Explaining Southern California's economy

Dodgers sale: Rick Caruso and Joe Torre yank bid over parking lots

Dodger Stadium Bleachers

pvsbond/Flickr (cc by-nc-nd)

The bleachers stand empty at Dodger Stadium in Los Angeles, California.

Parking lots? Yes, parking lots. The Dream Team of bidders for the bankrupt Los Angeles Dodgers, developer Rick Caruso and former Dodgers manager Joe Torre, has dropped out of the final rounds of bidding because current owner Frank McCourt insists on keeping the parking lots that surround Dodger Stadium.

The Los Angeles Times has obtained a copy of the letter that Caruso and Torre sent to Major League Baseball on Feb. 17. In it, they leave open the possibility of re-entering the fray. But in retrospect, we should have seen this coming. The parking lots aren't part of the bankruptcy proceeding. But it was widely assumed that McCourt would let them go to sweeten the deal. 

Of course, McCourt is, down deep, a parking lot guy. This is where he made his money, back in Boston before he came west to try his hand an running a storied MLB franchise. Caruso is also a parking lot guy, in a manner of speaking. If he and Torre had been able to buy the Dodgers, he would have let Joe run the team while he set about remaking Chavez Ravine in the manner of the Grove and the Americana at Brand, his beloved, Vegasized shopping meccas in L.A. 

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Disney earnings: Maybe there isn't a tech-entertainment connection

World of Color

Susan Valot/KPCC

"World of Color," a water show that opened last year, is credited with drawing more people to Disney California Adventure.

Walt Disney Co. reported first-quarter earnings yesterday, and they were fairly good: net income was up 12 percent.

But the growth came largely from ESPN and theme parks. If you study the earnings statement, you can spot something alarming in two critical parts of the business of the Mouse: movies and video games.

This is from Bloomberg:

Seven Disney films in U.S. theaters in the quarter collected ticket sales of $239 million, a 33 percent drop from $357.6 million generated by nine movies a year ago, according to Box Office Mojo, an industry researcher.

The studio is in talks with Coinstar Inc.’s Redbox and other services to impose a 28-day delay on rentals of new DVDs, [CEO Bob] Iger said on the call. The delay is being sought because of the industrywide drop in DVD and Blu-ray sales, he said.

The consumer products unit reported profit little changed at $313 million on a 3 percent higher sales of $948 million.

Disney’s interactive division registered a loss of $28 million. Sales tumbled 20 percent to $279 million. The unit is cutting costs and taking steps to raise revenue with a goal of becoming profitable in the next fiscal year, Iger said. It hasn’t shown a profit since Disney began breaking out the results in the final three months of 2008.

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Microsoft is back in the driver's seat on Yahoo deal

Mercer 20917

Justin Sullivan/Getty Images

A Yahoo! billboard is visible through trees in San Francisco, California.

I used to think that Microsoft should buy Yahoo. It didn't in 2008 — although that was less about Microsoft than it was about Yahoo's unwillingness to sell. Now that Yahoo has entered something of a tailspin, canning its CEO and exploring some sale options, Microsoft is back. And oh boy! What a deal it's looking to make.

But I now don't think Microsoft should buy Yahoo.

This is from the Wall Street Journal:

Potential suitors said they believe Yahoo’s inherent value is lower than its current share price of about $16.12, which they say includes a “deal premium” reflecting investors’ anticipation of the sale of Yahoo, people familiar with the matter said. The stock has run up since Carol Bartz was ousted as chief executive last month and Yahoo launched a strategic review.

In 2008, Microsoft was offering $31/share. It's traded as low as about $11. I'd say it's worth way more than $16, but in any case, Microsoft is now positioning itself to take a sweet stake, in preferred shares. I think this lessens the chance that I'll get my wish, which is to have Yahoo shed its identify as a tech company and remake itself as a Southern California-based online entertainment juggernaut. Microsoft doesn't need to be buying it. Disney does.

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Wait! Maybe Yahoo will move to LA!

A while back, I suggested that Yahoo, the beleaguered technology colossus, should close up shop in Silicon Valley and move all its operations to Southern California. (It already has an office in Santa Monica.) Now CNN's Juilanne Pepitone reports that something along those lines might be in play. Could Disney buy Yahoo? Here's the lowdown:

While Disney hasn't thrown its name into the ring, one analyst thinks it and its big-media rivals should consider a Yahoo buyout.

"The big guys -- Apple, Google -- aren't interested. And either way, it would make more sense for a traditional media company to buy Yahoo," says James Dobson, stock analyst at The Benchmark Group.

That's because traditional media companies are struggling with how to monetize their online presence. They're still working through the transition from old to new media, and they face stiff competition from upstart online publications.

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