tutor-Saliba will be responsible for a 10-mile concrete-lined trench that will pass under some of the most traffic-congested portions of the 20-mile route from the ports to downtown Los Angeles. Despite Tutor-Saliba’s troubled history with the Metropolitan Transportation Authority, the Alameda Corridor Transportation Authority’s board says there are incentives and penalties to assure that the trench project is completed on time and on budget.
In addition to the trench contract, a package of measures was approved by the board last week that will clear the way for the project to begin, including a new ceiling on bonded indebtedness of $1.3 billion.
No Library for MGM
Billionaire Kirk Kerkorian has scrapped plans to beef up the film library at his Metro-Goldwyn-Mayer Inc. studio by purchasing the movie catalog of PolyGram Filmed Entertainment.
Kerkorian originally offered $300 million to buy the PolyGram library, which includes such films as “Fargo,” “Four Weddings and a Funeral” and “Bean,” from owner Seagram Co. Ltd. He reportedly was ready to increase the bid to $400 million, but negotiations eventually broke off when the two parties were unable to reach an agreement.
Home Sales Slowdown
Home sales are projected to drop by 5 percent in Southern California next year and 8 percent statewide, according to the “1999 Market Forecast” report from the California Association of Realtors.
The chilling effect of the Asian economic crisis was cited as the culprit for the drop-off. But despite the forecasted drop in sales, home prices are expected to continue to rise by 1 percent to 2 percent in Southern California and 4 percent statewide.
And even though the home market won’t be as hot as it was in 1998, analysts say 1999 will still rank as the fourth-best year on record.
Sub-Prime Lender Deals Collapse
A deal by Fremont General Corp. to buy PacificAmerica Money Center fell apart as the stocks of sub-prime lenders around the country crashed.
Fremont General, the Santa Monica-based insurance and finance company, had offered to buy Woodland Hills-based PacificAmerica at a time when similar sub-prime lenders which provide loans to people considered high credit risks were doing a booming business. But lenders like PacificAmerica, which tend to package these loans and sell them as securities, have had a difficult time of late as risk-averse investors have begun declining to buy the loans.
The same day that merger fell apart, another deal involving sub-prime lenders collapsed. Dallas-based FirstPlus Financial Corp. abandoned its plans to acquire Riverside-based lender Life Financial Corp.
Coalition Touts Neighborhood Councils
A broad coalition of liberal and conservative groups unveiled its vision for the future of Los Angeles government, calling for elected neighborhood councils with decision-making powers over development.
The group, calling itself simply “The Coalition,” brings together such diverse interests as homeowner groups in the San Fernando Valley, leaders of local labor unions and former mayoral candidate and state Sen. Tom Hayden, D-Los Angeles. It backs a plan being studied by the dual charter reform commissions for the creation of 15 neighborhood councils that would have strong powers to approve development in their regions.
Business groups and Mayor Richard Riordan have expressed their opposition to neighborhood councils with decision-making powers, saying they would hamper development and lead to another layer of government.
Safeway to Gobble Dominick’s
Supermarket holding company Yucaipa Cos. has agreed to sell its stake in the Dominick’s Supermarkets Inc. chain to Safeway Inc.
Century City-based Yucaipa and New York-based Apollo Advisors bought Dominick’s, which operates 112 stores in the Chicago area, in 1995 and took it public in 1996. The two firms combined owned 41 percent of the supermarket company’s stock.
Safeway agreed to buy the chain for $1.2 billion, or $49 a share.
Compiled by Dan Turner
