The Buffalo News from Buffalo, New York • 7

I BUALO XW A 'a I II I rj rJh SATURDAY AUGUST 19 2000 PageA7 Key Indicators DOW riday close 1104648 NASDAQ riday close 393034 DOLLAR NY close 10 yen 10842 GOLD Comex close 90 cents $27680 BONDS yr treasury X)3 577 BiisinessToday BROADCASTING Icahn buying GM stock DETROIT (Bloomberg) General Mo tors Corp said riday that financier Carl Icahn an investor with a reputation for pressuring companies to boost stock values intends to buy a stake in it Icahn told General Motors that he plans to buy more than $15 million of its common stock but less than 15 percent of the shares outstanding GM rose $3 to $6844 on the New York Stock Exchange The move by Icahn renowned for take over battles including Trans World Airlines Inc Nabisco Group Holdings Corp and USX Corp comes as the General Motors stock has fallen from a high of $9463 in April While Icahn didn't specify his intent his record suggests he may push the auto maker to restructure or free up more of its $20 billion in cash and securities inclination is to believe the nature of GM will never be the said Mark Ste vens the author of Icahn: The Biogra phy of a Renegade instinct tells you that GM would be worth more broken up bureaucracy and inability for the entrepreneurial instinct to rise to the surface and he said GM said its shares are undervalued and that it is in the midst of a $14 billion stock repurchase to lift the lagging price Wal Mart unit buys AmeriServe DALLAS (AP) The exhilarating climb and dramatic crash of AmeriServe ood Dis tribution Inc appeared to near an end riday with the bankrupt announcement that it has agreed to be bought by a unit of Wal Mart Stores Inc Terms of the sale to McLane Co which supplies about one third of the con venience stores was not disclosed The sale is subject to approval by the US bankruptcy court in Wilmington Del Closely held AmeriServe provides food beverages paper goods and other supplies to several large restaurant chains notably KC Pizza Hut and Taco Bell all owned by Tri con Global Restaurants Inc of Louisville Ky and Long John Tricon which had extended $70 million in emergency financing to to keep AmeriServe running approved the selection of McLane AmeriServe officials said AIG to buy fellow insurer HARTORD Conn (AP) American Internationa) Group Inc is buying USB Group Inc parent of specialty insurer Hartford Steam Boiler for $12 billion in cash and stock the companies announced riday The deal offers most HSB shareholders $41 per share worth of AIG common stock Some HSB stockholders will get a mix of I AIG stock and cash AIG said Buffalo Bloomberg Index Stock index of major local employers riday dose: 18881 change: 2 39 195 190 165 i May June July Aug NOTE: January 1 1995 100 SOURCE: Bloomberg Business News Area stock index up in week The Bloomberg Buffalo Stock Index rose t308 points or 166 percent to 18881 this week The employee weighted list of 54 compa nies with operations in Western New York has fallen 096 percent so far this year Twenty four stocks rose this week 24 fell six were unchanged The top gainer was General Motors Corp which rose $575 to $69 for the week Among this week's decliners was IBank Corp which fell $1706 to $48469 In other business news A The Boeing Co announced riday it will consolidate several Seattie area opera tions affecting the jobs of 3500 employees around the country over the next three years Boeing said it plans to transfer employees or (change their assignments rather than cut per i sonnel The company promised to honor all 1 labor agreements 1 American Airlines riday filed for fed I Cral mediation to help break a negotiations stalemate with its flight attendants' union Negotiators have made progress in some 1 areas but not on the weighty issues of pay and retirement benefits according to the i union president and British Telecom two of the largest telephone companies have been informally discussing the possibility of a merger the Wall Street Journal reported riday BT said the report was specu i lation while declined to comment The union representing United Air disgruntled pilots said riday that progress has been made in contract talks i with the airline on the issues of scheduling and quality of work life Salary' and job sccu irity arc still on the table Owner of Channel 29 buys Channel 49 By SHARON LINSTEDT News Business Reporter Sinclair Broadcast' Group which sold its six local radio stations little more thana year ago is reinvesting in the Buffalo market with the purchase of WNYO TV Channel 49 The Baltimore based broadcast com pany which already owns WUTV TV Channel 29 located in Grand Island has inked a $515 million deal with Channel owner Grant Television of ort Lauderdale la Patrick Talamantes Sinclair's chief fi nancial officer said the acquisition fits with the goal of having multi ple television properties in the markets it serves have a stated strategy to own two stations