The Los Angeles Times from Los Angeles, California on February 13, 2001 · Page 28
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The Los Angeles Times from Los Angeles, California · Page 28

Los Angeles, California
Issue Date:
Tuesday, February 13, 2001
Page 28
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C4 TUESDAY, FEBRUARY 13, 2001 NA BRIEFLY THE ECONOMY Short-Term Rates Decline in Treasury Auction The Treasury Department sold $11 billion in three-month bills at a discount rate of 4.9, down from 4.92 last week. An additional $10 billion was sold in six-month bills at a rate of 4.745, down from 4.755. The new discount rates understate the actual return, to investors 5.032 for three-month bills with a $10,000 bill selling for $9,876.10, and 4.929 for a six-month bill selling for $9,760.10. In a separate report, the Federal Reserve said the average yield for one-year Treasury bills rose to 4.72 last week from 4.66 the previous week. . (Associated Press) MANUFACTURING Mitsubishi Guilty of Aiding Price-Fixing A federal jury in Philadelphia found Mitsubishi Corp. guilty of aiding an international price-fixing cartel for graphite electrodes used to make steel. The verdict caps a U.S. probe that has led to convictions of six companies and more than $300 million in criminal fines since 1998. Prosecutors said the cartel held secret meetings in luxury hotels around the globe and had code names for the conspirators in a plot that almost doubled the price of electrodes from 1992 to 1997. Graphite electrodes are used to heat scrap metal at high temperatures to make steel in small mills. U.S. District Judge Marvin Katz will determine the amount of the fine at a later date. The Justice Department previously secured guilty pleas from the world's two leading manufacturers of graphite electrodes, UCAR International Inc. and Germany's SGL Carbon. Both companies paid $245 million in fines. Four other Japanese companies or their U.S. units have also pleaded guilty and paid more than $40 million in fines. Mitsubishi, which owned 50 of UCAR from 1991 until 1995, asserted its innocence and forced a trial as the lone defendant that refused to make a deal with prosecutors. The company's lead attorney said Mitsubishi intends to appeal the decision. (Bloomberg News) AUTOS Chrysler Boosts Incentives on Dozen Models DaimlerChrysler's Chrysler unit increased incentives on about a dozen models of cars, trucks and minivans to spur demand after the company's January sales fell 16. The auto maker is offering $1,500 cash back on Jeep Cherokee, Grand Cherokee and Dodge Durango sport-utility vehicles, all of its minivans and its Ram pickup truck. Sebring and Stratus cars will carry cash incentives of $1,000, and buyers of the Dakota pickup truck will get $2,000. Chrysler said the new incentives are designed to match, not exceed, incentives offered by its rivals. Chrysler blamed higher-than-expected incentives for the U.S. unit's loss of about $1.76 billion last year. DaimlerChrylser shares closed up 83 cents at $49.20 on the New York Stock Exchange. (Bloomberg News) PHARMACEUTICALS Pharmacia Reports 32 Increase in Profit Pharmacia Corp. said its profit from continuing operations rose 32 in the fourth quarter to $417 million, or 32 cents a share, from $316 million, or 24 cents, a year earlier as it cut back on research spending. Sales from continuing businesses rose 8 to $4.55 billion, led by Celebrex, the top-selling prescription arthritis drug. Sales of Celebrex, which Pharmacia acquired in a March merger with Monsanto Co., rose 55 to $772 million. Pharmacia's sales were slightly less than some investors and analysts had expected, although Celebrex sales topped many estimates, analysts said. The company cut research spending 2 to $680 million as it focused Monsanto's lab work on crops such as cotton and soybeans and held down other costs to finance its advertising for Celebrex in a battle against Merck & Co.'s painkiller, Vioxx. Shares of Peapack, N.J.