The Los Angeles Times from Los Angeles, California on March 20, 2012 · Page 10
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The Los Angeles Times from Los Angeles, California · Page 10

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Tuesday, March 20, 2012
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BuSINESS TUESDAY,MARCH20,2012 :: LATIMES.COM/BUSINESS B DOW 13,239.13 6.51 S&P 500 1,409.75 5.58 NASDAQ 3,078.32 23.06 GOLD $1,666.90 11.40 OIL $108.09 1.03 EURO $1.3238 +.0067 U.S. T-NOTE (10-yr.)2.38% 0.09 ™ 4.25 % 4.25 % Sample APR is 360 monthly payments of $4.92 per $1,000 borrowed. Monthly payment does not include amount for taxes and insurance. Actual payment will be greater.The quoted rate and APR applies to loans between $300,000 and $625,500, owner occupied, rate & term refinances up to 75% loan to value, minimum 740 FICO. Rates subject to change without notice. Not all applicants will qualify. Certain restrictions apply. See website for additional terms & restrictions. Department of Corporations California Finance Lenders Law License No. 603-8780. NMLS Unique Identifier #38512. CashCall, Inc.™ 1600 S. Douglass Rd, Anaheim, CA 92806. 888-240-1027 888-240-1027 Rate & APR No appraisal deposit.Noclosing costs. No appraisal deposit.Noclosing costs. 30 Year FIXED $625,500 up to Part of bailout turns a profit The Treasury reaps a $25-billion profit on mortgage-backed securities, offsetting some of the losses. B2 Making money from music Austin, Texas’ South by Southwest music festival sees a lot of discussion about how to cash in. B3 Burger battle Wendy’s passes Burger King to be the No. 2 burger chain in terms of sales. B4 Youth texting A new report says 12- to 17-year-olds text more and make phone calls less. B7 Market Roundup ... B5 Classifieds ............... B8 It was a tense negotiation. Fox Sports and ESPN were paying about $54 million a year for the TV rights to Pac-12 Conferencegames. The Pac-12 guys wanted five times that. And a 12-year commitment. The networks were so taken abackthata top executive sarcastically asked if the Pac-12 was smoking something, according to people who witnessed the exchange but spoke on condition of anonymity because of the sensitive nature of the deal. But in the end, the two sides agreed to the biggest TV rights contract in college sports history — a 12-year, $3-billion deal,which is a per-yearaverage of $250 million. Some of the power behind the deal came from Evolution Media Capital, a boutique investment bank and advisory firm founded in 2008 by Rick Hess, who was head of Creative Artists Agency’s Film Finance Group, and Robert Stanley, who had been in charge of Merrill Lynch’s entertainment and intellectual property group. EMC has quietly become a force in both the entertainment and sports worlds. Staying out of the limelight, the firm, which counts CAA as one of its owners, has orchestrated more than 20 deals with a combined value of $15 billion. “We’ve built a very formidable company below the radar,” said EMC partner Alan Gold, who specializes in sports media. EMC had a lot to do with making the Pac-12 deal fly. The advisory firm observed that cable giant Comcast Corp.was about to close on its purchase of NBCUniversal. EMC was betting thatComcast would want to make a big splash in sports rights for NBC Sports Network as a way of competing with rivals ESPN and Fox Sports. Hess and Stanley advised thePac-12 to wait for Comcast to emerge COMPANY TOWN Jay L. Clendenin Los Angeles Times EVOLUTION MEDIA CAPITAL co-founders Rick Hess, left, and Robert Stanley flank Erick Thohir, an investor with whom they have worked. Ayoung force behind big deals Investment bank EMC, founded in 2008, wields power in sports and entertainment J OE F LINT [See EMC, B3] In agreeing to pay $35 billion in dividends, AppleInc. Chief Executive Tim Cook sent Wall Street a message: It’s my company now. Steve Jobs, Cook’s predecessor and Apple’sco- founder, hated dividends. To him, Apple’sprofits should be plowed back into the development of mind-bending new products, and shareholders would reap the benefits as the stock value rose. Cook,on the other hand, is siding with Wall Street investors who have long believed that the company was only as strong as its last product. They prefer mature companies like Apple to pay regular dividends, so that even if the shares aren’t screaming higher — Apple shares have risen 48% this year — a dividend gives big institutional investors and others a reason to buy and hold the stock. Jobs, who revived Apple from near-bankruptcy in 1997, may have never gotten over his fear of the company’s cratering, analysts said. Jobs, who died in October after a long battle with cancer, was