BAD TIMES: The owner of the Los Angeles Times and KTLA Channel 5 filed for Chapter 11 reorganization, seeking time to deal with its mountain of debt. Chicago-based Tribune Co., which also owns the Chicago Tribune and Chicago Cubs, entered bankruptcy protection with $13 billion in debt and $7.6 billion in assets. Advertising revenue has declined severely this year, putting more pressure on Tribune, which owns 12 newspapers and 23 TV stations. The Los Angeles Times itself has endured a succession of cutbacks: lowering its page count by 14 percent and laying off 235 workers in July, including 135 in the newsroom. An additional 75 newsroom positions were cut in October.
DOUR FORECAST: California is in for a rough ride next year, according to economists at the UCLA Anderson School of Management. The Anderson Forecast predicts the state’s unemployment rate, now at 8.2 percent, could rise to 8.7 percent and stay there until 2010. About half of those job losses are expected to come from the manufacturing and trade sectors. Even worse for state coffers, Californian’s personal incomes, which are expected to be flat for 2008, will drop 0.6 percent in 2009, the first negative year since 2002. Taxable sales are projected to fall 3 percent in 2009 compared with a 5 percent drop for 2008.
LABOR UNREST: The Screen Actors Guild will mail strike authorization ballots to members Jan. 2 and announce results by Jan. 23, setting the stage for a potential halt to most production and a potential Oscars boycott. SAG said it was putting a strike to the vote of members to force the major studios back to the bargaining table. The studios made their final offer to SAG in June and have criticized guild leaders for demanding a better deal than other Hollywood unions. More than 75 percent of voting members would have to approve the authorization for the union’s leadership to call a strike.
FORECLOSURES: Home foreclosures in November rose 69 percent in Los Angeles County from a year ago, according to RealtyTrac Inc., an Irvine-based seller of foreclosure data. L.A. County ranked in the middle of the pack among California counties No. 27, with 1 in every 296 households receiving a foreclosure notice. The statewide rate for California was 1 in 218 homes receiving a notice, 51 percent worse than a year earlier. New laws that encourage lenders to work with homeowners have helped slow the month-to-month rate of increase from October (which was 6 percent for both Los Angeles and the state), but forecasters expect higher unemployment will cause the rate to pick up by January.
GREEN SKY: Billionaire Steve Bing’s Shangri-La Construction unveiled a $17 million environmentally friendly hangar for Burbank aviation services company Avjet Corp. at Bob Hope Airport in Burbank. The new 60,000-square-foot structure, designed to meet the U.S. Green Building Council’s Leadership in Energy and Environmental Design standards, is believed to be the industry’s only solar-powered airport hangar, and is Century City-based Shangri-La’s first project of its type. Shangri-La is negotiating with real estate developer Robert Maguire’s Maguire Aviation to build a similar “green” jet hangar at Van Nuys Airport.
NO DIVIDEND: DineEquity Inc. said it will suspend its quarterly cash dividend for the foreseeable future and instead will use the money to pay down debt. The Glendale-based operator and franchisor of 3,400 Applebee’s and IHOP restaurants said its board approved plans to reallocate the roughly $17 million in cash it has been paying in annual dividends on common stock. IHOP Corp. bought Applebee’s International for $2.04 billion in 2007 and subsequently changed its name to DineEquity.
PROJECT UPHELD: The Santa Barbara County Board of Supervisors upheld the Montecito Planning Commission’s October approval of Los Angeles developer Rick Caruso’s Miramar resort project. The board denied two appeals filed against Caruso Affiliated’s plans to build 192 luxury rooms, three restaurants, a spa, a beach club and a boardwalk at the site of the old Miramar Hotel. The project faced opposition from some residents over the height of the buildings and proximity to the main road. Caruso Affiliated bought the Miramar property in 2007.
EARNINGS: CKE Restaurants Inc. reported its third quarter net income fell 13 percent to $5.4 million compared with a year ago. The Carpinteria operator of the Carl’s Jr. and Hardee’s fast-food chains said revenue fell 4 percent to $337 million, although combined same-store sales rose 0.9 percent. Korn/Ferry International Inc. reported its second quarter net income fell 20 percent to $13.6 million. The Los Angeles executive recruiter, which plans to cut 400 jobs worldwide, said fee revenue fell 3.4 percent to $189 million. Cherokee Inc. reported its third quarter net income fell 12 percent to $3.3 million. The Van Nuys-based apparel brand licensing company said revenue fell 10 percent to $8.04 million.
CORRECTION
An article in the Dec. 1 issue headlined “Flynt Trying on Clothes for a Change” incorrectly said that Larry Flynt has been buying such Web sites as MetalMulisha, SilverStar, So-CalSpeedShop, NoFear and Tapout, and it incorrectly implied that he had purchased BuySullen.com because a picture from that Web site accompanied the article. Neither Flynt nor his company owns those Web sites or has any affiliation with them. Flynt has no plans to buy Web sites, contrary to what the article said.
There were several other inaccuracies. The article incorrectly said Flynt is threatening to get out of the DVD business by year’s end. Flynt is merely considering a change in his approach to the DVD business.
It also said “he’s spending millions to build a warehouse and office complex in Chatsworth.” A spokesman said Flynt’s company has spent significantly less to reformat its existing facility in Chatsworth.
The article said Flynt’s company, LFP Publishing Group LLC, generates “the vast majority” of its revenues from broadcasting adult fare on pay-per-view over cable and satellite in more than 40 countries. The company said such broadcasting does not account for the vast majority of the company’s revenues, and its presence is in 50 countries.
The company disputes several financial figures cited in the article. Also, the article gave the wrong name of one trade magazine Flynt has retained. The correct name is Tips & Tricks Video Game Codebook.
The story also incorrectly described the job title and role of Michael Klein. Klein was hired as president of LFP Publishing in July 2007 and, as such, he oversees the entire company.