-based Pharmacia rose 23 cents to close at $54.23 on the NYSE. (Bloomberg News) RETAILING Zale's Former Chairman, CEO Reinstated Zale Corp., the nation's largest jewelry retailer, reinstated former Chairman and Chief Executive Robert DiNicola to replace Beryl Raff and said it postponed reporting its fiscal second-quarter earnings from Wednesday until March 7. Zale said Raff, who was named to replace DiNicola in August, resigned to spend more time with her family and on personal interests. Zale and other jewelry retailers warned in December that quarterly profit would fall short of estimates because of weak holiday sales. DiNicola will assume the posts Feb. 21. Zale's shares fell $2.63 to close at $32.67 on the NYSE. (Reuters) Venator, Williams-Sonoma Name New Execs Venator Group Inc., owner of the Foot Locker chain of athletic-shoe stores, said it named Matthew Serra chief executive and president and J. Carter Bacot chairman, effective March 4. Serra, 56, currently is president and chief operating officer. Serra and Bacot are replacing Dale Hilpert, who will resign March 3 to become chief executive of Williams-Sonoma Inc., a kitchenware and home-furnishings chain whose stores include Pottery Barn and Hold Everything. New York-based Venator rose 14 cents to close at $12.04, and Williams-Sonoma rose 28 cents to finish at $24.90, both on the NYSE. (Bloomberg News) Crown Books Corp., the fourth-largest U.S. bookstore chain, filed for Chapter 11 bankruptcy protection for the second time in less ' than three years amid mounting losses, increasing competition and continuing computer problems. Crown, based in Largo, Md., completed its first bankruptcy reorganization in November 1999. Also. . . Anadarko Petroleum Corp., an oil and natural gas explorer, agreed to buy Berkley Petroleum Corp. of Canada for about $775 million, or $7.50 a share, in cash, topping a bid from closely held Hunt Oil Co. Houston-based Anadarko would also assume $250 million in debt under the deal. Berkley earlier rejected a $6.93-a-share-bid from Hunt, which holds a 9.6 stake in the company. Berkley has put itself up for sale in an auction that is to end Thursday. Hunt, controlled by the Hunt family of Dallas, said it won't decide on a new bid until Thursday. Anadarko closed off 70 cents at $65.50 on the NYSE. Potomac Electric Power Co. said it will buy Conectiv Inc. for $2.2 billion in cash and stock, uniting two mid-Atlantic utilities considered too small to compete alone in a deregulating industry. Potomac also cut its annual dividend to $1 a share from $1.66, effective in June, which will provide for continued investment to expand. The Potomac-Conectiv merger would serve more than 1.8 million customers in Delaware, Washington, Maryland, New Jersey and Virginia. Aventis, France's largest drug maker, said it fired the head of its U.S. crop science unit and two other managers amid the controversy over its genetically modified corn, StarLink. Maurice Delage, president of Aventis CropScience USA, left the company along with Ed Makowski, vice president of market development, and general counsel Karen Weiner, said a spokesman for Aventis CropScience in Lyon, France. He declined to specify the reasons for the firings. Steelcase Inc., the largest U.S office furniture maker, said it will cut as many as 1,200 jobs, or 5 of its work force, and said it expects earnings for fiscal 2001 to be as much as 11 less than earlier forecasts. The cuts will be made in five cities, including Tustin. Plants in Colorado Springs, Colo., and Solon, Ohio, will be closed. Campbell Soup Co. tapped Nabisco Holdings Corp. Treasurer Robert Schiffner to be its chief financial officer, effective Feb. 26. Schiffner, 51, will succeed Basil Anderson, who announced his retirement earlier this month. Guide to Our Staff: Need to reach Business section reporters or editors? A guide to the section's staff can be found at wtm.latimes.combizstaff. Company Town Napster Users Will Swap Files Elsewhere Music: Fans vow to download songs for free using other tools that are harder for outsiders to track. By JEFF LEEDS TIMES STAFF WRITER Digital pirates, that's what the federal appellate panel reviewing the Napster case labeled the 50 million-plus users of the free song-swapping service in its ruling Monday morning. By the afternoon, many of those users had fired back a response: Napigator ahoy. Music fans vowed to continue trading copyrighted works online for free using other file-swapping tools, including Napigator, Aimster and Gnutella, all of which make it harder for outsiders and authorities to trace which files are being shared with whom. "The people that are finding music? They're still going to try to find it somehow," said Mark Erickson, operator of the Web site PayLar&com, a poke at Metallica drummer Lars Ul-rich and the rock band's claim that Napster fans were draining away rev enue. "If Napster ends up getting shut down, they'll be ticked off because it's become a great resource." Indeed, while fans offered some sorrow for the potential loss of the