Daily News from New York, New York on October 14, 1994 · 206
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Daily News from New York, New York · 206

New York, New York
Issue Date:
Friday, October 14, 1994
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DOW JOKES IX3USTRSAL 3,889.05 (Average of 30 stocks) S&P 2.30 487.77 (Index of alt exchanges) P.JiPim WWWU U...L .JJJJ..H.ULJ1IBIIMIII .!,!! M. : rail I tC S ii i iCCI I '"''SSWPSHSSBdSS'' Wv 'W sb. ......g , sV f-- ft W M 0.07 458.57 (Notional tndox) -0X3 767.S0 (NASDAQ Index) Anti-smoke ad snuffed The chairman of R.J. Reynolds, Ja mes Johnston, yesterd ay threatened a libel suit against three California TV stations if they didn't drop an anti-smoking advertisement containing news footage of the nation's tobacco chiefs swearing before Congress that nicotine is not addictive. The ad was dropped. It featured footage of Johnston saying, "Cigarets and nicotine clearly do not meet the classic definitions of addiction." Three other tobacco executives are also shown saying they don't believe nicotine is addictive. An announcer follows, saying, "Now the tobacco industry is trying to tell us that secondhand smoke isn't dangerous." . Viewers then are asked: "Do they think we're stupid?" Ruble is coming - up Following a week of record lows, the Russian ruble made a comeback yesterday 19.9 against the dollar under the guiding hand of the central bank as the Russian parliament debated the fate of bank governor Viktor Gerashchenko. . . The ruble against the dollar shot to 2.994 from Wednesday's 3.736 and Tuesday's all-time low of 3,926. But bankers said the ruble became too high and agreed a realistic level would be between 3,100 and 3,300. It pays to stay home . Two studies of corporate managers have found that men with children and working wives earn less than fathers with stay-at-home spouses. One study surveyed 348 married fathers in management at 20 Fortune 500 companies, and found a wide gap between the salaries of men with stay-at-home wives and those in two-income families. The other study looked at the earnings of men who held master's degrees in business and found a similar disparity. The researchers suggested that stay-at-home wives actually further their husbands' careers by relieving them of the demands of raising the children and by entertaining and building social networks. Mortgage rates step up Thirty-year, fixed-rate mortgages continue to climb. This week's average 8.94 is up from 8.89 last week and the highest in 2 Vi years, the Federal Home Loan Mortgage Corp. said in a survey released yesterday. The average was the highest since April 3, 1992, when it hit 8.96. The average sunk to a 25-year low of 6.74 last October. Ford fuels dividend Ford Motor Co., enjoying strong sales at home and improved results in Europe, raised its quarterly dividend yesterday by 15.5 tp 26 cents a share. The move, which was widely expected, marked the second time this year the nation's second-largest auto maker has raised its quarterly payout to shareholders. Gold & silver Gold closed at $386.10, down $1.90 per troy ounce on the New York Commodity Exchange. Silver dipped 12.9 -cents to close at $5,345. s "V. - H "MO, nfl n n nn n Mm IMMm (DDD By TOM LOWRY Daily News Business Writer The powerhouse threesome of David Geffen, Steven Spielberg and Jeffrey Katzenberg, who rocked Hollywood when they announced they were launching their own movie studio and entertainment company, garner limitless amounts of respect But respect not to mention ego are just part of the formula for a suc cessful media company. Reputation will get the threesome the necessary financial backing, but they face an uphill struggle in starting a studio from scratch, a process that could take two to three years before a film ever hits the big screen. Geffen, Spielberg and Katzenberg have no film library, no distribution system and no slate of the minimum 15 or so films a studio typically needs to put out a year to stay afloat pre33 aCi a sGoaGi) Glows REUTER Wholesale prices took their biggest plunge in more than a year last month, the Labor Department said yesterday, sending stocks and bonds higher as inflation fears abated in Financial markets. The Producer Price Index dropped 0.5 after a 0.6 surge in August, the government reported. Gasoline and heating oil prices took their sharpest drops in nine months, and coffee prices plunged. The core component of the index, which excludes food and energy, advanced only 0.1 after rising 0.4 in August. Early in the day, the government report helped send the Dow Jones Industrial average soaring by as much as 50 points. The lead