Review & Preview
Reversal of Fortune: Kirk Kerkorian’s Tracinda Corp. has notified regulators that it plans to buy up to another 10 million shares, or 4 percent, of Metro-Goldwyn-Mayer Inc. The move was prompted by what it said was MGM shares trading below the studio’s underlying value. Meanwhile, MGM has replaced its marketing and distribution president, Robert Levin as part of a corporate restructuring. Former Universal Pictures marketing executive Peter Adee will become president of worldwide marketing.
Sagging: Citing dislocation caused by last year’s labor negotiations and a slowdown in the aftermath of the Sept. 11 terror attacks, the Screen Actors Guild reported that film and television roles for its members fell 9.3 percent in 2001 from the previous year. Runaway production was also blamed for the drop to 48,167 guild-contracted roles, from 53,134 in 2000.
Blame Game: One-time super-agent Michael Ovitz has blamed what he calls Hollywood’s “gay mafia” for recent financial troubles that led to the collapse of his Artists Management Group. In an upcoming Vanity Fair article, Ovitz cites DreamWorks SKG founder David Geffen and Universal Studios head Ron Meyer as being behind the cabal. Ovitz says that the group, which includes Hollywood executives and others who aren’t gay, is still after him. Told of Ovitz’s remarks, Geffen said “This is so crazy. This is insane. I think he needs a psychiatrist.” The day after the news broke, Ovitz issued an apology for his published remarks.
Last Performance: Performing Arts magazine, the glossy monthly that has served California theaters for almost 30 years, will be going out of business, effective Sept. 1. The decision comes a month after Playbill magazine, publisher for most Broadway theaters, had acquired Stagebill, its long-time rival. Stagebill had purchased Performing Arts last year.
Soccer Loss: THQ Inc., based in Calabasas, said its second quarter net income will be reduced by $2.8 million, or 7 cents a share, to 10-12 cents because of costs associated with the closure of Network Interactive Sports Ltd., a venture started a year ago with Hotgen Studios. The venture sold an online soccer game in Britain that didn’t attract enough customers willing to pay the monthly fee.
Disney Goof: Citing a math error, Walt Disney Co. corrected a line item in its last two income statements in which year earlier earnings excluded the effect of new accounting rules that require companies to write down their goodwill assets to reflect permanent declines in value. Instead of showing a $9 million loss for the six months ended March 31, 2001, the Burbank-based company should have reported a gain of $176 million. The change had no effect on cash flow.
DWP Inquiry: The Los Angeles Department of Water and Power has hired the law firm of Van Ness Feldman to investigate whether its energy trades artificially boosted electricity prices. At issue are so-called ricochet trades in which power could be exported out-of-state and then resold at a higher price to avoid price caps. A report is due in September.
Legal Play: O’Melveny & Myers LLP announced plans to merge with New York-based O’Sullivan LLP, pending partnership approval. The merger would add 88 attorneys to the 753 already at O’Melveny and double the size of its New York office.
Sports Beat: Baseball takes its All-Star break Monday-Wednesday, with the celebrated game itself slated for Tuesday night (9th) at Miller Park in Milwaukee. Starting Thursday, it’s back to work for the Dodgers, with an important four-game series against the Arizona Diamondbacks Thursday-Sunday at Dodger Stadium.
Swashbuckler: The American Ballet Theater returns to the Dorothy Chandler Pavilion at the Music Center Thursday (11th) with “Le Corsaire,” a comic tale of pirates, love, adventure and murder. This week marks the first time in five years that ABT, which just wrapped its season at New York’s Metropolitan Opera House, has appeared at the Music Center.
Healthy Numbers: East West Bancorp is scheduled to release second quarter earnings on Thursday (11th), and estimates are that earnings per share will hit 46 cents per share, up from the 41 cents from the year-earlier quarter. Set to report fourth quarter earnings is Tenet Healthcare, which projects earnings per share of 61 cents. That would be a 35 percent increase over the 45 cents reported the year earlier.
Bounce?: June’s retail sales figures, due out Friday (12th), are expected to show a bump from May’s numbers. Consensus estimates are that retail sales, excluding autos, will inch up by 0.4 percent, a swing from the 0.4 percent decline in May. Throw in cars and the numbers look even better: 0.6 percent growth in June, compared to a decline of nearly 1 percent in May.
Jobs Update: State and county jobless numbers for June are due out on Friday (12th). The California unemployment rate in May was 6.3 percent, down from 6.5 percent a month earlier, while in Los Angeles County the May jobless rate was 6.8 percent, down from 6.9 percent in April. Economists have expected L.A.’s rate to peak at or about 7 percent, still well below the double-digit levels of the last recession in the early 1990s.
Appropriations: At its next regular meeting on Tuesday (9th) the L.A. Board of Supervisors will vote on whether to approve as much as $22.5 million in deficit funding for the Disney Concert Hall. The funds would be a stopgap, intended to keep construction on schedule as the project awaits as much as $50 million in pledges not yet received. The board will also vote on approval of a $3 million Community Development Block Grant to help retain 130 jobs at Oh Boy Industries Inc. in San Fernando.