premier sharing site, they suggested it wouldn't make much difference in practical terms. "Who cares, let Napster die," wrote one user identified as Iparadox, on the Web site. "Long live Napigator! Private Napster servers are the way to go!" "I have been buying overpriced records and CDs for over 20 years or so. Now with the aid of the Internet, it's payback time!" wrote Nigel, another poster. Many experts believe the courtroom victory could backfire on the labels because millions of fans who were engaging in piracy in the relatively plain view of Napster now will head underground and continue trading anonymously. Aimster, a program that allows users to create smaller, more hidden swap meets that are virtually untraceable, said its software was being downloaded at 10 times the normal rate Monday afternoon, or about 2,000 downloads per hour. The company last week launched Infinity Broadcasting Settles Shareholder Suits Over Buyout From Bloomberg News WILMINGTON, Del.-Infinity Broadcasting Corp., the No. 1 U.S. outdoor advertiser, settled lawsuits filed by shareholders who said they would be shortchanged in a $15.5-billion buyout by Viacom Inc., the world's third-largest media company. j Viacom, the New York-based owner of the Blockbuster video chain, Paramount Pictures and CBS Corp., last August offered 0.564 share of Class B Viacom stock for each Infinity share. Infinity shareholders are to vote on the buyout next week. Eleven lawsuits were filed in Delaware Chancery Court by shareholders seeking more money. After negotiations, the stock-swap ratio was increased to 0.592 Viacom share and lawyers on both sides agreed to settle the consolidated lawsuits. The settlement must be approved by a judge at a later hearing, at which shareholders' lawyers will ask for $2.5 million in fees and expenses. Shares of New York-based Infinity, which reported $2.44 billion in 1999 sales, rose 26 cents to $31.56 on the New York Stock Exchange. The shares reached a 52-week high of $39.68 last August. Class B shares of Viacom, with $12.8 billion in 1999 sales, rose 75 cents to $54 on the NYSE, valuing the Infinity shares at $31.67. Loews' Trading Status on NYSE Under Review After Restructuring From Bloomberg News Loews Cineplex Entertainment Corp.'s trading status on the New York Stock Exchange is under review after recent news reports of the company's restructuring efforts. On Dec. 15, the exchange notified Loews that it had failed to maintain the required minimum bid price of. $1, a standard that requires demonstration of compliance within six months of notification. Univisionto Cancel Programs to Save Money From Bloomberg News Uni vision Communications Inc., owner of the top U.S. Spanish-language television network, said it will cancel some programs in response to a "challenging economic environment" The Los Angeles-based company said it will take a charge of $8 million to $12 million in the first quarter for cost-saving measures that include the cancellation of some programs that are on the air or in development The slowing economy has caused other broadcasters, including Walt Disney Co., owner of ABC; and News Corp., owner of the Fox network, to reduce forecasts for ad sales. Univision said it expects cash flow of $420 million to $440 million this year, in line with analysts' forecasts. Univision shares fell 55 cents to close at $37 Monday on the New York Stock Exchange. The exchange also requires maintenance of a minimum market capitalization of $50 million, minimum stockholders' equity of $50 million and a minimum total market value of $15 million for 30 trading days. Loews shares fell 12 cents, or 27, to 33 cents in NYSE trading after a delayed opening. Theyiell 96 last year. New York-based Loews may be bought by Global Crossing Chairman Gary Winnick and Canadian billionaire Gerald Schwartz for more than -$800 million. Last month, Loews said it planned to close or sell 112 theaters as it tries to trim its poorly performing movie houses and avoid filing for bankruptcy protection. TELEMUNDO Continued from Cl on the strength of its return to popular soap operas. Univision snares fell 55 cents to close at $37 on the New York Stock Exchange. The network also recently announced a deal with a popular Mexican programmer for new content. And Telemundo affiliate KVEA-TV has just pledged to increase its commitment to live newscasts, doubling its budget and a new version of the software equipped with encryption technology to keep outsiders from tracking files or instant messages