wherever (the ederal Communi cations Commission) Tala mantes said Last August the CC said broadcast ers were no longer limited to one TV sta tion in any market The agency said com mon ownership of two stations is allow able if at least eight other stations in the market are separately owned This is not the first time Sinclair has eyed a local television station to boost its critical mass in the Buffalo market In 1998 it appeared Sinclair would purchase WNEQ TV Channel 23 a PBS affiliate in a $33 million deal with the Western New York Public Broadcasting Associa tion but the purchase unraveled last fall after a series of delays retrospect much better off with this Talamantes said of the second opportunity to in crease its Buffalo portfolio especially excited about picking up a WB affiliate as we really like what that network does in terms of program ming and promotion" In a statement announcing Sinclair's purchase agreement with Grant Televi sion Chief Executive Officer Barry Drake said the combined revenues of Channels 29 and 49 will make Buffalo fifth largest cash flow market with poten tial for further growth adding a second station in Buffalo we will be armed with a stronger local sales force to further build on and expand customer Drake said will also have more programming options to offer our viewers and better breadth of key demographics to offer our advertis understanding of the Buffalo broadcasting market extends beyond tele vision into radio from its former owner ship of local radio stations WBEN AM WGR AM WWKB AM WKSE WMJQ and WWWS AM Those sta tions were sold to Entercom Communica tions in July of last year as part of a 37 sta See Sinclair Page A10 CRUISE INDUSTRY AMHERST IDA ile photo Royal Caribbean Cruises Ltd launched this ship the Voyager of Seas in November Last week the company launched one just like it and has another under construction and 10 more on order a 4 i a err I ''i fr zs 1 't3 u' ull speed ahead Overbuilding of cruise ships brings slump in profits By MICHAEL CONNOR Reuters MIAMI Big cruise lines despite a buffeting from soft ticket prices are keep ing to an expansion course calling for bil lions of dollars to be spent on ever more elaborate ships meant to delight aging North Americans Royal Caribbean Cruises Ltd the world's No 2 cruise operator after Carni val Corp last week showed off to journal ists in New York a huge spanking addition to its fleet even as Wall Street analysts and travel agents warned that overcapacity was dragging down financial returns and creat ing great bargains for vacationers With a passenger capacity of 31 14 Royal Caribbean's Explorer of the Seas cost more than $500 million and is a near duplicate of the Voyager of the Seas launched last November as the world's big gest cruise ship Boasting such features such as a rock climbing wall Explorer also has a working lab for atmospheric and oceanographic re search and a higher proportion than older ships of cabins with the balconies and win dows favored by passengers Royal Caribbean based in Miami and also owner of the Celebrity line has anoth er Eagle class ship like Voyager and Ex plorer in the works and another 10 under construction or on order The group now operates 19 vessels Investors stung by drops of around 60 percent this year in the share prices of Royal Caribbean and Carnival say the companies have simply expanded too quickly in a classic case of cyclical over building The sector which includes the Princess line owned by Peninsular and Oriental Steam Navigation Co of Britain had thrived during the 1990s with steady pas senger growth of 7 percent to 8 percent in North America and torrid 20 percent an nual rises in the much smaller European cruise market Times were so good and new big ships promising better ticket prices and op erating efficiencies according to industry executives that by the end of 1999 the industry had some 50 ships on order at a total cost of $17 billion The ships including a new Queen Mary being built by Carnival for its Cunard Line at a projected cost of $700 million take years to build outfit and launch and de mand long term optimism to make eco nomic sense But in the short term the big cruise companies simply have too many berths in the Caribbean and Alaska and elsewhere to get strong prices according to analysts and the travel agents who sell the great bulk of cruises Volume is up but net yield or revenues available per berth are softer according to a survey of 150 travel agents by analyst Jo seph Hovorka of Raymond James Asso ciates have increased primarily due to the discounting that has been going on in the industry which has had adverse ef fects on the yields of all the major opera tors including Carnival and Royal Carib bean" Hovorka said in a written report But Hovorka wrote of the travel agents two percent stated that new ships also help drive demand for cruises So although short term overca pacity has put pressure