never one to coddle shareholders anyway. He regularly said he cared little about the stock price, and in 2010 when he was forced to admit that there was a flaw with the iPhone 4’s antenna, Jobs apologized to customers but refused to TECHNOLOGY Apple CEO breaks with Jobs’ legacy Tim Cook’s move to pay dividends shows a change in approach from his predecessor. David Sarno reporting from los angeles Jessica Guynn reporting from san francisco 0 30 60 90 $120 Source: Bloomberg News Los Angeles Times Cash reserves Apple’s cash and securities at the end of each quarter ’06’07’08’09’10’11 4th qtr. 2011: $97.6 $8.2 (In billions) [See Apple CEO, B7] After months of impasse, Blue Shield of California and UCLA finally have a proposal on the table to settle a contract dispute that’s caused worry and confusion for thousands of patients seeking treatment at one of the state’s premier medical facilities. But don’t expect a breakthrough any time soon. The two sides remain far apart over how much Blue Shield should pay for members’ visits to Ronald Reagan UCLA Medical Center in Westwood and the nearby Santa Monica-UCLA Medical Center and Orthopaedic Hospital. “At last we can legitimately negotiate,” said Steve Shivinsky, a Blue Shield spokesman. “But UCLA, insurer are finally set to talk DAVID LAZARUS [See Lazarus, B6] It wasn’t as breathlessly awaited as the latest iPad or iPhone, but investors may come to appreciate the iDivi- dend just as much. Investors have been clamoring for Apple Inc. to begin making quarterly payouts as the tech giant’s stock price has doubled since June and its cash hoard neared $100 billion. The announcement Monday illustrates the importance that investors place on dividends — especially during times of market uncertainty. Pressure from shareholders has prompted American companies to boost dividend payments at a record pace in the last few years. Experts say the trend will continue. “The dividend component is so incredibly important for investors,” said Diane Jaffee, manager of the TCW Dividend Focused fund. “Investors of all stripes —individuals and institutions — really want that comfort.” Companies in the S&P 500 index are on pace to shell out a record $277 billion in dividends this year, up from the previous high of $248 billion in 2008, said Howard Silverblatt, senior index analyst at Standard & Poor’s in New York. Dividends fell out of favor STOCKS Apple dividend rewards investors Tech giant yields to increasing shareholder pressure for quarterly cash payouts. Walter Hamilton [See Investors, B7] The Air Force will modify the handle that engages the emergency oxygen system in its entire fleet of F-22 Raptor fighter jetsafter a report found that it played a role in acrash that killedone of its top aviators. The changes come as Anna Haney, the pilot’s widow, filed a wrongful-death lawsuit against Lockheed Martin Corp. and subcontractors that designed and built the nation’s most expensive fighter jet. Capt. Jeff Haney, 31, died when his F-22 crashed in the Alaskan wilderness in No- vember 2010. In her suit, Anna Haney contends that the F-22 is “unreasonably defective” AVIATION Fatal crash leads to change in F-22’s backup oxygen system All the fighter jets will get new handle after a report says it played a role in 2010 incident. W.J. Hennigan Airman 1st Class Courtney Witt U.S. Air Force PILOT COMPLAINTS about the F-22’s oxygen system led to the grounding of the fleet last year. [See Fighter jet, B4] Walt Disney Co. said it expected to incur a $200-million loss on its big-budget Martian adventure film “John Carter,” ranking it among the biggest box-office busts of all time. The film, which cost an estimated $350 million to make and market, brought in just $184 million in global box-office sales in its first two weekends. That’s well shy of expectations, and likely to drag the movie studio to a second-quarter operating loss that Disney estimated at $80 million to $120million. “Unfortunately for ‘John Carter,’ the story became all about this massive budget,” said Paul Dergarabedian, president of the box-office division of Hollywood.com. “The movie will take one of the biggest losses in recent memory.” Wall Street analysts had anticipated a write-down for the film, based on uneven reviews and pre-release surveys of prospective moviegoers. Even before the movie opened, investment firms estimated losses at $100 mil- lionto$165 million. The tide of red ink places MOVIES Martian film is deep in the red Disney expects to lose $200 million on the adventure flick ‘John Carter.’ Dawn C. Chmielewski [See ‘John Carter,’ B4] LABroadsheet_03-20-2012_B_1_B1_LA_1_ CMYK TSet:03-19-201221:00

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