between users. " Word of mouth' has turned into House on fire!,' " said Johnny Deep, chief of the Albany, N.Y., firm that offers the program. "Consumers are NO FREE MUSIC Appeals court delivers devastating blow to Napster. Al , saying with a very loud voice, they've already voted, they want to be able to shop for digital media in the way they've become accustomed to. It's undeniable." Some fans said Napster had been losing popularity since it announced in October it would become a paid service as part of a partnership with media giant Bertelsmann, one of the five conglomerates that control 90 of the music sold at retailers. Napster has so far failed to enlist the other four major companies, and the record industry's own efforts to offer music downloads have mostly fallen flat. Critics say the industry-backed effort has consisted of experiments in which the technology is clunky and the prices outrageous. All of that means the industry is likely to lose displaced Napster users to more dispersed sharing services offering free music. Because Gnutella and other such swap services aren't operated by a company, the record industry is confronted with the possibility of pursuing dozens of Internet service providers and millions of individual users, if it hopes to stamp out piracy. Moreover, numerous file-swapping services are emerging overseas, beyond the reach of U.S. copyright laws. One,, is based in Israel. "My question is, how do you prevent the whole revolution?" said Wayno, a San Diego man who said he had purchased albums by Billie Holiday and Kenny Wayne Shepherd after sampling them on Napster. "What's going to stop me from just opening all the files I have on an anonymous site instead? For people like me, 111 just put all my stuff on an anonymous FTP file transfer protocol site and the heck with Napster." Times staff writer Jon Healey contributed to (Ms report. Company Town Film Profit Report This report is based on projections of total U.S. box-office gross from a consensus of industry sources and studio financial models. The US. returns represent only 20 of a film's final revenue, which includes income from video, TV and overseas theatrical release. Typical industry marketing costs are factored into this profit analysis. Results for the weekend of Feb. 9-11: Highlights: 'Hannibal" looks to be a profitable movie, particularly overseas where co-financiers MGM and Universal expect the film to outgross its domestic tally. However, the studios will cede 30 of those profits to the film's gross participants. "Saving Silverman' should break even once ancillary revenue sources are included. Projected Box- Estimated U.S. box-office office cost, In receipts, Movie title Studio rank millions in millions . Cast Away FoxDreamWorks 5 $90 $220 Hannibal MGMUniversal 1 80 160 Save the Last Dance Paramount 6 13 85 Crouching Tiger Sony Classics 4 15 80 Traffic USA 7. $50 $90 The Wedding Planner Sony 2 28 55 Chocolat Miramax 10 25 35 Valentine Warner Bros. 8 12 22 O Brother DisneyUniversal 9 26 26 Finding Forrester ' Sony 12 $43 $48 Saving Silverman Sony 3 22 24 in ifm&mmmmmmxrtim, "1 Head Over Heels Universal 11 $14 $11 RICHARD NATALE Notes: Cost estimates are for production only. Only half of box-office receipts come back to the studio. If you have information or comments about the chart, call (213) 237-2001 or send e-mail to Send faxes to (213) 237-7837. the size of its newsroom to accomplish that plan. Los Angeles is the country's largest Spanish-language media market. The acquisition of KWHY signals the first and most significant move in Telemundo's ongoing strategy to acquire independent stations nationwide, sources said. KWHY moved to a bilingual format as the Spanish-language market in Los Angeles exploded. It switched to a Spanish-only format in October 1999, becoming the third such station in the Los Angeles market after Univision's Los Angeles Times KMEX-TV Channel 34 and Telemundo's KVEA. Analysts have called Spanish-language media "the fastest-growing traditional advertising business there is," and the competition for viewers has heated up markedly in the last year. Among the new entrants is Azteca America Inc., which last fall announced plans to become the country's third Spanish-language television network. Azteca America is a joint venture between Mexico's second-largest broadcaster and Pappas Telecasting Inc. of Visalia, Calif. Find a car to match your uanity plates. Shop online for new and used cars. 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