on prices new ships are also needed to generate new de mand in the long Cheerleaders for the cruise business say aging on average of populations in North America and Europe add up to a bright outlook for leisure cruising $54 million cardiac care center planned By CHET BRIDGER News Business Reporter Buffalo Cardiology Pulmonary Associates will build a $59 million facility in zXmherst designed to pro vide top cardiac care rivaling some services available at the Cleveland Clinic and Rochester's Strong Me morial Hospital Plans for the facility include a new cardiac MRI an imaging tool which may eliminate the invasive and un comfortable angiogram Construction will be assisted by an inducement approved riday by the Amherst Industrial Development Agency which includes tax breaks of almost $1 million for the 20 doctor group The 5 1 vote riday is the latest move by a local economic de velopment agency using a state law exception to approve incentives for private medical groups Outpatient medical services are categorized as retail facilities under state economic development law and are not eligible for tax incentives The law contain four exceptions in cluding a provision allowing financ ing of services which would not oth erwise by available" in the community what the board had to wrestle with over the last couple of weeks and I think the cardiology group did a good job of demonstrat ing to our board that these services are indeed unique" said James Al len executive director of the Am herst IDA "Going into this meeting 1 really think there was enough support for this The medical group plans to fill its office with new nuclear cameras for diagnostic testing and electrophysiol ogy equipment for treatment of ar rythmia The group plans to invest about $3 million in new equipment "This is about adding new tech nology attracting new young cardi ologists and pulmonologists to the community and insuring the future health of Western New York resi See Cardiac center Page A10 WNY ECONOMY HOSPITALITY INDUSTRY Erie Niagara jobless rate declines to 49 in July The unemployment rate on the Niaga ra rontier slipped in July to 49 percent from 50 percent in June the state Labor Department said A year ago the area's unemployment rate was 56 percent The department said there were 28'500 unemployed people in the Buffa lo Niagara alls area in July Statewide July's unemployment rate of 42 percent was its lowest for the month since July 1988 the department said The jobless rate was down from 45 percent in June and 52 percent in Ju ly 1999 The unemployment rate also came close to matching the last month 40 percent Tire state Labor Department also re ported that there were 7166700 private sector jobs last month most on record and up 23 percent from a year ago Here are the unemployment rates for Western New York's rural counties: Allegany County 50 percent in Ju ly compared with 62 percent in June and Uemployment Monthly rate in Erie and Niagara counties: 60 g' 1' oil liiM 1 a 1 1 1 A AM SOURCE: New York State Labor Department 65 percent in July of last year Cattaraugus 52 percent compared with 57 percent and 66 percent I Chautauqua 40 42 and 48 Genesee 34 41 and 38 i Wyoming 44 50 and 57 Mark becoming convention center competitor By BRIAN MEYER Neiw Business Reporter 1 he Buffalo Convention Center isn't just losing business to snazzy new facili ties in other cities Since last fall the aging center has also lost more than $328000 in banquets and conventions to a hometown competi tor the newly renovated Adam's Mark According to figures released riday the waterfront hotel has landed more than a dozen events that would have likely been held in the convention center lire Mark recently completed an SIS million face lift that includes a new ballroom exhibit hall and thousands of square feet ot upscale meeting space adorned with chandeliers decorative mir rors and paintings The Louis based (hin his bi ivgi siv 1 1 pi Avtin 'Ik hii i i i i 4 lor iips I1 atll 11 Its I lo 'Ills i I 1 iht vs and meal service under one root Even convention center managers concede that a silver lining to the early marketing successes at the Mark: At least the events be staged in Rochester Syracuse or other regions that are among Buffalo's ierce competi tors in the lucrative convention industry "It's good to keep the business in town but we have to recognize that it's impacting on our bottom said Dan Kohane chairman of the Buffalo Con vention Center Management Corp have some pretty serious budget chal lenges that we'll have to deal with in the coming year" Managers from the Adam's Mark could not be reached for comment ri day but they said in the past that the ren ovated meeting space will help attract groups that Buftalo has had ditlicuhy at tracting The convention board of di rectors met in exuuiive session 1 ralav plot strncgie' for 'losipg "hat omtnc said could be a S3i it ll it i gap A tqic Ko See Hospitality Page A10.