Review
January 17-23
Another Chapter 11: Wherehouse Entertainment Inc., the Torrance-based music and movie retailer that emerged from bankruptcy in 1997, has filed for Chapter 11 protection again. Wherehouse said its revenue has declined due to continuing competition from mass merchandisers and specialty electronics chains. Operations will be financed during the bankruptcy with existing cash.
Port Peace: Workers at West Coast ports approved a six-year labor contract, formally ending a dispute that prompted a 10-day shutdown of the harbors last year. The contract was approved with about 89 percent of the vote.
Kerkorian Sell-off: Tracinda Corp., the investment company led by billionaire Kirk Kerkorian (right), plans to reduce its stake in Metro-Goldwyn-Mayer Inc. by 13 percent, to 67.3 percent. Tracinda said it’s selling 25 million shares in the movie studio to take advantage of tax benefits before its fiscal year ends Jan. 31. Meanwhile, Santa Monica-based MGM said it had fourth quarter net income of $55 million to $60 million, up from $39.1 million for the like period a year ago.
Dodgers on Block: New York sports executive David Checketts is offering News Corp. almost $650 million for the Dodgers, their stadium and regional sports network and is arranging financing. Checketts may borrow as much as $215 million from SG Cowen Securities Corp. and J.P. Morgan Chase & Co., Bloomberg News reported. Besides bank financing, Checketts is in talks with private-equity firms. There has been ongoing speculation that News Corp. wants to free up cash to help purchase Hughes Electronics Corp., parent of the DirecTV satellite service.
Universal Bidding: Executives of Vivendi Universal SA met with representatives of billionaire Marvin Davis about Davis’ proposed bid for Vivendi’s U.S. media assets, including Universal Studios and Universal Music Group. According to various press reports, Davis was prepared to up an earlier bid for the assets, although there is no indication whether Vivendi officials have decided to sell off the properties. Other U.S. media interests, including General Electric Co., parent of NBC, might also consider making an offer.
Writers Lose: Networks, producers and talent agencies won the dismissal of suits claiming they stopped giving work to writers over 40. The plaintiffs claim that the networks purged their writing staffs of those above 40 and replaced them with “generally less qualified” writers in their 20s and 30s in an effort to attract younger viewers. The suits sought unspecified back pay, punitive damages and an order halting the practice. Los Angeles Superior Court Judge Charles McCoy said the 176 writers in the suits may refile their claims individually against each defendant, which include CBS and William Morris Agency Inc.
Kermit Update: EM.TV & Merchandising AG said the sale of Muppets creators Jim Henson Co. might be delayed until the end of February as talks continue with potential buyers. The company had tentatively agreed to sell the company to a group led by Dean Valentine, former head of the UPN television network.
Earnings: Activision Inc. reported third quarter net income of $44.3 million, compared with $39.1 million for the like period a year ago. Revenue for the Santa Monica-based videogame maker rose 2 percent, to $378.7 million.
New Chief: Burbank City Manager Robert “Bud” Ovrom was named chief executive and administrator of the Los Angeles city Community Redevelopment Agency in a unanimous vote of the agency’s board. Ovrom, one of four candidates to replace outgoing administrator Jerry Scharlin, is expected to win confirmation from the L.A. City Council.
Preview
Jan. 27- Feb.2
Earnings Flood: Among the local companies set to release financial results this week at S & P; 500 members Avery Dennison, Occidental Petroleum and Walt Disney. Other firms whose numbers come out are Youbet.com, California Pizza Kitchen, SeeBeyond Technology, IndyMac Bancorp, OSI Systems, Tekelec, eUniverse, Ixia, Digital Insight and Hawthorne Financial.
Presidential Address: Iraq, terrorism and the administration’s economic stimulus plan will be among the topics covered by President Bush in Tuesday’s (28th) State of Union address. Coverage begins at 6 p.m. and will include the usual post-mortems by the talking heads.
Chamber Fete: The Los Angeles Area Chamber of Commerce holds its annual inaugural diner on Thursday night (30th) at the Beverly Hilton Hotel. The co-chairs are L.A. Mayor James Hahn and County Board of Supervisors Yvonne Brathwaite Burke. Former U.S. Secretary of State Warren Christopher will receive the Civic Medal of Honor. Reception starts at 6 p.m.; dinner at 7 p.m. For information: 213-580-7524.
GDP Number: With renewed concern about the possibility of a double-dip recession the advance fourth quarter gross domestic product figure, due out Thursday (20th), will be watched closely on Wall Street. The betting is for growth at a 0.5 percent annual rate, although some economists say that the GDP might have been in negative territory.
Contract Opportunities: The office of L.A. Mayor James Hahn hosts a business incentive and resource workshop on Thursday (30th). Representatives from various city departments will discuss contracting opportunities and answer questions about doing business with the city. The workshop runs from 5 p.m. to 7 p.m. in the community room of the 77th Street Police Station, 7600 South Broadway St. in Los Angeles. For information: 213-978-0695.
Sports Beat: The Lakers are home on Saturday (1st) against Utah. The Clippers are home on Wednesday (29th) against Chicago and Friday (31st) against Phoenix. UCLA (men’s) play Oregon State on Saturday at Pauley Pavilion, while USC takes on Oregon on Sunday (2nd) at the Sports Arena. The Kings are home on Thursday (30th) against Minnesota. The Pro Bowl, the final NFL game of the year takes place on Sunday in Honolulu. Also on Sunday is the NHL All-Star game in Fort Lauderdale, Fla. And for golf fans, there’s the Bob Hope Chrysler Classic starting on Wednesday in Palm Desert and running through Sunday.
Restated Restatement: Embattled publishing and TV programming company Gemstar-TV Guide International said it planed to restate its results for all of 2000, 2001 and the first nine months of 2002 by a total of $100 million.