was cut in the final hour as traders fretted about the Consumer Price Index due out today. The Dow closed up 14.8 points at 3,889.95. Bonds, as well, finished with strong gains, albeit below the day's highs. The 30-year U.S. Treasury is sue ended at 95-2932, up half a point, or $5 per $1,000 face amount, with a yield of 7.86. "Today's producer price report was as surprisingly good as last month's was bad," said Martin Regalia, chief economist at the U.S. Chamber of Commerce. Many investors and traders had fretted that the report, if it had shown rising price pressures, could give the Federal Reserve further impetus to push up interest rates yet again. The central bank has raised rates five times this year. The Labor Department said the overall decline in the index was the fifth decrease at the wholesale level in a year and the biggest drop since producer prices fell 0.8 in August 1993. Coffee prices registered a record monthly drop of 10.3, surpassing the earlier record drop of 7.4 set in January 1987. The price of coffee had been up strongly in recent months, rising 12.0 in August and 42.8 in July. That's why analysts yesterday were predicting that the three would look to buy an existing studio. "You don't build up a studio from scratch in six months,"said Larry Gerbrandt a senior analyst with Paul Kagan & Associates. "It's much more likely that they will look at an acquisition." One likely candidate is MCAUniversal, whose owner, Japan's Matsushita Electric Co., might be looking to sell the studio it bought four years ago for $6.6 billion. Spielberg's Amblin Entertainment has created films for MCA for years, including the $900 million-grossing "Jurassic Park." Others interested in selling might be Sony, which would sell all or part of its studio, ColumbiaTri-Star, and Credit Lyonnais, which under court under to reduce its stake in MGMUA to less than 25 by 1997. MCA Chairman Lew Wasserman and MCA President Sidney Sheinberg, a mentor to Spielberg, are scheduled to meet with Matsushita owners next week in Hawaii. The Hollywood threesome's new venture is likely to be a large part of those talks. Even without purchasing MCA, insiders speculate that the three would make some kind of arrangement with MCA for distribution, given Spielberg's and Geffen's good relations with the company heads. Geffen sold his record company to MCA for $700 million and continues to serve as its president Small movie production companies often have to pay 15 to 20 of their cut to the major studios to distribute their films. "The key to being a major player will be through an acquisition," said Gerbrandt "Then it comes down how well your last couple of movies have done" Jill Krutick, an analyst with Smith Barney, said: "It looks like a mix of the right brew for a potentially successful studio. If they focus on animation, that could have a long-term negative effect on Disney." uoirMoi liss mm r n i By KAREN HUNTER-HODGE Daily News Business Writer . The flamboyant owner of Virgin Airlines would be willing to put his Virgin name on another type of flying marijuana. British tycoon Richard Branson already is pushing his Virgin brand to everything from computers to vodka and cola and pot may not be too far behind. He said the Virgin airline, retail and leisure empire was talking to various potential partners in Britain, c "If (marijuana) was ever legalized and it was proved to- the satisfaction of the BMA (British Medical Associa tion) that it was harmless, he'd obviously consider it" a spokesman for the self-made millionaire said. "We are considering financial services generally but any scheme is at least a year off." Branson wouldn't be the first to jump on the pot wagon, according to analysts. In the late 1970s and early 1980s several cigaret and liquor companies patented names to market marijuana in the event it was legalized. According to an industry insider, one cigaret company even came up .with the. name -"Wright Brothers", (who invented the real flying vehicle) ' to market mariiuana." "Right now it's a hypothetical," said Marc Cohen, a Goldman Sachs analyst who studies Philip Morris Co. "If and that's a big if (marijuana) is legalized, it's safe to say there will be many companies and entrepreneurs who would be looking to get into the business." Financial analysts say Branson is astutely optimizing a well-recognized brand name. Skeptics wonder if he is not over-stepping the mark. "First Virgin vodka, now Virgin cola. Virgin nuts can't be far behind. Virgin on the ridiculous obviously beckons,", the Financial Times said this week. . , . , z m v o

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